Mutual Negotiation or Fending for Oneself

Oil is an invaluable resource that countries are willing to modify their foreign policies over. Should oil be nationalised, or does a trade organisation need to come in? How does one secure the funding and the profits to keep the trade of oil thriving? In answering these questions, countries came together into blocs and broke apart. Alliances were made and fell apart. Will the trade organisation hold? Or will each country monopolise its assets?

After the previous day’s negotiations went awry, the committee divided into two blocs, a producer-only bloc and a producer-consumer bloc. Some countries, such as Mexico, the UK and many Middle Eastern countries, favoured a differential pricing system. Differential pricing is a pricing strategy where the producers charge diverse rates for their products to different consumers. These countries suggested that countries with a high GDP, such as the USA, the UK, and France, pay more for oil than under-developed or developing countries.

However, some nations expressed their different views. The delegate of the USA was firmly against differential pricing, voicing her opinion about joint ventures with the oil corporations. In this agreement, the USA would fund technology for the extraction and refining of oil in a set number of wells, and it would, in turn, receive a fixed amount of oil at a fixed price. The delegate of the USA also advanced that the price of oil would vary with supply and demand. The delegate of the USSR proposed that oil-producing countries sell the oil to the USSR at a lower price in exchange for finance and technology. On the other hand, Egypt’s representative put forth the idea of fixed oil prices.

The funding for the organisation was yet another issue that setback the negotiations for a trade organisation. The USSR delegate suggested that the organisation’s profits be used to fund the same. He also proposed a riveting idea that a little of the funding be set aside as a loan for new member countries who may have just discovered oil as an indispensable resource. The delegate of the USA suggested that countries such as themselves, the UK and France provide the funding for infrastructure, technology and human resources. The USA continued that as the Middle East began to stand on its own feet, the USA would back off. This suggestion of the USA giving power back to the Middle East when they asked for it sparked backlash.

After a heated argument and a long unmoderated caucus, the committee settled into coming up with a draft resolution. This draft resolution sought to act in the best interest of each country and work towards a united trade organisation, benefiting both the producers and the consumers who need a symbiotic relationship with each other to keep their economies flourishing. The day proved fruitful, and the committee sought to negotiate the clauses in the upcoming sessions.