VII. INTERNATIONAL CONSIDERATIONS 
PossistE Carret, ACTION 
The contribution to the U.S. trade deficit from imports of cobalt, 
copper, manganese and nickel raw materials totaled over $1.1 billion 
in 1972 and is steadily increasing.t Faced with America’s growing 
dependence on imports for most of the key raw materials consumed, 
the reliability of supplies from mineral exporting countries is being 
closely scrutinized. A number of recent articles have pointed out that 
several “third world” or developing countries have a sizable potential 
for exercising controlled market power.”* For example, four coun- 
tries (Chile, Peru, Zambia and Zaire) control more than 80 percent 
of the copper exports on the world warket, and have already organized 
the Inter-governmental Council of Copper Exporting Countries 
(CIPEC) to coordinate their oligopoly power. C. Fred Bergsten, 
senior fellow at the Brookings Institution, suggests that the cartel 
formed by the oil exporting countries is the prototype that will lead 
to the formation of other commodity cartels. He speculates further 
that unified action by exporters of different commodities, such as 
bauxite and copper, would reduce the threat of substitution. 
However, a number of obstacles arise to the formation of commodity 
cartels. One obstacle is the economic option of using substitutes for 
some commodities as mentioned above. The solution of coordinating 
exports of several commodities, as Bergsten poses, only compounds a 
second and more difficult problem of achieving adequate cooperation 
among suppliers. Unlike the OPEC countries, the metal-exporting, 
non-industrialized countries do not have a surfeit of funds which can 
permit them to withhold or reduce supply for an indefinite period of 
time. In addition, the mineral exporting nations are of much more 
divergent economic, political, historical, and cultural backgrounds 
such that their chances of reaching a common agreement to withhold 
supply or produce an effective cartel are seriously limited. Another 
deterrent to establishing a producer cartel is the ability of consumer 
nations to stockpile some materials. han 
Some observers maintain that commonly shared social or political 
values are not essential to the formation of a cartel. Instead, mutual 
economic incentives are considered the primary motivation. It is also 
suggested that producer nations, frustrated in attempting to achieve 
other goals, may resort to extreme or even irrational policies in the 
management of their mineral resources. Should this happen, during 
a period of growing demand and overall scarcities, major consumer 
1U.S. Bureau of Mines. Data in: Bullis, L. H. Domestic Raw Materials Resources, Pro- 
duction, and Demand vis-a-vis Imports From Abroad. Cong. Research Service Multilith, 
HF 1045, May 3, 1974, p. 28-31. ) i . ) + 
2Bergsten, C. F. The Threat From the Third World. Foreign Policy, No. 11, summer 
1973. Reprinted in Mineral Resources of the Deep Seabed Part II, op. cit., p. 815-818. 
3 Wish, Sidney. Third World Goods Price Rise Feared. (New York) Journal of Commerce 
and Commercial, Dec. 27, 1973. Reprinted in Mineral Resources of the Deep Seabed Part 
II, op. cit., p. 803-805. 
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