ARCHIVES HISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(79)585
Vol.1979/0202

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(79)585 final
Brussels -26th October 1979
COMMISSION COMMUNICATION TOTHE COUNCIL
CONCERNING GUIDELINES FOR ACOMMUNITY POSITION INTHE FUTURE
WORK ONUNCTAD ONJUTE AND JUTE PRODUCTS
'•«.
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COM (79)585 final

•-FeaturesoftheWorldJuteMarket
(a)Production
Productionofjute,anannualcrop,(andofkenaf,afibreclosely
alliedtojute)totalssome3.5milliontonsperannumandisheavily
concentratedincertainhot,humidregionsofAsia:35$inIndia,25$
eachinBangladeshandChina,andatotalof10%inThailand,Burmaand
a/Nepal.ExoeptinChina,juteisentirelyproduoedbysmallpeasant
farmerswhotypically,inthemainexportingcountriesBangladeshand
India,produceasmallquantityofjutefortheiroashneedsonalimited
partoftheirholdingsasasupplementtotheirbasicsubsistencecrop,
rice.Diversification isthusoutofthequestion,and,despiterecent
improvementefforts,theproductivity ofjutecultivation hasscarcely
changedoverthepastcentury.Theareassowntojuteeachseasondepend
significantly ontherelationship betweenjuteandricepricesatsowing
time,andonthe;expectedfuturerelationship .Oncesownhowever,jute
outputineachyeardependsontheoftenviolentchangesinclimatic
conditionswhichoccurinBangladeshandneighbouring WestBengal,the
mainproducingstateofIndia.Supplyofjuteisthusnotoriouslyunstable,
thepovertyoftheproducersforcesmostofthemtobringthegreatbulk
ofsupplytothemarketintheimmediateharvestperiod(September-November ),
andprioesthusgenerallymovesubstantially withinandbetweeneaohseason.
(b)International Trade
WorldexportsoffibrearedominatedbyBangladesh (about
*
tonsofjuteperannuminrecentyears)andThailand(about100,000tons
ofkenaf),whileworldexportsofjutemanufacturesarechieflyprovided
byIndiaandBangladesh (about500,000toneeach).Inrecentyears,
Bangladeshhasearnedsome$300-400millionperannumfromitsexports
ofjuteandjutegoodsorover70$ofitstotalexportearnings,while
Whererelevant,thewordjuteisemployedthroughoutthisdocument
torefertokenafaswell.

2.-
Indiahasearnedaboutp200–250million*Thisrepresentsonlysome
10$ofIndia*sexportearnings,butjuteremainsofcriticalimportance
tothecityofCalcuttaandthewesternstatesofIndia,aswellasto
Nepal(85%ofexportearnings).Chinaisvirtuallyself-sufficient ,while
Indiaoonsumesmorethanhalfitsoutputdomestically .
Withmuchofthegrowthindemandconcentrated inIndiaandChina,
tradeinjuteandjutegoodshasdeclinedoverthepast15years,with
fibreexportsfallingbynearly3$perannum,andgoodsexportsbyover
1$perannumfortheperiodasawhole.Ontheimportside,theEECis
thelargestimporteroffibre(200,000tonsfallingto100,000inrecent
years),butpurohasesarespreadwidelythroughouttheworld,thenext
largestimportersbeingPakistanandJapanwithonlysome45?000and.
25,000tonsrespectively .ImportsofjutegoodsaredominatedbytheUSA
(275»000tons)andtheEEC(imports80,000-120,000tonsinrecentyears,expor­
ts15-20,000tons,netimports65,000-100,000tons),followedby
Australia,JapanandE.Europe.Butagain,thereisaverywidespread
ofimportsthroughouttheworld,acharacteristic ofthejutemarketwhich '
«
hasconsiderable implications foranyfutureinternational agreementon
jute,giventheimportanceofdevelopingandcentrally-planned importers,
andtherelativeunimportance oftheEEC,USAandJapan.
-ThefallinconsumptionintheCommunityhasbeenparticularly
marked,consumptionofimportedfibrefallingsteadilyandsteeplyfrom
about400,000tonsin19^5tolessthan100,000in1978.Nettradein
goodsoftheCommunityroseinthesameperiodfromabout75fOO0toover '
100,000tons.Asaconsequence,theCommunitynowtakesabout30$of
themuchreducedworldimportsoffibre,11$ofworldnetimportsof j
goods,andabout16%oftotalfibreandgoodsimports.TheUSA(19%),
Australia(5%)andJapan(5$)togethertakenomorethanafurther30 ,j
sothat,intotal,^developedcountriesareresponsibleforonlyabout50%'
ofworldimports.TheUSSRandE..Europetakeaboutanother15anddevel­
opingcountriestheremaining33$(Asia18$,Afrioa12$,LatinAmerica3$).
(c)CompetitionfromSyntheticsandOtherSubstitutes
UtilizationofjuteintheCommunityandotherdevelopedregions
reachedapeakasearlyasthemid-1950's,afterwhichdatebulkhandling,
/

