LAW AND DIPLOMACY IN COMMODITY ECONOMICS

LAW AND DIPLOMACY IN COMMODITY ECONOMICS

LAW AND DIPLOMACY IN COMMODITY ECONOMICS A Study of Techniques, Co-operation and Conflict in International Public Policy Issues Emiko Atimomo Preface by Pierre Vellas

Emiko Atimomo 1981 Softcover reprint of the hardcover 1st edition 1981 978-0-333-27745-4 All rights reserved. No part of this publication may be reproduced or transmitted, in any form or by any means, without permission First published 1981 by THE MACMILLAN PRESS LTD London and Basingstoke Companies and representatives throughout the world ISBN 978-1-349-05086-4 ISBN 978-1-349-05084-0 (ebook) DOI 10.1007/978-1-349-05084-0

The book is dedicated to my late father Aboritsedueye Atimomo, in affectionate memory,for his industry and selflessness; and to the cause of international co-operation and world peace, in keeping with Article 55 of the United Nations Charter

Contents Abbreviations Preface by Pierre Vel/as Acknowledgements Introduction XI Xlll XV xix PART ONE GENERAL CHARACTERISTICS OF INTERNATIONAL ECONOMIC LAW AND DIPLOMACY PRELIMINARY CONSIDERATIONS 3 CHARACTERISTICS 6 Legal Nature and Scope of Economic Diplomacy 6 II Traditional International Law and Modern Economic Diplomacy in the Areas of Application 7 III Methodology in International Economic Law and Diplomacy II IV The Role of Traditional Diplomacy in the Modern World of Economic Transactions 14 2 DIPLOMATIC TECHNIQUES 19 I Techniques of Negotiation in International Economic Law and Diplomacy 19 II Institutional and Administrative Techniques 22 III Stabilisation Techniques 24 3 DIPLOMATIC PREREQUISITES FOR LEGAL TECHNIQUES 34 Introduction 34 I Verification of Credentials and Full Powers 34 II Drafting and the Jurist in International Economic Negotiations 40 vii

viii Contents 4 LEGAL TECHNIQUES: CONCLUSION AND ENTRY INTO FORCE 53 Introduction 53 I Signature of an Agreement 55 II Ratification, Acceptance or Approval of an ~~~m ~ 5 LEGAL TECHNIQUES: THE SCOPE OF APPLICATION OF THE LEGAL OBLIGATIONS IN COMMODITY AGREEMENTS 74 I Duration of Application 74 II Renewal of an Agreement 78 III Date of Entry into Force 79 IV Rationae Personae Effects of Commodity Agreements 83 V States and the Territorial Applicability of Commodity Agreements 90 VI Procedure of Amendments 90 6 LEGAL TECHNIQUES: CONFLICT RESOLUTION AND HEADQUARTERS AGREEMENT 93 I The Techniques of Conflict Resolution in Commodity Institutions 93 II Headquarters Agreement: Diplomatic Privileges and Immunities 109 7 TIN IN INTERNATIONAL METALLIC DIPLOMACY: CASE STUDY ONE 119 Introduction: Notes on the Importance of Tin 119 I Diplomatic Nature of Tin Conferences 121 II Voting Procedures in the 3rd Agreement 134 III Functioning Mechanism of the Tin Agreements: Source of Legal Obligations 146 IV Permanent and Administrative Institutions of the Agreement 158 V An Examination of the 4th International Tin Agreement as an Instrument of Commodity Stabilisation 163 8 COFFEE IN INTERNATIONAL AGRICULTURAL DIPLOMACY: CASE STUDY TWO Introduction I The Coffee Problem II Diplomatic Nature of Coffee Conferences III The Coffee Agreements IV Voting Procedures 168 168 169 171 179 194

