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What is the Role of UNCTAD in International Commodity Agreements?

January 28, 2019 0 Comment

As most ICAs and ISGs were set up as a result of the UN Conferences on the respective commodities, organised and serviced by UNCTAD, an important segment of work in this area is to convene and service, as appropriate, meetings related to the negotiations, renegotiations or functioning of new agreements. UNCTAD holds the status of observer to all ICBs.

The idea of establishing new ICAs and strengthening existing ones was one of the core elements of the Integrated Programme for Commodities (IPC), adopted at UNCTAD IV in 1976. It was envisaged that ICAs would have within themselves mechanisms for regulation of production, supply and demand and prices at the world commodity markets.

However, historically, only three ICAs (on coffee, on cocoa, and on natural rubber) were reasonably successful over limited periods of time. In the first two cases, international prices were maintained at “an adequate level” through retention schemes, and in the third case, the buffer stock was operational. In October 1999, the International Agreement on Natural Rubber, at that time the last remaining ICA with a price-regulating mechanism, terminated its activities.

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At present, no existing ICAs (on cocoa, coffee, cotton, grains, olive oil and table olives, sugar and tropical timber) contain economic provisions, i.e. they are not attempting to regulate markets by supply or price management mechanisms.

All current ICAs are administrative in nature, serving as forum for producer-consumer cooperation and consultations, market transparency, development projects and sources of statistics. In many aspects, current ICAs are similar to existing ISGs (on rubber, lead and zinc, nickel, copper, and on jute). Provisions of ICAs and ISGs are administered by the respective international commodity organisations, which currently comprise:

i. International Cocoa Organisation (ICCO) (2001 Agreement, headquarters in London)

ii. International Coffee Organisation (ICO) (2001 Agreement, headquarters in London)

iii. International Cotton Advisory Committee (ICAC) (established 1939, headquarters in Washington)

iv. International Grains Council (IGC) (Grains Trade Convention, 1995, Food Aid Convention, 1999, headquarters in London)

v. International Olive Oil Council (IOOC) (2005 Agreement, headquarters in Madrid)

vi. International Sugar Organisation (ISO) (1992 Agreement, headquarters in London)

vii. International Tropical Timber Organisation (ITTO) (2006 Agreement, headquarters in Yokohama)

International Study Groups:

i. International Rubber Study Group (IRSG) (established 1934, headquartered in Singapore)

ii. International Lead and Zinc Study Group (ILZSG) (established 1959, headquartered in Lisbon)

iii. International Nickel Study Group (INSG) (established 1990, headquartered in Lisbon)

iv. International Copper Study Group (ICSG) (established 1992, headquartered in Lisbon)

v. International Jute Study Group (IJSG) (established in 2002 as the result of transformation of the former International Jute Agreement, headquartered in Dhaka)

ICBs are independent and autonomous bodies with their respective Terms of Reference, Rules of Procedure and Board as a highest authority.

At present, Governments do not appear to be prepared for discussions concerning the producer- consumer schemes for price stabilisation through market intervention in the framework of existing ICAs, although there have been several attempts to introduce market intervention mechanisms by agreement among producers only (on coffee and on natural rubber).

Recent developments:

In April 2005, the International Agreement on Olive Oil and Table Olives was successfully re­negotiated under the United Nations Olive Oil Conference.

In January 2006, the fourth part of the UN Conference for the Negotiation of a Successor Agreement to the International Tropical Timber Agreement, 1994 resulted in the adoption of the International Tropical Agreement, 2006.

In January 2008, the International Cocoa Council established a Working Group for the Renegotiation of a new Cocoa Agreement. The Working Group is meeting regularly.

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