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The International Sugar Régime

Published online by Cambridge University Press:  02 September 2013

Kurt Wilk
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Extract

Nineteen thirty-eight marked the completion of the first year of successful operation of the new international sugar régime and the beginning of its second year. This régime constitutes a new effort at international administration and planning of an important industry. It is now possible to make a first examination of the practical working of the International Sugar Agreement of May 6, 1937, on which the present régime is based, and to compare its operation with that of preceding systems.

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Type
International Affairs
Information
American Political Science Review , Volume 33 , Issue 5 , October 1939 , pp. 860 - 878
Copyright
Copyright © American Political Science Association 1939

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References

1 International Agreement Regarding the Regulation of Production and Marketing of Sugar, of May 6, 1937, League of Nations, Publications, 1937, II B. 8: 7–19Google Scholar; also in International Sugar Journal (ISJ.), 39: 208–216, 1937Google Scholar.

2 Convention and Final Protocol of March 5, 1902, British and Foreign State Papers (BFStP.) 95: 6–15Google Scholar; deMartens, G. F., Nouveau Recueil général de Traités (NRG), II, 31: 272–287Google Scholar.

3 In 1907 and 1912; see infra, notes 125–127.

4 Withdrawals by Great Britain and Italy for September 1, 1912, by France for September 1, 1918, and by Belgium and other countries for September 1, 1920. Cf. Kaufmann, W., Les Unions internationales de Nature économique (The Hague, 1925Google Scholar. Académie de Droit international, Extrait du Reeueil des Cours), 40.

5 Text (in English) in Pennock, J. A., La Question du Sucre en Europe depuis la Guerre mondiale (Paris, 1935), 221–246Google Scholar; German translation: Mikusch, G.. Geschichte der Internationalen Zuckerkonventionen (Berlin, 1932), 106–126Google Scholar.

6 Mr. T. L. Chadbourne, who acted for American and Cuban interests. See his address before the Institute of Public Affairs of the University of Virginia: Cuba and Sugar Stabilization (1931).

7 Chadbourne Agreement to Lapse (press information by the International Sugar Council of Aug. 6 and 7, 1935), ISJ. 37: 333, 1935.

8 The background and development of international sugar regulation before the Great War are described in Jacobs, H., Die Internationale Zuckerkonvention (Berlin, 1928)Google Scholar, especially Chaps. 1, 4; Kaufmann, W., Welt-Zuckerindustrie und Internationales und Koloniales Recht (Berlin, 1904)Google Scholar, Chaps. 1–4; Mikusch, op. cit., Part IA; Willcox, O. W., Can Industry Govern Itself? (New York, 1936)Google Scholar, Chap. 2. For the problems and development of post-war international regulation of the sugar industry, see de Graaf, A., “Die Neugestaltung der internationalen Zuckerwirtschaft,” Weltwirtschaftliches Archiv, 37: 255–281, 1933Google Scholar; Gutiérrez, V., The World Sugar Problem, 1926–1935 (London, 1935)Google Scholar; “Some Ideas on the Theory of International Agreements Applied to the Stabilization of Sugar,” ISJ. 37: 251–252, 1935Google Scholar; Mikusch, op. cit., Part IB; Pennock, op. cit.; Geerligs, H. C. Prinsen, “The Present Position of the World's Sugar Industry,” ISJ. 34: 11–14, 1932Google Scholar; Reyniev, M., Contribution à l'Étude de la Question des Sucres (Paris, 1936)Google Scholar, Chap. 5; Rievel, E., Die deutsche und die international Zuckerkontingentierung (Alfeld, 1934)Google Scholar, Part A; Willcox, op. cit.; League of Nations, Publications, 1937, IIB. 8: 5–6Google Scholar; “The International Sugar Conference,” ISJ. 39: 167–170, 1937Google Scholar.

