International Coffee Agreement Impact

International Coffee Agreement Impact

The 1976 International Coffee Agreement was negotiated in 1975 in the context of a market situation radically different from that prevailing during the negotiations of the 1962 and 1968 Agreements, when the supply of coffee exceeding consumer needs tends to lower prices. Until 1975, mainly following a severe freeze in Brazil, the world`s largest producer, doubts about the adequacy of supply for the immediate future were reflected in a sharp rise in prices. These considerations prompted members, during the negotiations on the 1976 Convention, to introduce a series of new provisions aimed at strengthening and improving the functioning of the Organization and maintaining many of the provisions that had proved effective in previous agreements. The process of negotiating a new agreement gained new momentum with the fall of prices to record levels for the coffee years 1990/1991 and 1991/1992, and the Council accepted a further extension of the agreement until 30 September 1993. At the same time, it decided to set up a working group to carry out a comprehensive review of all proposals and ideas for future cooperation on coffee. This led to the creation of a negotiating group that was mandated to negotiate a new agreement on the basis of a universal export quota system. Despite important negotiations, however, it proved impossible to reach a satisfactory conclusion before the required date of 31 March 1993. The Council therefore decided, in June 1993, to adopt the Agreement before 30 June 1993. To maintain the Organization as a forum for international cooperation on coffee and to have time to negotiate a new agreement.


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