3.-
papersacksandothersubstitutetechniques and.materialsbegantomake
inroadsintoitsmarkets.Betweenthemid-1960'sand1973worlddemand
grewonlyslowly,andactuallydeclinedinalldevelopedareas.Displace­
mentbyanewsynthetio,polypropylene *beganinthelate1960*8,and
quioklybecameamajorthreattojuteoninternational markets.
Althoughexportpricesofjutefibreincreasedonlyslightlyduring
the1960'Sandearly1970's,pricesofjuteproduotsmovedsteadilyupwards
andtheircompetitiveness vis-&-vissyntheticsdeteriorated sharply.Costs
andpricesofpolypropylene declinedwitheconomiesofscalefromexpanding
outputandwithadvancesintechnology,andthecostofconversioninto
yarnsandfabricswasalsorapidlyreduced.Asaresult,by1970most
polypropylene productswereoheaperthanthejutegoodstheyweredesigned
todisplace.Followingthe1973oilcrisis,pricesof~polypropylene rose
sharplyforthefirsttime,butthoseoftheirproductsremainedremarkably
stable,partlybecauseoftherelativelysmallrolewhichthepolypropylene
priceplaysinthecostofthefinalproductandpartlybecausemanu­
facturersoptedtoreduceprofitmarginssoastoretaintheircompetitive
position.Thispolicyallowedsyntheticstomaintain "theiradvantageuntil
early1976,whenpricesofjutefibreandgoodsfellbelowthoseofcom­
petingsyntheticsforthefirsttimeinadecade.Thisadvantagewas
maintainedonlybriefly.Anincreaseinjutepricescoincidedwithasharp
fallinpolypropylene prices,andaseveredeterioration injute'scompe­
titivepositiontookplacein1977/78.Althoughthesituationappears
tohaveimprovedduring1978/79-polypropylene priceshaverisen
fromtherockbottomlevelsreachedinlate1977and.thoseofjutehave
easedwiththeincreasednewcrop–itremainstobeseenwhether
pricesofjutecaiimaintaintheircompetitiveness onmarketsthatare
likelytoremainunderpressureftomovercapacityinsyntheticswellinto
thenextdecade.
(d)Prices
Exportpricesofjutefibreofficiallyquotedin£sterlinghave
remainedrelativelystableinrecentyears,thoughannualaveragesmask
substantial month–to–monthvariationsaswellastheimpaotofthedecline
until"recentlyinthe£sterling,viz.s
/•

4.-
Average annual prices ofBangladesh White Dgrade .jute ,fobChittagong /Chalna
July-June seasons 1974/75 1975/76 1976/77 1977/78
.in£sterling perlong ton 185 159 177 197
inU.S. sfperlong ton 435 316 304 361
4
Nominal export prices in£sterling have infact been kept reasonably -
stable over -thepast decade andahalf ,except during thetwoIndo–
Pakistan wars ,byvirtue oftheinformal price agreement intheFAOInter­
governmental Group onJute ,under which Bangladesh hasendeavoured to
maintain itsexport prices within arange agreed each season with themain
importing countries (incl .EEC).
\
1
II.Discussions onJute within theUNCTAD Integrated Programme for Commodities
1. Resolution 93(IV)adopted attheFourth UNCTAD inNairobi inMay
1976 lists theobjectives ,thecommodities ,theinternational measures ,
follow-up procedures andtimetable forimplementation oftheIntegrated
Programme forCommodities .Among the18commodities identified bythe
Resolution ,andincluded inthe "hard core "of10products considered
suitable forbuffer stock arrangements ,arejute andjute produots .Jute
hasinfact been thesubject ofinternational discussion forsome 15years
within theFAOIntergovernmental Group OnJute andAllied Fibres ,which
has ,asstated ,provided theforum forafairly successful informal inter­
national stabilization arrangement on -jute prices over thepast 12years .
2. Inaccordance with Resolution 93(IV)aFirst Preparatory Meeting
onJute andJute 'Products wasconvened bytheSecretary-General ofUNCTAD
inGeneva on25-29 October 1976 .This wasfollowed byseven further
meetings ,also inGeneva :
2ndPreparatory Meeting (atexpert level ) ,31January -4February 1977
3rdPreparatory Meeting (atexpert level ) 4-7April 1977
4thPreparatory Meeting 11-15 July 1977
1stsession ,Intergovernmental Working Group 16-20 January 1978
2ndsession ,Intergovernmental Working Group 10-14 April 1978
5thPreparatory Meeting 24-28 July 1978
6thPreparatory Meeting 23-27 April 1979
./.2ndPreparatory Meeting (atexpert level )
3rdPreparatory Meeting (atexpert level )
4thPreparatory Meeting
1stsession ,Intergovernmental Working Group
2ndsession ,Intergovernmental Working Group
5thPreparatory Meeting
6thPreparatory Meeting