9 The International Sugar Union of 1902 included Austria, Belgium, France, Germany, Great Britain (until 1912), Hungary, Italy (until 1912), Luxemburg (Bince 1903), The Netherlands, Peru (since 1903), Russia (since 1907), Sweden, and Switzerland (since 1906).

10 Convention of 1902, Arts. 1, 3, 5, 7(a).

11 Arts. 4, 7(c), 8.

12 Art. 7(d), and para. 2, 5, 11 (advice, information, internal administration); Arts. 7(e) and 9 (decision on new admissions).

13 Arts. 6 and 7(b) (decision on status of Italy and Sweden); Final Protocol of 1902, Art. 3 (authorization to increase surtaxes).

14 Agreement of 1931, Arts. I–II.

15 The Chadbourne Agreement included Belgium, Cuba, Czechoslovakia, Germany, Hungary, Java, Peru (since October, 1931), Poland, and Yugoslavia (since 1932).

16 Agreement of 1931, Art. IV(i).

17 The Agreement was signed by Australia, Belgium, Brazil, China, Cuba, Czechoslovakia, the Dominican Republic, France, Germany, Great Britain, Haiti, Hungary, India, The Netherlands, Peru, Poland, Portugal, South Africa, the U.S.S.R., the U.S.A., and Yugoslavia.

18 Agreement of 1937, Art. 19.

19 Arts. 9–13.

20 Arts. 14, 15, 20, 21, 24.

21 Arts. 26, 27.

22 Arts. 33(a) (h).

23 Arts. 3, 7, 14, 15, 24, 33(f) (collection and publication of information etc.); 6 (investigations); 32, 33(b) (d) (e), 34 (internal administration); 33(g) (securing further accessions)

24 Art. 33(c) (free market requirements).

25 Arts. 20, 21, 24 (quota adjustments).

26 Art. 28 (stocks).

27 Arts. 44, 45.

28 Convention of 1902, Art. 7, para. 6, 7, and 10.

29 Art. 7, para. 10; Final Protocol of 1902, Art. 3.

30 Jacobs, op. cit., 48–49; Kaufmann, , Welt-Zuckerindustrie, 257–261Google Scholar; Politis, op. cit., 10.

31 Agreement of 1931, Art. IV (a) (e) (j) (k), providing exceptions for Czechoslovakia. For the personalities composing the Council, under the presidium of Senator L. Bauduin of Belgium. See Mikusch, op. cit., 61–65.

32 Agreement of 1937, Art. 31.

33 Art. 37.

34 Arts. 20, 38, 44.

35 Arts. 39–42. The records of the Council do not disclose how far such delegation actually took place during the first year. In the second year, the Executive Committee has dealt with increases of the free market requirements in Great Britain and elsewhere and recommended quota increases. International Sugar Council, Communiqué of May 20, 1939 (released by the New York Coffee and Sugar Exchange).

36 See the elaborate distinctions regarding the powers of the Commission of 1902 made in Kaufmann, , Welt-Zuckerindustrie, §§47, 49, 50, 51Google Scholar, and Politis, op. cit., III.

37 Valuable in this respect is Mikusch, op. cit.; also Jacobs, op. cit., Chap. 5.

38 For the Commission of 1902, this has been done first in Sayre, F. B., Experiments in International Administration (New York, 1919)Google Scholar, and later, with more details and ample documentation, in Jacobs, op. cit., Chap. 3.

39 Agreement of 1937, Art. 33(b) (d) (e). “First Meetings of the Provisional Council,” ISJ. 39: 299, 1937Google Scholar; “International Sugar Council, April Meeting,” ISJ. 40: 212, 1938Google Scholar.

40 Art. 33(f). “International Sugar Council, October Meeting,” ISJ. 39: 423, 1937Google Scholar.

41 Art. 33(c).

42 Loc. cit., ISJ. 39: 423, 1937Google Scholar.

43 “International Sugar Council, Official Report of July Meeting,” ISJ. 40: 292, 1938Google Scholar.

