ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(81)320
Vol.1981/0103

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(81)320 final
Brussels .18th June 1981
1980 INTERNATIONAL COCOA AGREEMENT
MEETING OFGOVERNMENTS TODECIDE THE FUTURE OFTHIS AGREEMENT
-GENEVA .29AND 30JUNE
(Commission communication tothe Council )
η
~ j. iP""'SoS&'<r. r. ^7
V <tv
COM (81)320 final

Commission Communication totheCouncil
Subject:.1980International CocoaAgreement
MeetingofgovernmentstodecidethefutureofthisAgreement
-Geneva,29and30June.
Présentsituation
The1980international CocoaAgreementwasadoptedon19Novemberlast
yearafterlonganddifficultnegotiations ;theUnitedStatesand
IvoryCoastwithheldtheiragreementfromthefinalcompromise.
Beforethedeadlineof31March,theAgreementwassignedbyexporting
countriesrepresenting some72%ofworldcocoatradeandimportingcountries
/
representing some60%ofthattrade,thelattergroupincludingthe
CommunityanditsMemberStates. ,
ν
Asof31Maythepercentagesofcountrieshavingj^epositedaninstrument
thatwereneededtomakepossiblethedefinitiveorprovisional
application oftheAgreementhadnotbeenattained-ipsojurethe
conditionsfortheentryintoforceoftheAgreementwerenotfulfilled.
JT {
Inthisconnection,theCommissionnoteswithregretandconcernthatone
MemberStatefailedtomakethenecessarynotification andthattheCouncil
wasunabletodecidethattheCommunitywouldalsomakesuchanotification .
TheCommission wouldremindtheCouncilofitsrecommendation fora
decisionof29January1981withaviewtotheconclusionoftheCocoa
Agreement <C0M(81)34final).

Thissituationisparticularly disturbing astheCouncilDecisionof
30March1981confirming thearrangement betweentheCouncilandthe
Commission withregardtoparticipation ininternational workoncommodities
expresslystipulates thattherewillbejointparticipation bythe
Community andtheMemberStatesinalltheagreements concernedinwhich
theCommunity andtheMemberStateswishtoparticipate andthat,with
regardtothesigningandconclusion ofsuchagreements,boththeCommunity
andthetenMemberStateswillbecalledontocarryoutthenecessary
formalities .
TheCommission therefore drawstheCouncil'sattentiontotheimportance
itattachestoasatisfactory andpromptsolutiontothisproblem.
Theproblemstoberesolved
SincetheconditionsfortheentryintoforceoftheAgreement on31May
werenotfulfilled,theUNSecretary-General mustconveneinthenearfuture
probablyon29and30June,ameetingofthosegovernments which,having
deposited aninstrument ofapplication oftheAgreement,mustdecide
whetherto.implementtheAgreement amongthemselves,,inwholeorinpart,
orelsetoabandonimplementation , ,.
1.Participation b^theEECandthetenMemberStatesinthemeetingof
governments
Thisisnecessary andcanbeassuredonlybytheparticipation -ofthe
Community andalltheMemberStatespursuanttothearrangement referredto
above.Itisthereforeessential andamatterofurgencythatbeforethis
meetingtakesplacetheCommunityshouldbeinapositiontonotifya
decisionofprovisional application oftheAgreement andthattheMember
Statethathasnotyetcompletedthisformalityshoulddoso.
Failingtheabove,theindividualparticipation ofcertainMemberStatesat
themeetingofgovernments wouldbepointlesssincetheywouldbeableto
givenovalidundertaking toapplytheAgreement.Themeetingitselfwould
thusbecomemeaningless sinceintheabsenceofEECparticipation a
minorityofimportingcountries (lessthan20%ofworldcocoatrade)would
berepresented facingamajorityofexportingcountries (morethan70%
ofthattrade).Asaresult,theEEC,whichsoughtasuccessful conclusion
tothenegotiations fortheAgreementandhassignedit,woulddefacto
bepreventingthenormaloperationoftheproceduresprovidedfortherein.