5.-
3.Promthe1stPreparatoryMeeting,producers(India,Bangladesh)
soughtastabilization ofpricesandexportearningsinrealterms,and
animprovementinthecompetitiveness ofjute,throughanagreement
comprisinganinternational "bufferstockandactionto"harmonize"
productionofsyntheticswiththenaturalproduct.Fromtheoutsetalso,
consumersemphasizedtheirdoubtsaboutabuffer-stock agreementand
"harmonization ",stressinginsteadtheurgentneedforimprovedresearch,
development andmarketpromotion.Nonetheless ,theyagreedonanaction
programmebasedonResolution93(lV),andfurtherstudiesbytheFAOand
UNCTADsecretariats ,whileindicatingthatthemainactiononstabilization
shouldbeanimprovementofthePAOpricearrangements .
4.The2ndPreparatoryMeetingdiscussedatlengththepro*sandcon's
ofaninternational bufferstockscheme,basedmainlyonaseriesof
»
searchingquestionsposedbytheEECandtheUSA,whichservedtoindicate
theveryconsiderable doubtswhichthemajorconsumingcountrieshad
aboutthelikelyviabilityorefficiencyofaschemecomprisingasingle
international bufferstock,andtheirpreferenoeforanimprovedPAO
arrangement •
5.Atthe3rdPreparatory Meetingawidevarietyofotherstabilization
measureswasexamined,includingsupplymanagementandrationalization ,
multilateral commitments ,coordination ofnationalstocks,improvements
ininformation andconsultation ,butwithoutsignificantprogressbeing
achieved.Someemphasiswasgivenforthefirsttimetotheimportance
ofresearch,development andpromotion,whichwereagreedtobedesirable
elementsofajutearrangement,andanumberofobjectiveswerealsoagreed.
Someinitialdefinitions andobjectivesforfutureprogrammesofcost
reductioninagriculture and,possibly,industrywerealsoestablished.
6.The4thPreparatoryMeeting,takingnoteofthedisoussionssofar
held,decidedtosetupaWorkingGrouptomakerecommendations fora
possiblejutearrangement.Itwasalsoabletoreaohagreementonmeasures
forinformation exchangeandconsultations onthesyntheticsproblemtobe
incorporatedintoanyfuturearrangement.Thisrepresentedthemaximum
thatconsumingcountriescouldgointhedirectionofanyformof
'harmonization' .^andeffectivelydefusedtheissueforthetimebeing.
■/-

6.-
7.The1stWorkingGroupheldafurtherlengthyand.technical,but
largelyfruitless,discussionofpricestabilization andbufferstocking
basedmainlyonanUHCTADstudyofthefunctioningoftheFAOindicative
pricesystemandthecostsofbufferstockingtoBangladeshimpliedby
thatcountry'sadherenceincertainmarketconditionstotheFAOrecommen­
dations.Concernedatthecontinuedemphasisonthesubjectofstabiliz­
ationaboveallelseafteroverayearofdiscussions ,theEECsubmitted
aproposaldesignedtoallowworktobeginonthepreparationofinitial
programmesinthefieldsofresearch,development andpromotion.This
wasnotsupportedbytheproducers,whoinsistedonprogressbeingmade
onthestabilization issue.
8.However,atthe2ndWorkingGroupsecretariatstudiesalongthe
linesproposedbyEECwerefinallylaunched.Inadditionthescopeof.
futurecostreductionwork,asbeingonly"evaluationandcoordination "
ofprogrammes wasagreed,andafirstdiscussionheldonpossiblefuture
institutional arrangements .Discussions onstabilization continued,
however,andweremarkedbyaninformalEECproposaltostudyapossible
schemeforinternational finanoialsupportonlyforthatpartofnational
stocksrelatedtoimprovedstabilityininternational tradeinfibre.
Thecontinuingrefusalofconsumerseventoconsiderstabilization
schemesforgoodsbecameasourceofgreatdifficultyforthedelegation
ofIndia.
9.Atthe5thPreparatory Meeting,theimpetusforworkonstabilization
atlastpeteredoutwhenyetanotherUNCTADstudy,thistimeonnational
stockingschemesalongthelinesproposedbyEEC,failedtoconvinceany•
consumerdelegations ,exceptsomeEECstates,ofthelikelyviabilityof
suchaproposal.Atthesametime,workonresearch,development and
promotionprojectpreparation ,asproposedbytheUNCTAD,FAOandITC
secretariats ,wasstronglyendorsed.
10.Themostrecent6thPreparatory Meetingtookplaceshortlyafter
animportantmeetingofproducingcountriesinKathmandu,Nepal,atwhich
thelatterradicallyrevisedtheirpositionsbydecidingthattheywould
bepreparedtonegotiateanagreementforresearch,development,promotion,
etc.withoutwaitingforsuffioientprogresstobemadeonstabilization ,

