The Commission welcomes the adoption of the negotiation directives by the Council to negotiate changes to, and support the modernisation of, the 2007 International Coffee Agreement. The Commission will lead the negotiations with the negotiation directives providing the framework.
Commissioner Jutta Urpilainen commented: “I am glad that the Commission has received the negotiation directives to negotiate on behalf of theEuropean Union. We will work towards a more modern coffee agreement, taking the recent trends of this significant economic sector into account to ensure a fair system for all”.
The coffee market has changed
Since the 1960s when the first agreement was concluded, the coffee market has diversified and evolved in various ways. Growing demand for coffee in the last 30 years has resulted in the expansion of coffee production and exports. Global production in volume has increased by more than 60% since the 1990s. A rising share of exports consists of transformed products such as roasted coffee. The value of annual cross-border coffee exports in all forms has more than quadrupled in the same period. Consumption has expanded in traditional importing countries but also in exporting countries, and the coffee sector now offers consumers more quality products, either with specific coffee varieties or with more sustainable products.
Need to modernise the International Agreement
Under the current agreement, votes and contributions of the countries that are members of the agreement are based on an equal share of representation between exporting/producing countries and importing/consuming countries. However, the distinction between exporting and importing countries has been blurred by recent developments. These have led to ‘importing countries’ exporting transformed coffee products and to ‘exporting countries’ importing coffee products for transformation or consumption.
In addition, the current calculation of votes and contribution system is only based on volumes of coffee traded. A review of the agreement would explore possible changes allowing an update of the system in line with the current evolution of the coffee sector.
The private sector plays a crucial role in the coffee sector, so the discussion will also aim to increase its representation at the International Coffee Organisation (ICO) without losing the body’s intergovernmental dimension.
With this mandate, the Commission will start engaging in negotiations at this September’s International Coffee Council on behalf of the European Union and its Member States.
The International Coffee Agreement (ICA) is an international commodity agreement between coffee-producing countries and -consuming countries. First signed in 1962, it aimed originally to maintain exporting countries' quotas and keep coffee prices high and stable, mainly using export quotas to steer the price. The quota system has been abolished and the ICA now closely follows the coffee market and supports the coffee sector through initiatives agreed on by ICA members.
The International Coffee Organization (ICO), the controlling body of the agreement, represents all major coffee-producing countries and most coffee-consuming countries. The current agreement has 42 exporting and 7 importing members.
The European Union represents all its Member States in the ICO, counting as one member, and is as such the main financial contributor to the organisation.
Between 1990 and 2019, global coffee exports rose by 63% to 7.9 million tons. Consumption also rose by 47% to 5.2 million tons. In 2018 global trade in all types of coffee product came to USD 36 billion.
- Datum publicatie
- 28 juli 2021
- Directoraat-generaal Internationale Partnerschappen