Contents V Permanent and Administrative Institutions of the Agreement ix 198 PART TWO CONFLICT AND CO-OPERATION IN COMMODITY DIPLOMACY 9 GENERAL ECONOMIC SCOPE OF THE PROBLEM 205 I Economic Situation 205 II Problems of Commodity Marketing: the Examples of Citrus Fruits (Orange, Lime, Citron, Grapefruit), Bananas and Tea 207 III World Commodity Situation 208 IV Experience of International Commodity Agreements 211 V Co-operation Attempts by Producers of Agricultural Commodities 214 VI Co-operation Attempts by Producers of Minerals and Metals 216 VII The Problem of Conflict and Co-operation 217 10 COMMODITY DIPLOMACY WITHIN THE UNITED NATIONS SYSTEM 224 I Under UNCTAD Conferences 224 II Under the General Assembly of the United Nations 250 III Co-operation Among Third World International Economic Integration Organisations 268 ll COMMODITY AGREEMENTS UNDER A QUASI-UNITED NATIONS SYSTEM 309 I The Cocoa Diplomacy 309 II The Tin Diplomacy 317 12 FINAL REMARKS 323 I The Plight of Poor Nations 323 II For a Flexible Trade Policy 325 III The Need to Restructure the Internal Political Order of Developing Countries as a Prerequisite for Attaining the Desired International Economic Order 326 IV Legal and Diplomatic Dimensions 329 Notes Further Reading Index 331 363 372

Abbreviations 1 ORGANISATIONS ADB AGC ANRPC AOPO BOAD CEAO CEBV CIEH ECA ECOSOC ECOWAS EEC EURATOM FAO GATT GEPLACEA GSA GSP IBRD ICC ICJ ICO IFC ILO IMF ltc ITO IWC African Development Bank African Groundnut Council Association of Natural Rubber Producing Countries African Oilseeds Producers Organisation West African Development Bank Communaute Economique de )'Afrique de I'Ouest Meat and Cattle Interstate Committee (Ouagadougou) Inter-African Committee on Hydraulic Studies (Ouagadougou) Economic Commission for Africa Economic and Social Council Economic Community of West African States European Economic Community European Atomic Commission Food and Agriculture Organisation General Agreement on Tariffs and Trade Group of Latin American and Caribbean Sugar Exporting Countries General Services Administration Generalised System of Preferences International Bank for Reconstruction and Development International Cocoa Council International Court of Justice International Coffee Organisation International Finance Corporation International Labour Organisation International Monetary Fund International Tin Council International Trade Organisation International Wheat Council XI

Xll Abbreviations MULPOC OAS OAU OCAM OECD UAM UAMCE UNICITRAL UNCTAD UNIDO UNO WARDA Multinational Programming and Operational Centre Organisation of American States Organisation of African Unity African and Maurician Cameroon Organisation Organisation for European Co-operation and Development African and Malagasy Union African and Malagasy Union for Economic Cooperation United Nations Commission for International Trade Law United Nations Conference on Trade and Development United Nations Industrial Development Organisation United Nations Organisation West African Rice Development Agency 2 OTHER ABBREVIATIONS JWTL AJIL Journal of World Trade Law American Journal of International Law

Preface Emiko Atimomo's work on 'Law and Diplomacy in Commodity Economics' makes a very useful contribution to the knowledge of some of the most important and most difficult contemporary problems of our times for the following reasons: 1) The application of the New International Economic Order cannot be envisaged without guaranteeing sufficiently stable prices for the raw materials exported by the third world, at a level which would put an end to the worsening terms of trade. Without this stability there could not be any social and economic development. 2) The supply of raw industrial and agricultural materials plays a significant role in the industries of the developed countries as regards their economic growth and their employment policy. That is, 'Commodity diplomacy' is fundamentally important not only for a stable economic growth and equitable distribution but also for the whole North-South relationship and international peace. Emiko Atimomo's work throws light with much pertinence on the diplomatic aspect of great international economic negotiations. These are difficult negotiations because, beyond the essential interests of the third world, the resources of the industrialised countries in raw materials and in food are considerable to the extent that the influence of 'food power' weighs on them. The search for solutions has been rendered so much more difficult that the diversity of raw materials and basic agricultural products implies, besides the diversity of interests, a very great imbalance in diplomatic means on either side. Atimomo has analysed the solutions proposed by the UNO and particularly the UNCTAD. His most important contribution is devoted to the legal analyses of commodity agreements, procedures of ratification, acceptance and approval as well as the chapter on legal provisions which forms the object of interesting developments. Atimomo has devoted the essential aspect of these developments xiii