7.
provided that subject would bekept under discussion .Asaconsequence ,a
fruitful eighth meeting washeld atwhich forthefirst time thequestions of
financing ,criteria forprojects andpossible institutional structure were -
fully discussed .Despite several important divergences ofview onanumber
ofkeyissues (especially onfinancing ,thedefinition ofwork under cost reduct -
/ion,andthepossible future role oftheFAOGroup ,seeAnnex Ibelow ),theMeet­
ingcould agree tomove beyond thepreparatory phase ofmeetings ,andrequested
theUNCTAD Secretariat tobegin toprepare draft articles for apossible
Agreement onresearch anddevelopment ,etc!Concerning thequestion offinancing
consideration hasalso been given tothepossibilities ,inrelation tothe
evolution ofnegotiations underway ,forthecreation ofaCommon Fund ,offered
inthis framework bytheSecond Window .
III .Guidelines foraCommunity Position -
1. APost-Preparatory Meeting onJute isnowexpected inNovember 1979 (1)
forafirst discussion ofthedraft articles ,andexamination ofother
outstanding matters (seeAnnex I"below ).ThePost-Preparatory Meeting
islikely tohave totake adecision whether ornottorequest thecon­
k
vening ofanegotiating conference aimed either at .concluding aformal
intergovernmental commodity agreement ,orofsome other more limited form
ofintergovernmental arrangement •
Thepresent document isintended topropose guidelines foranEEC
position forthis forthcoming Post-Preparatory Meeting .Itistobe
emphasized however that ,atthis stage ,nodirective foractual nego­
tiations isrequired or "being asked for.TheEECwill notindeed need
toadopt such adirective unless thePost-Preparatory Meeting agrees to
proceed tonegotiations ,although itislegitimate toanticipate that it
will recommend this .Inthat case the Commission will submit proposals
for'theestablishment ofsuoh adirective at4anappropriate time .
Theadoption ofanygiven position atthis stage ofthework is
obviously without ,prejudice to :
(a) continued examination ofthefinancial andtechnical problems
involved ,which inanycase will have tobefurther studied by
theCommunity before anegotiating conference isoalled .In
this connection thefollowing maybecited asexamples ofsome
(1)Geneva ,5-9November 1979

8.
outstanding problems ,ontheassumption ofadraft agreement focussed on
research ,development andpromotion activities :thebasic voting rights and
formula forsharing financial contributions given that somanyconsumers are
developing countries andonemajor producer isaleast-developed country ;
whether afuture Jute Organisation should have itsownfund(s )for
programme financing ;thelinkage with theCommon Fund (2nd
«
Window );therelationship ofproject financing toprogramme
financing including related questions ofindicative targets ,
replenishments andpledging ;whether such anOrganization should
beindependent orlinked toanexisting institution ;thedefinition
andscope ofwork under "cost reduction ";thedefinition androle
ofagreed criteria forevaluating projects forwhich theOrganization
might seek finance ;
(b) thefinal solutions to "begiven tomany ofthe a"bove problems .
These will forthemost part have tobedealt with inthe
negotiations themselves .
2. There arealready anumber ofgeneral considerations onwhich a
Community position could bebased :
(a) theCommunity 'srepeatedly stated wish tocontribute totheaction
programme ontheestablishment ofanewinternational econo­
mic order ,andmore specifically oftheDNCTAD 'sIntegrated
Programme forCommodities ;
(b) theCommunity 'sobjective asstated onmany occasions ininter­
national fora ,particularly inthecontext ofCIEC andUNCTAD ,
toconclude inappropriate cases international agreements between
producers andconsumers taking account oftheparticular character­
istics ofindividual commodity markets ;
(c) among thecommodities listed inResolution 93(IV),jute isthe
first oneforwhich thepreparatory work called forinthat
Resolution hasshown that anagreement based onresearch ,develop­
ment andpromotion appears possible .Itwill therefore constitute
afurther test case (following rubber )fortheimplementation of
theIntegrated Programme ;
./·