44 Loc. cit., ISJ. 40: 212, 292, 1938Google Scholar. Cf. International Sugar Council Statistical Bulletin (SB.), 2 No. 4: 3, 4, 1938Google Scholar.

45 “International Sugar Council” (Communiqué), ISJ. 40: 169, 1938Google Scholar.

46 Loc. cit., ISJ. 40: 212, 1938Google Scholar.

47 Art. 24.

48 Art. 21.

49 Art. 20.

50 Art. 21.

51 Loc. cit., ISJ. 40: 169, 212, 1938Google Scholar.

52 Loc. cit., ISJ. 40: 213, 1938Google Scholar (editorial note).

53 Loc. cit., ISJ. 40: 292, 1938Google Scholar. Cf. SB. 2, No. 4: 2, 1938.

54 Loc. cit., ISJ. 40: 292–293, 1938Google Scholar.

55 SB. 2, No. 4: 3–4, 1938.

55a International Sugar Council, Communiqué of May 50, 1939. Recommendations of the Committee for similar increases of the British preferential quotas were left to the next full meeting of the Council for decision.

56 Arts. 11, 12, 13.

57 Art. 14.

58 Arts. 15, 24.

59 Loc. cit., ISJ. 39, 299, 1937Google Scholar. SB. 2, No. 4: 2 and 3, 1938.

60 Art. 14(c).

61 By extensive interpretation of Art. 14 (a).

62 Loc. cit., ISJ. 40: 292, 1938Google Scholar.

63 Loc. cit., ISJ. 40: 292–293, 1938Google Scholar. For subsequent developments, see supra, note 55a.

64 Art. 28.

65 Loc. cit., ISJ. 39: 299, 1937Google Scholar.

66 Art. 48.

67 Protocol of May 6, 1937, League of Nations, Publications, 1937, II B. 8: 19–21Google Scholar. Loc. cit., ISJ. 39: 299. 1937Google Scholar.

68 Loc. cit., ISJ. 39: 423, 1937Google Scholar.

69 Two more ratifications are expected shortly, leaving only China's ratification still in doubt; SB. 2, No. 4: 1, 1938.

70 Art. 44.

71 Art. 45.

72 Arts. 50, 51.

73 Art. V.

74 Art. I.

75 Geerligs, Prinsen, “The First Four Years of the International Sugar Agreement,” ISJ. 36: 465, 1938Google Scholar.

76 Rievel, op. cit., 67.

77 Prinsen Geerligs, op. cit., ISJ. 36: 465–466, 1938Google Scholar.

78 Mikusch, op. cit., 67–72; Pennock, op. cit., 182–186.

79 Mikusch, op. cit., 72; Rievel, op. cit., 61–62.

80 “International Sugar Council, Summary of Arrangements Agreed to at the December Meeting,” ISJ. 35: 60, 1933Google Scholar. Cf. Prinsen Geerligs, op. cit., ISJ. 36: 465–466, 1938Google Scholar; Rievel, op. cit., 63–65.

81 Expressed in Gutiérrez, The World Sugar Problem, 1926–1935, Chap. 1.

82 Mikusch, ibid.; Pennock, ibid.; Rievel, op. cit., 60–61.

83 Rievel, op. cit., 65–66.

84 Loc. cit., ISJ. 37: 333, 1935Google Scholar; Gutiérrez, op. cit., 94–95; Perez, L. M., “The Chadbourne Plan,” ISJ. 38: 45, 1936Google Scholar; Willcox, op. cit., 56.

85 Agreement of 1931, Art. IV(i)7.

86 Gutiérrez, op. cit., 92–93; Mikusch, op. cit., 65; Pennock, op. cit., 176.

87 Gutiérrez, op. cit., 103.

88 “Sugar at the World Economic Conference,” ISJ. 35: 295, 1933Google Scholar; Gutiérrez, op. cit., 103–104.