xiv Preface to the analyses of the different markets of raw materials and to legal acts adopted for their stabilisation, and has brought in particularly useful elements of knowledge on the tin market which was a study previously carried out by him long before the present work. He has also included a study of coffee, tea and citrus fruits. Emiko Atimomo concludes by opting for a flexible trade policy which uses subtle legal means adapted both to market realities and to the needs of the third world countries. Let us hope that these means will be the expression of fuller reciprocal interests. If they are it will therefore be necessary to determine their terms so that in a realistic diplomatic negotiation, evolutionary solutions can allow for an economic recovery under satisfactory equitable and stable conditions. This is the condition under which reciprocal interests between producers and consumers will generate social solidarity without which there cannot be a rule of law effectively respected. October 1980 PIERRE VELLAS Professor, Faculty of Law, Toulouse. Director, Institute of International Studies and Developing Countries

Acknowledgements This book, which was started in 1968 with case studies and which was only completed in manuscript form in 1979, shall first pay great homage to Professor Pierre Vellas of the University of Toulouse, France. It was under him that I studied International Law and Relations and it was he who eventually supervised my doctorate thesis, 'Nigeria and the International Agreements on Tin', some aspects of which have inspired the format of the section of this book dealing with legal techniques. I wish also to express gratitude to Professors L. Siorat and P. Ourliac, Director of the Institute of Political Sciences of the same University who taught me pure politics, which I have now found useful. I taught International Affairs, Economic Development and Comparative Public Administration while at Ahmadu Bello University and not International Law; so that I did not have the opportunity of making my students participate more actively in the process of my growth in this discipline. Nevertheless, I still owe them a debt of gratitude for their stimulating contributions during our study of the politics and economics of raw materials at tutorials. My unreserved indebtedness goes to Dr H. M. N. Onitiri, Director of the Nigerian Institute of Social and Economic Research, Ibadan, through whose instrumentality I was Adviser to the Ministry of Trade Delegation to the International Cocoa Conference in June 1968 in Geneva. Since then I have participated in subsequent meetings of the Cocoa Producers Alliance and have had several opportunities to participate at UNCT AD meetings and at several African Regional Organisations meetings which dealt with the problems of the Third World countries. My participation at both the European and African meetings has offered me greater insight into the problems of the Third and developed worlds, and a fuller understanding of the dimensions of the discipline of international economic law and diplomacy within the precincts of international economic co-operation. As most of the commodity negotiators, particularly of the developed countries, were regulars, it was easier for me to s.tudy and understand their general approach and thinking. While the consumers looked more offensive in XV

