V. MULTILATERAL TRADE AND ENVIRONMENT AGREEMENTS
During the 1970s, perhaps the most prominent aspect of the proposed new international economic order was the outline in the resolution on the Integrated Programme for Commodities which was passed by the United Nations Conference on Trade and Development in Nairobi in 1976.
The agreement for establishing the Common Fund for Commodities, which was concluded in June 1980, provided for the pooling of contributions from the International Commodity Agreements (ICAs) sponsored by the United Nations Conference on Trade and Development. The resulting fund was made available to ICAs for stock piling purpose.
The only new ICAs to be negotiated under the Integrated Programme for Commodities terms is INRA. Concluded on October 1979, INRA came provisionally into force in April 1982. The agreement became fully operational in November 1981 when the buffer stock manager started buying natural rubber in order to stabilize a prolonged decline in the international market price of rubber.
The world production of natural rubber is concentrated in three South-East Asian countries: Malaysia (41.5 per cent), Indonesia (23.5 per cent) and Thailand (13.8 per cent). Together those countries account for over 88 per cent of world rubber exports. Because rubber is an important export earner for the governments of those three producers, the wildly fluctuating price of rubber on the international market has always been of major concern to them. That concern was brought to a head in 1974 when the price of Rubber Smoked Sheet No. 1 (RSS No. 1) rose to almost M$ 2.80 per kilogram in January of that year and then dropped to below M$ 1.00 per kilogram in November 1974.
INRA has been useful in serving to stabilize the rubber price within a level that is acceptable to producers and fair to consumers. ANRPC and INRO have served as very useful focal points for continuing cooperating among natural rubber producing countries and between natural rubber producing and consuming countries, respectively. In recent years producer/consumer cooperation in the natural rubber industry has been most evident in the international primary commodity scene with INRA being considered the most successful commodity agreement established under the United Nations Conference on Trade and Development Integrated Programme for Commodities.
However, INRO continued to provide a useful forum for producer and consumer dialogue on matters of mutual interest. INRA, 1987, the second agreement and which is currently in operation, represents a constructive example of consumer/producer cooperation on the price of natural rubber. Recognizing that the future of INRA, 1987, remains uncertain, ANRPC has taken the initiative of embarking on its own developmental projects to promote the natural rubber industry among members countries in order to insure a stable supply/demand balance. Efforts are also being extended towards the standardization of quality standards, representative market pricing, and fair and competitive marketing practices.
In case no successor agreement to INRA, 1987, is produced, ANRPC has made the necessary preparations through its International Natural Rubber Agreement on Price Stabilization (INRAPS) to accommodate the changes in the natural rubber industry. Despite the slowdown in the growth of the world economy, demand for natural rubber in 1993 was projected to be in the region of 5.4 million tons. The higher demand for rubber from the United States, China and South-East Asia will not completely offset the fall in demand in Europe and Japan. In the short term, the price of rubber is unlikely to recover because of an excess supply over demand, brought about by production returning to normal in South-East Asia and also by the poor performance of the automobile industries in Europe and Japan.