9.
(d)'thesituationofthetwoorthreemainproducercountriesconcerned
(India,BangladeshandThailand),theirmajorpoliticalroleinSouth
andSouthEastAsia,andtheireconomicanddemographicsignificance in
theGroupof77-over800millionpeopleinthethreecountriespro­
ducing85-90%ofworldjutesupply(excludingChina),thefactthatthe
EEChasconcludedwithIndiaandBangladeshCommercialCooperation
Agreementsandspecificsectorialagreements onjute,andtheroleof
theEECinimportation,productionandconsumptionofjuteand/or
^juteproducts.A11thesefactorsmustbeofgreatinteresttothe
Communityandtootherindustrialized consumers,particularlythe
UnitedStatesandJapan.
3.TheCommunityshould,therefore "beabletoacceptrecommendations
openingthewaytonegotiations forapossibleinternational agreement
onjute.AtthisstageofCommunitythinkingand.inthelightofthe
previousinternational discussions summarizedinSectionII-above,the
Commissionconsiders,subjecttotheobservations madeinparagraphIII.l
above,thatthenegotiations shouldbeprincipally concernedwithinter­
nationalresearoh,development andpromotionsystems;thesewouldappear
torepresentthebestpossibleinternational solutionsinthecaseofjute.
;
«
IV.Proposals
rj.ItisthereforeproposedthattheCommunityshouldbepreparedto
acceptastheoutcomeoftheworkofthePost-Preparatory MeetingonJute
andJuteProductsconolusions andrecommendations alongthefollowinglines:
(i)Arecommendation toconvenenegotiationsforapossibleformal
inter-governmental commodityagreementbetweenjuteproducingand
consumingcountrieswiththeprimaryobjectiveofimprovingthe
competitiveness ofjuteandjuteproducts.
(ii)Theprinoipalelementsofsuchanagreementshouldbetheformu–
.lation,coordination andimplementation ofprogrammesandprojects
onresearch,developmentandmarketpromotionforjuteandjute
products.
(iii)Insofarascostreductionprogrammesandprojectscanbeseparately
defined,theemphasisshouldbeonagricultureratherthanindustry,
andthesoopeofworkundertheagreementlimitedtoevaluation
andcoordinationofsuohprogrammesandprojects.
/

(iv)Inconnectionwith(n)and(in)above,thereshouldbeagreementona
.setofcriteria,whosepreciseroleinevaluatingprojectstobeformulated,
coordinated orimplemented bythepossibleJuteAgreementremainstobe
defined. ...
(v)Participation ontheconsumers'sideinthepossibleJuteOrganisation
shouldnotbeconfinedtoafewdevelopedcountriessuchasEEC,USAand
Japan,butshouldincludealsoE.EurQpeananddevelopingconsumers(thisis
particularly becauseonecriterionforpossiblefinancingfromthe2nd
WindowoftheCommonFundmaywellbethatprojectsorprogrammesbeendorsed
byaproducer/consumerbodyrepresenting thebulkofworldtradeinagiven
commodity). .
(vi)Otherelementsofapossibleagreementshouldbe:
-regularexchangeofinformation andconsultations oncompetition
betweenjuteandsynthetics; •-
-marketintelligence activities;
-continuedJicussionofstabilization issuesrelatingtojutefibre
forexportandjutegoodsforexport;
-continueddiscussionofotherimportantissuesrelatingtojute,taking'
intoaccountthecompetenceandresponsibilities ofexistingfora.
2.Apartfromtheabovepoints,itisrecognisedthatanumberofotherim­
portantaspectsofapossibleagreementstillrequireconsiderable further
examination andmayonlybesettledifnegotiations takeplace.Theseinclude
interalia:
V ,
(a)Theinstitutional frameworkofthepossibleJuteOrganization,i.e.whether
itshouldbea,completelyseparatelegalentity,astheproducerswish,'or
attachedtoanexistingbodysuchastheFAOIntergovernmental Groupon
Jute(thisquestionwillhavetobediscussedinthelightofthestudyon
thesubjecttobepresentedtothePost-Preparatory MeetingbytheUNCTAD
andFAOsecretariats ).
(b)Methodsoffinancing.Onthiskeypoint,producershavedreadyconcededthat
financingofprojectsorprogrammesshouldbeonavoluntarybasis.They
arehoweverseeking

11.*
asystemfortheadministrative budgetwhichwouldrequire
developedconsumerstopayadisproportionate share.More­
over,despitetheiragreementonthevoluntarynatureofthe
financingforcertainprogrammesandprojectsunderaneventual
JuteOrganization ,theywishittobeendowedwithitsown
.fundorfunds,andthattheprinciplesofindicativefinancial
targets,replenishments andpledgingbeincorporated intoan
eventualagreement *
(c^Theinternalorganizational struotureandthedecision-making .*
(voting)procedureswithintheCounoilestablishedtoimplement
'anyAgreement.

