ICTSD Bridges | Ocotober 8, 2003
The Sixth International Cocoa Agreement negotiated under UNCTAD auspices, entered into force on 1 October. This agreement differs from the previous five in that it avoids market regulatory mechanisms, such as production quotas, buffer stocks and other price support measures. There is greater emphasis on the creation of a "sustainable cocoa" economy with an active role for the private sector.
Measures include the formation of a consultative board and a call for increased transparency in the world cocoa market through statistical collection and analysis. There are many projects in the agreement including a plan for innovative farm methods and farmer cooperatives.
Seven exporting nations (all African) and 18 importing countries (EU, Russia, Slovak Republic and Switzerland) are currently party to the accord. The agreement will remain open for signature until 20 September 2010 and all major players in the cocoa market are expected to sign shortly.
Cocoa is a primary commodity, the prices of which have been falling steadily over the years. A block of African countries, including Kenya, Uganda and Tanzania proposed a draft text pre-Cancun to address the crisis created by the long-term downward trend of prices of primary commodities (WT/GC/W/508, available at http://docsonline.wto.org).
This draft called for efforts to address the crisis including the elimination of trade-distorting domestic and export subsidies and reduction of tariffs. The fate of this initiative remains in limbo following the collapse of talks at Cancun.
reporting; "New International Cocoa Agreement Enters Force," UNCTAD RELEASE, 1 October 2003.ICTSD Bridges:
