In Sugar and the making of international trade law Michael Fakhri provides a history of economic ideas and an ‘institutional account’ of international sugar trade policy from the 1900s to the 1970s. He excavates the pre-history of multilateral trade institutions and economic globalization using three case studies: the 1902 Brussels Convention, the 1937 International Sugar Agreement (ISA), and the 1977 ISA. He asserts that each of these deserves a prominent place in the history of global trade policy and the shifting meanings of the phrase ‘free trade’. Fakhri persuasively argues that certain market interventions have long been seen as fully compatible with free trade. His other major contribution is to centre agricultural commodities as part of the intellectual history of globalization.
In the first section, Fakhri reviews the context and outcomes of the Brussels Convention of 1902, which he suggests was ‘the earliest modern international trade treaty that established a multilateral institution’ (p. 21). The Convention promoted free trade and originated at the behest of British colonial cane-sugar planters facing competition from subsidized European beet sugar. The treaty, in effect for a decade, allowed countries to impose countervailing duties against countries subsidizing sugar production – duties which were seen as a means to achieve freer trade, Fakhri points out. For a variety of reasons, West Indian planters did not benefit from the regime, and the cumulative effect of freer trade was to reconsolidate British imperial power.
In the middle section, Fakhri highlights the under-studied economic theorizing at the League of Nations in the 1920s and 1930s. Though trade policy was never their primary focus, League officials articulated a coherent set of ideas about international trade. They convened three world economic conferences and helped institutionalize the idea that economic problems could be addressed through international coordination, carried out by technical experts rather than politicians. In an era when protective tariffs were common, League officials advocated lower tariffs, coupled with international market coordination, referred to as rationalization schemes. The League provided a forum for commodity producers to negotiate these schemes. Cuba – one of the world’s largest sugar producers at the time – led efforts at the League to create an international sugar rationalization agreement, culminating in the 1931 Chadbourne Plan and the 1937 ISA. Fakhri describes these as ‘early experiments in transnational governance’ (p. 73). The emphasis on Cuban diplomacy at the League is particularly innovative. Since US investors controlled a significant portion of their sugar-dominated economy, Cuba’s sugar policy was a means to achieve domestic objectives. Through the League, they hoped to gain an advantage over the United States.
While Cuba certainly shaped these agreements, Fakhri occasionally overstates its power. For example, he suggests that the 1937 ISA ‘granted Cuba the greatest degree of international economic power’ and ‘increased Cuba’s economic sovereignty in relation to the US’ because it allocated votes in proportion to sugar production (p. 130). Voting power in the ISA notwithstanding, Cuba never actually outweighed US influence over the sugar market. Fakhri does point out that the ISA ultimately ‘maintained and further legitimized’ Cuban dependency on the US market (p. 132), but we are nonetheless left with an incomplete picture of US power. While it is refreshing to learn about Cuba’s League activism, closer attention to US politics might have helped to explain why Cuba’s diplomacy failed to ameliorate the country’s position vis-à-vis the United States. Most notable to me is that Fakhri does not link League economic doctrine and the US New Deal, especially its sugar quotas. While he mentions the 1934 Jones–Costigan Act (p. 129) which created the New Deal sugar quota programme, he does not accurately explain that law or show its relationship to the Reciprocal Trade Agreements Act (RTAA), passed the previous week. Jones–Costigan created a rationalization scheme for the US sugar market, controlled by the US Department of Agriculture, as a way to manage US geopolitical influence and coordinate domestic, colonial, and foreign production. The RTAA replaced the old system, in which Congress set uniform tariff rates for all trading partners, with a new programme authorizing the president to set tariffs and negotiate bilateral trade agreements. In other words, the New Deal enacted the precise theory of free trade articulated through the League – lower tariffs and market rationalization through quotas. Fakhri does not explore this connection. Perhaps this economic theory never succeeded as attempted by multilateral institutions precisely because the United States successfully controlled the international sugar market by enacting rationalization as domestic policy. I would even suggest that what Cuba achieved through the 1937 ISA was less important than the outcome of the 1937 US Sugar Act, which revised the Jones–Costigan Act and further institutionalized Cuba’s share of the US market. It is also worth noting that Jones–Costigan was designed by veterans of the Allies’ international commodity coordination schemes during the First World War. They were versed in the same theories as League officials, and I would be curious to see if there is evidence of direct collaboration.
In the final section, Fakhri describes how the vogue for rationalization schemes faded after the Second World War. He argues that free trade advocates lost their enthusiasm for rationalization because of the Cold War polarization of the so-called First and Third Worlds. In the 1960s, ‘underdeveloped countries came together as a political bloc … and used this same rationalization discourse’ as part of their effort ‘to obtain post-colonial restitution and redistribution through international economic structures’, much as Cuba had done earlier (p. 161). Even though US agricultural commodity markets were rationalized, the United States generally did not favour international commodity controls. The primary multilateral trade organization, the General Agreement on Tariffs and Trade, focused on reducing tariffs, and paid scant attention to commodity agreements. In contrast, the United Nations Conference on Trade and Development, established in 1964, advocated agricultural commodity agreements as a ‘Third World’ response to trade liberalization. Fakhri argues that the 1977 ISA represented the apogee of such efforts, though by the early 1980s global economic crises had undermined faith in commodity agreements. In this context, proponents of neoliberalism gained influence and promoted an approach to free trade that did not include rationalization. The result has been that multilateral trade institutions reinforce existing inequalities in the global economy, much as was true of earlier free trade efforts.
Fakhri covers ground that few others have touched, and his interdisciplinary approach deepens our understanding of international commodity agreements and the twentieth-century contradictions of free trade. It will be particularly useful for specialists in economic and legal history, trade law, commodity studies, and the history and political economy of development. As a historian, I would have appreciated a more thorough contextualization of Fakhri’s historical and archival sources, and I disagree with a few of his interpretations. Nonetheless, this is a remarkably wide-ranging book, with a wealth of insights and an impressive, persuasive synthesis.