AMEX I
AGREED CONCLUSIONS OFTHE SIXTH
PREPARATORY MEETING ONJUTE AND JUTE PRODUCTS
1. TheSixth Preparatory Meeting ,agreeing that work hasprogressed
"beyond thestage ofpreparatory meetings ,andacknowledging theneed to
proceed toanegotiating stage assoon aspossible ,decided that thenext
meeting ,which would take theform ofapost-preparatory meeting ,should ,
inter alia ,begin work onthebasis ofdraft articles which would ,constitute
aninternational agreement onjute andjute products .
2. TheMeeting agreed that theagreement should provide fortheestab­
lishment ofanInternational Jute Organization l/with thefollowing
functions :
(a)Research anddevelopment
Theformulation ,co-ordination andimplementation ofaprogramme
onresearch anddevelopment ,onacontinuing basis .
Commentary
Inthis connexion ,theMeeting agreed that theprojects drawn up
bytheFAOandsetoutindocuments TD/B/IPC/JUTE/16and19should be
subjected toevaluation andformal approval byGovernments inorder to
form abasis foradecision bytheJute Organization onitsinitial
programme inthis field .
(b)Market promotion
Theformulation ,co-ordination andimplementation ofaprogramme
onmarket promotion ,onacontinuing basis . .,
Commentary <
Thesame commentary applies asin(a)above with reference tothe -'-
ITC and document JUTE 17.
(c)Cost reduction
Theevaluation andco-ordination ofprogrammes aimed atcost reduction
ofjute and jute products .
Comment ary
Regarding cost reduction ,although some discussions took place ,it
was clear that different views remained onboth the definition ofcost
reduction andtherole which ajute organization would play inthis area .
Some delegations continued tointerpret cost reduction ascovering awhole
range ofprojects including themodernization ofplant andequipment and
capital investment .These delegations clarified that intheir view the
1/This term iswithout prejudioe totheinstitutional structure
that maybeagreed .

-2-
contentoftheterm"costreduction"meant"improvementinproductivity
andprocessingefficiency".Otherdelegationscontinued ,tobelievethat
costreductionshouldbedefinedmoreintermsofimprovementinprocesses.
TheMeetingagreedthatdetailedworkondefinitionsstillhadtobe
carriedbut. '
I
Somedelegationsbelievedthattheroleof*aJuteOrganization
inthisareabelimitedtotheevaluationandco-ordination ofprogrammes
asagreedatthesecondsessionoftheWorkingGroup.Otherdelegations
interpretedaJuteOrganization'sco-ordinating functionasincluding
theacceptanceofresponsibility forensuringimplementation ofthe
programmes.Itwasrecognizedthatfurtheroonsensusonthisissuewas
needed.
(d)Competitionwithsynthetics
Provisionforregularexchangeofinformation andconsultations
oncompetition betweenjuteandsynthetics ,inaccordancewiththe
recommendation oftheFourthPreparatory Meeting.
(e)Marketintelligence
* ι
Thefacilitation ofthefurthercollationanddissemination of
informationrelatingtojuteandjuteproduots.-
(f)Stabilization v
Incaseagreementonstabilization isnotreachtedbythetimethe
negotiation oftheagreementisconcluded,provisionforthecontinuing
consideration ofthequestionsofstabilization ofpricesandsupplies
ofjuteandjuteproductswithaviewtoarrivingatanexpeditious
solutionagreedbybothproducersandconsumers,takingintoaccount
thepossibility ofmakingfulluseoftheCommonFundwhenestablished ,
inaccordancewiththeprinciples onwhichtheFundwillbebased.
(g)Otherfunctions
Arrangementforcontinuingconsideration ofotherrelevantimportant
issuesconcerningjuteandjuteproducts. .
3.Criteria
ItwasagreedthattheOrganization wouldneedtotakeitsdecisions,
reflectingproducer/consumerapproval,onprojectsonthebasisofagreed
criteria.Therewasadifferenceofviewonthequestionofwhenthese
criteriashouldbeagreed.Somedelegations wishedtodosobeforethe
establishment oftheOrganization ,withaviewtoprovidingguidelinesfor,
andexpeditingdecisionsbytheOrganization .Inthisconnexion,theU.S.A.
andE.E.C.suggestedthecriteriawhicharereproducedinAnnexA.Other
delegationsfeltthatthequestionofcriteriawasconnectedwiththe
autonomyoftheOrganization ,andthatthisquestioncouldappropriately
bediscussedalongsidetheinstitutional arrangement.Theyalsofeltthat
thismightnotcausefurtherdelay,sinceinanycasethedeoisionon
projectswouldhavetobetakenbytheOrganization .Itwasagreedthat
thisissueshouldbeexaminedfurtheratthenextmeeting.

