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Commodity Stabilisation Mechanisms

Volume 409: debated on Friday 18 July 2003

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To ask the Minister of State, Department for International Development what assessment the Department has made of the role of commodity stabilisation mechanisms in future trading relations between the European Union and developing countries. [126259]

A number of commodity stabilisation mechanisms (including buffer stocks arrangements and export quotas) have been employed in the past, generally within the framework of International Commodity Agreements concluded between producer and consuming countries. In general, these mechanisms have not been successful and their practical limitations have been clearly demonstrated in practice.Consequently, the UK is not supportive of direct intervention in commodity markets through globally imposed or similarly orchestrated measures designed to maintain or stabilise commodity prices. Rather, the UK favours initiatives that are voluntary, transparent, financially self-sustaining and which minimise market distortions.DFID therefore does not intend to undertake any formal re-assessment of the potential role of commodity stabilisation mechanisms in future trading relations between the European Union and developing countries. Moreover, it is DFID's view that other institutions, such as the European Commission or the Common Fund for Commodities, might be better placed to conduct any such future assessment.