2.Jhe_gosT_ti^on_^h2£h_the_Commun2jt^_must^_de^end_atthemeetingof
governments',
A.Iftheparticipationratereachesatleast72%fortheexportingcountries
andatleast60%fortheimportingcountries(thesearetheratesrepresented
bythesignatorycountries),itshouldbepossiblefortheAgreementto■
functionnormally. ,,
, ·"1 V >·
TheAgreementisbasedsolelyonaninternational bufferstockSystem.It
differsfromtheprevioustwoAgreements,whichwerealsobasedonexport
quotas,inthatitdoesnotnecessitate anycontrolsontradebetween
Agreementmembersandnon-members;moreover,thefinancingsystemallows
contributions tobeleviedonalloftheexportandimporttradeofthe
membersoftheAgreement,whateverthedestinationororiginofthecocoa.
"Lastly,therateofparticipation oftheconsumercountries,despitethe
absenceoftheUnitedStates,whichwasnotamemberoftheprevioustwo
Agreementseither,shouldimproveinthenextfewmonths.
TheCommissioadoesnotseesufficientgroundstojustifytheCommunity's
givinguptheideaoftheentryintoforceofthis.Agreementorproposing _,
thesuspensionofitseconomicclauses(bufferstock-pricemechanism),
andthistheimplementation ofonlypartoftheAgreement,namelyits
administrative clauses;
Inthemarketsituationprevailingatpresentandfortheimmediateforeseeable
future(1),asimpleadministrative bodysetuptocompilestatisticswould
beofnointerest.Topropose ^suchathingwouldbetoprovoketheexporting
countries,^whichwouldobviouslybeinclinedtowithdrawtheirfunds
(8230million)fromthebufferstockofthe1975Agreement,thusnecessitating
itsdefinitiveliquidation.Theywouldthereforehavethefinancialresources
theyhavealways ,lackedinthepasttocreateacartelofproducercountries
andtotrytoactonthemarketunilaterally .
TheCommunitywouldhaveallthelessjustification forgivingupinthisway
asitacceptedinDecember1980tosupportapriceof110UScts/lbinthe
Agreement,whilecurrentpricesarebelow90cts/lb.Thebigdropinprices
overthelastfourteenmonthsisclearlyhavinganeffectontheexport
earningsoftheACPStatesandthelongerthislaststhegreaterwillbethe
demandsmadeonStabex. ,
. / I
■ « ,
^Indicatorpricesunderthe 19772172ctsUS/Lb
1978:154
1979:149
1980:118
1981(5months):93

B.TheCommissionisaware,'howeverthatthelevelofparticipation in
theAgreementinthepresentcircumstances ofboththeexportingcountries
andtheimporting ;countriesisnotassatisfactory astheCommunity
mighthavehopedattheendoftheConference,
Inparticular,theCommissiongreatlyregretsthatIvoryCoastispersisting
initsunwillingness tocontribute towardsthestabilization oftheworld
cocoamarketviathisAgreement andisevenaskingtorecoverpartof
thefundsaccumulated duringthelifeofthefirsttwoAgreements,which
willveryprobablyraisecomplexlegalproblems.
Inthesecircumstances andinordertodemonstrate totheseexporting
countries,andtoanumberofimportingcountrieswhichweremembersofthe
previousAgreements thewillingness oftheirpartnerstomaintain
international cooperation inthisfieldatacrucialtimefortheeconomic
situationoftheproductinquestion,theCommission recommends that
theCouncildecidethattheCommunity anditsMemberStateswillaccept
theimplementation ofthe1980International CocoaAgreementatadate
tobedetermined (probably 1October,thebeginningofthecocoayear)
onthefollowingconditions : "
(i)allthegovernments representing majorcountriesparticipating in
theGenevameetingwillthemselves acceptimplementation ;
(ii)theapplication oftheAgreementwillbeonaprovisional basisand
willbere-examined atthemeetingofgovernments,inaccordance with
thelastsentenceofArticle66(3)oftheAgreement\afterayearof
operationinthelightoftheeconomicandfinancialresultsofthe
bufferstockoperations andthelevelsofparticipation intheAgreement,
whichshouldhaveimprovedbythattime.
./.
1_.. .....TheseGovernments maymeettore-examine thesituation anddecidewhether
theAgreementshalldefinitively enterintoforceamongthemselves
continueprovisionally inforce,orterminate.

TheCommissionfeelsthatthemembersoftheprevioustwoAgreements
thatwillnotbeparticipating inthismeetingofgovernements shouldnot
considerthemselvestobefreeofanyresponsibility forthefutureof
theAgreement,whethertheybeexportersorimporters-particularly
iftheyanticipatederiving'financialoreconomicadvantagefromit
withoutmakingtheslightestefforttocooperate.