If the International Natural Rubber Agreement expires in late December because a new pact hasn't been ratified, it will be a sorry and undeserved end for what, most experts agree, has been a textbook example of how commodity agreements should operate.
Not that it's necessarily worked economically.
Some members in the industry-particularly Goodyear-would argue it has. But there have been severe NR price fluctuations during INRA's 15 years of operation, and all of them have resulted from the unavoidable vagaries of supply and demand.
When rubber prices fell below 40 cents a pound, buying 370,000 metric tons for the INRA buffer stock did nothing to raise prices, at least not immediately.
And when prices soared above 70 cents a pound, selling off 220,000 tons of stockpiled rubber didn't bring prices down.
Politically, however, INRA has been a great success.
At the very least it has kept lines of communication open between the governments of NR-producing and consuming nations. It has assured NR smallholders of at least some support for their efforts, and assuaged the fears of rubber product manufacturers that NR-producing countries might create a cartel.
Financially, too, the agreement has been successful.
It has made money for the 31 member countries; the U.S., which initially invested $50 million in INRA, has made $28 million on that investment.
That adds up to $78 million which the Republican Congress now wants to reclaim as part of its budget-balancing act. Smart move.
Instead of promoting the continuing friendship and stability of Southeast Asian nations, and an unbroken supply of a critical industrial and strategic material, Congress can use that money as a downpayment on Star Wars or more B-1 Bombers .
U.S. government officials, always somewhat shaky in their support of commodity agreements, now seem of the opinion that the only good commodity agreement is a dead commodity agreement.
Yes, the free market approach works. But in the case of rubber, the cost of INRA is minimal in comparison to its benefits. To kill it for a quick buck would be shortsighted.