89 Loc. cit., ISJ. 35: 297–298, 1933Google Scholar; Gutiérrez, op. cit., 106, 110–112; Pennock, op. cit., 187–189.

90 “League of Nations Sugar Conference in London,” ISJ. 36: 137–139, 1934Google Scholar; Gutiérrez, op. cit., 120–123; Pennock, op. cit., 189–192.

91 Loc. cit., ISJ. 37: 333, 1935Google Scholar.

92 This aspect of effective market regulation, both domestic and international, is emphasized in Willcox, op. cit. The laws of the Chadbourne countries are summarized in Mikusch, op. cit., 76–82, and Pennock, op. cit., 177–182. Mikusch, op. cit., Part II, Appendix, contains a collection of the German texts or translations of all these laws (except those of Yugoslavia).

93 Mikusch, op. cit., 81; Pennock, op. cit., 182.

94 Presidential decree of June 11, 1931, No. 794, Gaceta Oficial, 1931, ed. extr. No. 14; (German translation: Mikusch, op. cit., 142).

95 Law of November 5, 1931, Dziennik Ustaw, 1931, No. 101 (German translation: Mikusch, op. cit., 163–164.)

96 Presidential decrees of May 6, 1931, No. 607, Gaceta Oficial, 1931, ed. extr. No. 9, and May 7, 1931, No. 610, ibid., May 7, 1931; Act relating to the Cuban Sugar Stabilization Institute of May 14,1931, ibid., May 15, 1931 (German translations: Mikusch, op. cit., 136–146) setting up the Institute and authorizing signature of the Agreement.

97 Decree of March 27, 1931, Reichsgesetzblatt, 1931, I: 86–100Google Scholar (also Mikusch, op. cit., 153–160), creating a compulsory association of the industry under a public charter, which in 1934 was reorganized under the Reich Food Estate; Pennock, op. cit., 107; Reynier, op. cit., 125–126; Willcox, op. cit., 182–183, 191.

98 Decree of May 5, 1931 (German translation: Mikusch, op. cit., 166–167), authorizing the national agricultural society to agree to, fix, and control contingents.

99 Proclamation of the Minister of Industry, etc., of May 5, 1931, and order of the Minister of Finance of June 23, 1931, Mikusch, op. cit., 160–161, which made permits dependent on applications by a private industrial committee both for its members and for the few outsiders. Of. Mikusch, op. cit., 80; Willcox, op. cit., 156–157.

100 Ordinance No. 3550, 1931; based on Law, Art. 19, 1931, Orságos Törvénytar, July 6, 1931 (German translation: Mikusch, op. cit., 165–166), which authorized limitation of production by private contract.

101 Sugar Export Ordinance of March 19, 1931, Staatsblad van Nederlandsch-Indiē, 1931, No. 114, and Order of the Governor-General of March 24, 1931 (German translations: Mikusch, op. cit., 147–148) creating a committee of representatives of the industry to advise on permits and related questions. Application of the Agreement was the business of a private association, the Visoco, which included about three-quarters of Javan production; cf. Mikusch, op. cit., 77–79, 152–153; Pennock, op. cit., 178. This system was superseded in 1932 by the creation of a compulsory industrial organization, the Nivas; Reynier, op. cit., 135.

102 Decree of November 26, 1932. Cf. Pennock, op. cit. 182.

103 Such as the election of its officers, organization of the Permanent Bureau of the Union, apportionment of expenses; also the issue of regulations of procedure, Jacobs, op. cit., 61.