-3-
4« Finance
(a) TheMeeting agreed that theJute Organization would have an
administrative budget towhich itsmember governments would contribute .
Some delegations proposed that these contributions should bedivided
equally between producers andconsumers onascale reflecting trade
shares injute andjute products ;others proposed apportionment onthe
basis ofcapacity topay ,UNformula ,etc.Itwasrecognized that the
basis remained tobediscussed atthenext meeting .
(b) TheMeeting agreed that theJute Organization should mobilize funds
from allpossible sources tofinance itsagreed projects andprogrammes .
Itanticipated that theSecond Window ofthe Common Fund would bean
important source offinance .Other souroes could include international
financial institutions ,direct voluntary government contributions ,and
contributions from private sources (e.g. ,thetrade andindustry ).
Ifthejute agreement came into effect before theCommon Fund ,theMeeting
recognized that these other sources would have toact asthe sole source
forthis interim period .TheMeeting agreed that anydirect government
contributions toassist theimplementation oftheprojects andprogrammes
would begiven onavoluntary basis .
(c) TheMeeting agreed that asystem ofprogramme andproject funding
should besufficiently flexible toinclude direot contributions toagreed
projects andcontributions toagreed programmes »Anyfinancial mechanism
should seek toprovide assurance ofthe funds that would beforthcoming \
forthe agreed programmes andprojects .Tothis endthequestions ofthe
establishment ofindicative targets ,replenishments andpledging should be
considered atthenext meeting .
There wasadifference ofviews over what role aJute Organization
would play inthemanagement offunds tofinance projects orprogrammes .
Some delegations believed that aJute Organization would serve asachannel
forfunds ,andwould locate sources offinance foragreed projects or
programmes ..Other delegations believed that theJute Organization should
maintain itsownfund ,replenished byregular contributions from govern­
ments ,from which itwould disburse funds toprojects ofitschoosing .
TheMeeting recognized that itwould benecessary todiscuss this issue
further andreach consensus ,hopefully atthenext meeting .
5. Institutional structure
(a) Different views were expressed astowhether ,ontheonehand ,the
Organization should beacompletely independent legal entity ,orwhether ,
ontheother hand ,itshould belinked toanexisting international
organization .Some delegations believed that thelatter possibility needed
tobeexplored before adecision oninstitutional structure could betaken .
TheMeeting recognized that this question should beresolved ,ifpossible ,
atthenext meeting .
(b) Some delegations considered that theJute Organization would contain
aCouncil astheOrganization 'spolicy-making body ,comprising allthe
participants intheagreement ,with other subordinate committees ,as
appropriate ,dealing with thedifferent fields ofagreed activities ,as
well asother related matters forfulfilling theagreed objectives ofthe
agreement .They also considered that theJute Council would need asmall
secretariat staff accountable toits
\

-4-
(c)TheMeetingagreedthatthequestionofinstitutional structure
wouldheconsideredfurtheratthenextmeeting,
(d)TheMeetingexpressedthehopethattheOrganization wouldhe
joinedbyasubstantial numberofproducersandconsumerscovering
respectively thebulkofworldexportsandimportsinjuteandjute
products.This,inanycase,mightberequiredbytheCommonFund
SecondWindow.
6.Follow-upaction
(a)TheMeetingrequestedtheUNCTADsecretariattoundertakepreparation
ofdraftarticlesofaninternational agreementonjuteandjuteproducts,
embodyingtheagreedconclusionsofthisandpreviousmeetingsfor-an
arrangementoragreementandwithalternativeformulations byGovernments
onpointsnotyetagreed,sothatthenextMeetingcouldbeginworkon
thebasisofthesedraftarticles,
(b)TheMeetingdiscussedthequestionoflinkingtheJuteOrganization
withanexistinginternational institution suchasFAO.Thoughsome
delegations affirmedthatintheirview,theJuteOrganization shouldbe
acompletelyindependentorganization ,someotherdelegationsfeltthat
thepossibility oflinkingshouldbeexamined.Inthisconnection,the
Meetingrecognizedthatthesecretariats ofFAOandUNCTADwerealready
examiningtheissuesrelatingto,andthepossibilities of,linking
commodityorganizations withvaryingdegreesofautonomy,toanexisting
international institution.' TheMeetingaskedthatjutebespecifically
includedinthisexamination ,andrequestedthatthestudybecirculated
toparticipants inthe.jutemeetingasearlyaspossible.Someofthe
delegations wishingtoexaminesuchalinkdrewupalistofconsider­
ations,listedinAnnexB,whichtheybelievedthesecretariats should
takeintoaccountintheirwork.
(c)TakingnoteofthefactthatUNIDOhadnotundertakenthework
ontheprojectsforcostreductioninindustry,theMeetingrequested
theUNCTADsecretariat totakeappropriate actionforthepreparation of>
aprogrammeofpriorityprojectsincludingestimatedcostsinaccordance
withtheconclusionsoftheFifthPreparatory Meeting.Somedelegations
recommendedthat,incarryingoutthiswork,theUNCTADsecretariat should
takenoteofthecriteriasetoutinAnnexA,Ifmajorproblemswere
encountered ,theSecretariat wasrequestedtoconsultwithgovernments
asfaraspossiblethroughtheirmissionsinGeneva.
(d)TheMeetingrequestedtheSecretary-General ofUNCTADtoconvene
apost-preparatory meetingnotearlierthanfourweeksafterthedraft
Articlesandthestudyreferredtoin(b)abovehavebothbeencirculated.