xvi Acknowledgements their style and more knowledgeable in the problems under negotiation, the producers only until recently seemed to suffer from a general psychological malaise even when opportunities seemed bright for them to achieve meaningful results. I also owe my experiences to the Economic Community of West African States Institution, where I helped to set up the infrastructural facilities of its secretariat as a member of the Task Force. Further indebtedness is acknowledged to the following persons who have read and criticised my manuscripts at every stage: Mr B. A. Clark, formerly Deputy Permanent Secretary, Ministry of External Affairs, Lagos, Nigerian Ambassador to Switzerland and to the United Nations Organisation in Geneva, Ambassador to Ethiopia and currently Nigeria's Permanent Representative to the United Nations Organisation; Mr Edward Martins, formerly Deputy Director, Africa Division of the Ministry and now Nigeria's Ambassador to Liberia; and Mr I. P. J. Obebe, formerly Deputy Director, International Organisations Division and now Consul-General of Nigeria, San Francisco, USA; Dr G. 0. ljewere, formerly Nigeria's Ambassador to Belgium and at present Director, International Economic Co-operation of the Ministry of External Affairs, Lagos; ChiefS. L. S. Odili-Obi, Principal Secretary, Federal Ministry of Economic Development, who followed my research progress while in the Ministry of Trade since 1968 and Mr Olu Omonira, formerly Lecturer in the Department of Accounting of the Ahmadu Bello University and now General Consultant in Economic Matters in Lagos; Mr Emmanuel Ometan, a legal practitioner of the Supreme Court of Nigeria; and many other academics, too numerous to mention here. I wish also to express gratitude to the following: (1) International organisations which provided me with documents and some of whose officials agreed to talk to me: international councils on tin, wheat, sugar, and coffee; UNCTAD; EEC; CEAO (Economic Community of West Africa, Ouagadougou); African Development Bank, Abidjan; Cocoa Producers Alliance, Lagos; African Groundnut Council with particularly reference to its Deputy Director, Alhaji Gani Issaka; and to Mr P. E. N. Malafa, Director of the United Nations Centre, Lagos. (2) National ministries and research centres in the West African sub-region: Ministries of Justice and Trade, Lagos; Institute of Administration's Zaria Library with particular reference to Mr Ita, its Chief Librarian and a lawyer; Nigerian Institute of Social and Economic Research and the University of Ibadan libraries; the Nigerian Institute of International Affairs Library, with particular reference to Mr A. 0. Banjo

Acknowledgements xvii (Chief Librarian) and Mrs R. T. Okotore (Deputy Chief Librarian) who rendered invaluable services to me throughout my years of research. Outside Nigeria were the following ministries and research centres which I visited in my own capacity to find out about ECOW AS: the Ministry of Foreign Affairs, Cotonou (Republic of Benin); Ministry of Trade Lome (Republic of Togo); Ivorian Centre for Foreign Trade with particular gratitude to Mr Bernard Douayere; Ministry of Foreign Affairs (International Co-operation Division, Abidjan) with particular reference to its Deputy Director, Mr Saidu Bamba; the Ministry of Economic Development, Abidjan ECOW AS/CEAO Division (with particular reference to Mr Tiebri Aka). This acknowledgement cannot be closed without mentioning some very important persons who carried out the secretarial jobs involved. First to Mr C. N. Aribana and Miss Taiwo Bakare, who typed most of the work in their leisure hours without financial reward as their contributions to my solo efforts in financing this project over the years. Finally, to my wife Aderonke, whose patience and resilience saw me through a determined period of over nine months of research fully consecrated to finalising this work, without earning any salary. Lagos, 16 February 1979 E.A.

Introduction In the present international systems of relations among states, the negotiation, conclusion and stabilisation of products arising from economic agreements or the establishment of economic regional markets like the EEC, ECOW AS and the East African Common Market and Community are carried out through the application of certain techniques which are not only traditional but also legal and institutional. These techniques involved in the raw material diplomacy, pose the problem of method within the specific discipline of International Economic Law. Also the study of the conflict and cooperation in this vast area of economic transactions must recognise the importance of the political and economic considerations involved, because they are vital to the proper understanding of economic diplomacy. This is to say that the study of international politics in our times will not be complete unless it is approached in an interdisciplinary manner. This factor cannot but motivate the thinking of scholars towards the need for a philosophy of action governing the relations between the rich and the poor nations of the world. This philosophy shall therefore be axed on international concepts already provided by the United Nations Charter but which are flagrantly ignored in international attempts at co-operation. For these reasons we shall first examine international politics within the Charter situation before finding out why traditional diplomacy has failed, in the field of international law, to satisfy the present international diplomatic approach to economic transactions. How this diplomacy is conducted within the precincts oflaw, politics and economics, and the techniques used in its conduct, will preoccupy our minds in a theoretical area. Hereafter we shall study the conflict and.co-operation situations of commodity diplomacy within the United Nations and quasi-united Nations systems. xix