Monday 14 September1992

BRITAIN EXPECTS PROGRESS AT ICO MEETING

London, Sep 5 (IPS) -- Although the British government does not expect an agreement to be reached at the International Coffee Organisation (ICO) meeting this month, it is optimistic some progress will to be made.

"After the lack of progress at the last meeting," said Sally Vores, an official from the British Department of Trade and Industry involved in the negotiations, "there is a determination to get results. There is an awful lot of work to be done and the time is running out. We need to get down to serious discussions."

The next meeting of the ICO negotiating committee, involving both consumers and producers, is scheduled for Sep. 21 to 30 in London.

"Although I don't think anything is going to be agreed at the September meeting, we will begin to move in the right direction," Vores added.

A key objective of the next meeting as far as Britain is concerned is to ensure that the concepts under discussion are clearly defined and accepted. For instance, there is still no clear agreement over the precise meaning of the term "universal quotas".

"Until you have a definition that everybody agrees on you cannot possibly set a quota," explained Vores. "You cannot set a ceiling and you cannot say how it is going to be distributed."

It is unlikely the British government will water down its opposition to producer proposals on the policing of any eventual quota agreement. Along with the United States and some other European countries, Britain has consistently rejected producer demands to refuse entry to "undocumented" coffee.

"Our view is that if any coffee, documented or undocumented, was refused entry, it would simply find its way onto the black market and lead to a two-tier market. We cannot afford to allow that to happen again," the trade official said.

Britain is expected to adopt a similarly uncompromising stance toward producer demands that consumers must equally share responsibility for any policing arrangements.

"We are talking about a universal export quota system. Since the producers are the ones releasing the coffee, they are the ones that should make sure that any coffee leaving their country is accompanied by the correct ICO certification. The main burden of responsibility for policing should be with the exporters."

The British government has emphasised, however, that this does not mean that importers should take no responsibility for ensuring that producer countries do not exceed their agreed quotas.

"We will police imports at our end. We will notify the ICO of any coffee that has entered the country without proper ICO certification. It will then be up to them to investigate the matter and penalise the exporting country concerned," said Vores.

Britain will also be looking for some commitment from the ICO that tough action will be taken against those countries which exceed their quota limits. Deterrent action of this sort was notably absent prior to the collapse of the last coffee pact in 1989, Vores claimed.

The 1989 pact collapsed when Brazil and Colombia -- the world's two biggest coffee-producing nations -- pulled out of the agreement. They said they preferred to operate without the quota restrictions.

"In the past, the ICO failed to penalise those countries exceeding their quota limits. When a new pact comes into force the ICO must therefore ensure that action is taken against countries shipping non-quota coffee. There should be automatic penalties, and they must be severe."

British commitment to a new coffee export quota system dates back to December 1989 when EC heads of state in Strasbourg issued a declaration affirming the need to protect the incomes of producer countries with measures to stabilise coffee prices. This was deemed essential to prevent coffee growers switching to cocoa production.

There seems to be little doubt, however, that the concept of quotas finds little ideological favour with the British government. Although "fully committed" to the negotiations, the British official added that the government would strive to "minimise market intervention".

Last year, British coffee imports -- most of which originate from Colombia and Brazil -- were slightly down on the 1990 figure of 2.9 million bags (at 60 kilogrammes each), falling to 2.8 million bags. Imports value terms totalled 395 million dollars in 1991.