AMEXAtoANNEXI
Criteriaproposedbytherepresentatives ofthe
UnitedStatesofAmericaandEEC
Allprojectsshouldmeeteachofthefollowingcriteria.Theyshould:
(1)Yieldbenefitstothejuteeconomyasawholeandberelevantto
allproducingmembercountries;
(2)Berelatedtothemaintenanceorexpansionofinternational trade;
(3)Offerreasonableprospectsforpositiveeconomicreturnsinrelation
tocosts,andbeofreasonablesizeinrelationtotheinternational
juteeconomy;
(4)Bemarket-oriented anddesignedtofindmethodsofimprovingthe
competitiveness ofjute*
ANNEXBtoAMEXI
Inconnexionwiththestudyrequestedinpara.6(b)therepresen­
tativesofUSAandEECrecommendedthatthefollowingbeconsidered :
(a)Theexpertiseofexistinginternational institutionsinthe
fieldofjuteandhowajuteorganization witharangeoffunctionssuch
asdelineated abovemightrelatetothem;
(b)Alternativetypesoflinkage,thelegalandconstitutional
requirements oftheselinkages,andtheimplications suchalternative
typesoflinkagewouldhaveforexistinginternational institutions ;
(c)Waysinwhichajuteorganization couldusestaffandfacilities
ofexistinginternational institutions ;
(d)Whatfinanciallinkswould "bepossible;i.e.bothfor
administrative andprogrammeexpenses;and
"(e)Possiblefinanoialandothersavingswhichmightresultfrom'
suchlinkages.
Withinthisframeworkconsideration shouldalsobegivenwhether,
and,ifpossible,bywhatchangesinitslegalandstructuralaspects,
theexistingFAOIntergovernmental GrouponJutecouldbeutilizedto
formthenucleusoftheproposednewJuteOrganization .
Whenconductingthestudy,thesecretariats shouldtakeaccountof
thestatusofdiscussions ontheCommonFund,particularly withaviewto-
ensuringthatanycommodityorganization forjutecouldmakemaximumuse
offinancingfromthisFund.

ANNEXII
BASICSTATISTICS OHJUTEANDALLIEDFIBRES
1972-741975/761976/771977/78
000tonnes
PRODUCTION
India
Bangladesh
-ί^ϋ/China–'
Thailand
Népal
Burma1.176 1.064 -1.276 1.282
1.010 787 851 997
692 810 870 880
427 308 183 240
51-41 45 56
72 37 28 55
EXPORTS
Bangladesh
India
Thailand
IMPORTS
USA
Japan
Australia
Pakistan
EECNETPOSITION
importsoffilare
importsofgoods(fibre)
(goods)
(goods)
(fibre)
(goods)–1f
(goods)
(goods)
(fibre)
(goods)
(goods)
y
TOTALIMPORTS
exportsofgoods
NETIMPORTSy
a/Partlyestimated
b/-Calendaryearoffirstyearshown(SourceEEC)425 425 412 301
417 1446 475 522
600 479 .426 510
236 141 90 78
73 78 67 80
422 290 275 250
66 42 47 .56
58 26 30 25
54 63 68 65
86 40 45 45
270 193 181.127
70 60 81 112
340 253 262 239
21 15 20 17
319 238 242 222
Source:FAOdocumena/
a/
a/
a/
a/