104 Jacobs, op. cit., 56, 61, 64.

105 Convention of 1902, Art. 7(a) and para. 9.

106 Jacobs, op. cit., 53, 56; Politis, op. cit., 22; Sayre, op. cit., 124.

107 Jacobs, op. cit., 53, 56, 70, 83.

108 Jacobs, op. cit., 56, 85.

109 Art. 6.

110 Jacobs, op. cit., 53; Politis, op. cit., 22.

111 Art. 4, 7(c) and para. 10.

112 Jacobs, op. cit., 54, 57, 61, 84, 95; Politis, op. cit., 22; Sayre, op. cit., 124.

113 Art. 7, para. 10.

114 Jacobs, op. cit., 57, 58, 64.

115 Jacobs, op. cit., 68, 70, 84, 95.

116 By applying the countervailing duties levied in the United States. Jacobs, op. cit., 54.

117 Jacobs, op. cit., 70, 85.

118 Jacobs, op. cit., 64, 68, 119–122; Sayre, op. cit., 125. A declaration of principle had also been refused with regard to surtaxes on sugar products: Jacobs, op. cit., 63.

119 Art. 8.

120 Jacobs, op. cit., 55, 61; Politis, op. cit., 21.

121 Art. 7(e) and para. 10, Art. 9.

122 Jacobs, op. cit., 55, 61; Politis, op. cit., 23; Sayre, op. cit., 124.

123 Jacobs, op. cit., 62.

124 Protocol of June 26, 1906, admitting Switzerland with a deliberative vote in the Commission and under exceptions from the Convention. BFStP., 101: 625–626Google Scholar; Martens, , NRG. III 6: 6–6Google Scholar. Jacobs, op. cit., 62, 68, 69; Sayre, op. cit., 124, 126.

125 BFStP., 100: 482–486Google Scholar; Martens, , NRG., III 1: 874–880Google Scholar; Jacobs, op. cit., 70, 72; Sayre, op. cit., 126.

126 BFStP. 100: 487–490Google Scholar; Martens, , NRG. III 1: 880–884Google Scholar; Jacobs, op. cit., 74; Sayre, op. cit., 127.

127 BFStP. 105: 392–396Google Scholar; Martens, , NRG, III 6: 7–13Google Scholar; Jacobs, op. cit., 88, 92; Sayre, op. cit., 128.

128 Jacobs, op. cit., 81, 93.

129 Jacobs, op. cit., 111–112.

130 Jacobs, op. cit., 59–60, 112–113.

131 American countervailing duties were authorized by act of July 24, 1897, c. 11, §5, 30 Stat. 205 (cf. Franklin Sugar Refining Co. v. U.S., 178 Fed. 743, at 744), which was superseded successively by act of Oct. 3, 1913, c. 16, §IV E, 38 Stat. 193; act of Sept. 21, 1922, c. 356, Title III, § 303, 42 Stat. 935; 19 U.S.C. §1303 (cf. 19 U.S.C.A. §1303, historical note). On this basis, countervailing duties were levied, e.g., by T.D. 18, 217, July 31, 1897 (Franklin Sugar Refg. Co. v. U.S., supra); by Treasury Department circular of Sept. 22, 1897 (Franklin Sugar Refg. Co. v. U.S., 178 Fed. 747); by T.D. 20, 407, Dec. 12, 1898 (Downs v. U.S., 113 Fed. 144; Franklin Sugar Refg. Co. v. U.S., 142 Fed. 376; U.S. v. Franklin Sugar Refg. Co., 2 Ct. Cust. App. 116, the last case dealing with shipments after 1902); by T.D. 22,814, Feb. 14, 1901 (Downs v. U.S., supra); and by Treasury Department circular of May 10, 1907 (Franklin Sugar Refg. Co. v. U.S., 178 Feb. 747). After the War, a duty was levied by T.D. 49,355, Jan. 22, 1938, against imports of British refined sugar upon a finding by the Secretary of the Treasury that the British drawback on refined sugar was, in part, an indirect bounty. The Convention of 1937 takes no cognizance of this indirect bounty. As the United States imports very little British refined sugar and cannot penalize the considerable British exports to other countries, its imposition of a countervailing duty is really in recognition of a principle. (Information on this recent imposition of a countervailing duty has been furnished by Mr. Charles F. Boots and Mr. H. Beach Carpenter).

132 Mikusch, op. cit., 32.

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