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U.S Participation in International Commodity Organizations

Released by the Bureau of Economic and Business Affairs, March 31, 1998

The U.S. currently participates in five industrial commodities organizations. Four of these organizations are study groups and producer/consumer fora, while the fifth, The International Natural Rubber Organization (INRO), attempts to stabilize rubber prices around long-term trends using buffer stock operations.

The International Natural Rubber Organization (INRO) was established in 1982 to reduce volatility in natural rubber prices. This instability impacted severely on both producers and consumers by increasing price uncertainty and discouraging long-term investment in natural rubber production. As the world's largest consumer of natural rubber, the U.S. has an important interest in assuring current access to rubber at stable prices, as well as adequate future supplies. INRO pursues these goals through the operation of a buffer stock mechanism, smoothing natural rubber prices around long-term market trends. The organization has also promoted improvements in rubber specifications and testing procedures, which has played an important role in improving the quality of a wide array of rubber products and components, including high performance tires, aircraft tires, hoses, seals, and consumer products.

The International Rubber Study Group (IRSG), which was established in 1945, and is the oldest of the single-commodity study groups, grew out of strategic concerns about the supply of rubber in World War II. The U.S. is the world's largest consumer of rubber and rubber products, and the availability of accurate information about market trends continues to be important to the U.S. economy. IRSG collects and publishes statistics on world production, consumption and trade in both natural and synthetic rubber. It also establishes grades and specifications for marketed rubber and fosters research into improving the quality of rubber and expanding its potential applications.

The International Copper Study Group (ICSG) was established in 1993 as a forum for inter-governmental consultations among producers and consumers of this major industrial metal. The U.S. Government, on behalf of U.S. industry, was a prime mover in the creation of the group following copper market instability in the 1980s. The ICSG studies the worldwide production, distribution and consumption of copper in order to foster market transparency and thus improve long-term market conditions. It also serves as a forum for discussion of market trends, new technologies, and government policies affecting the copper industry. After barely three years, ISCG has already done work of significant interest to U.S. industry such as lifting the veil over the copper industry in the former Soviet Union and financing research work on the potential health problems associated with copper in drinking water.

The International Lead and Zinc Study Group (ILZSG) was established in 1960 as a forum for intergovernmental consultations among lead and zinc producing and consuming countries. The U.S. is a leading producer and consumer of these metals and is also an important scrap trader, particularly of lead from spent storage batteries. The study group produces and disseminates a wide variety of statistics important to the operation of a competitive market which ensures the lowest possible prices for the lead and zinc used by U.S. consumers. Increasingly, however, the study group plays an important role in reporting on the effects of environmental rules and a new international agreement on trade in hazardous wastes. This is particularly important with respect to lead where it is important to maintain trade, to the extent that it is safe, so that scrap can either be recycled or disposed of in an environmentally sound manner.

The International Tropical Timber Organization (ITTO) was established in 1985 as a forum to promote the tropical timber trade and the development of sustainable forest industries, including forest management practices that encourage long-term supplies. The U.S. is a significant importer of tropical timber for use by domestic industry (furniture, cabinets, paneling and other wood products). The U.S. is also a major producer and exporter of temperate forest products. Issues discussed in the ITTO, such as certification and labeling of wood products, apply to wood products from all types of forests including temperate forests, and decisions on these issues could have a significant impact upon the global competitiveness of our own industry. The U.S. also has a strong interest in promoting the sustainable management of tropical forests through the ITTO because of the relationship of tropical forests to global environmental problems.

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