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USA pull out of International Coffee Agreement

Monday 9 April 2018 by Marketing - HABApril 2018News

What does the International Coffee Agreement mean for the relationship between the USA and International Coffee Organisation?

Last week the USA informed the International Coffee Organisation (ICO) that they would be pulling out of the International Coffee Agreement 2007. The agreement sets out the framework for international co-operation with an emphasis on issues of sustainability, quality, elimination of trade barriers and collection of statistics.

The ICO was created in 1963 after the original International Coffee Agreement 1962 set out to manage low prices by restricting coffee production through export quotas and promoting coffee consumption. Today, the seventh iteration of the Agreement is in place.

So what does The USA leaving the ICA mean?

Probably nothing really. Even though the United States are one of the top four financial contributors to the ICO, the ICO stated “The private sector in the US, represented by the National Coffee Association and the Specialty Coffee Association, is very supportive of the ICO and we will continue to work closely with both associations.”

So why did the USA pull out?

Quite simply – politics and money. Despite no longer trying to control price, the ICO makes an easy target for President Trump’s nationalistic and anti-interventionist “USA first policy”. Before we get on our high horses though, it is important to note that Australia withdrew from the Agreement in 1990 and is currently an “Importing Non-Member” of the International Coffee Organisation.

Read the ICO press release here http://www.ico.org/documents/cy2017-18/pr-295e-withdrawal-usa.pdf

By Michael Brennan

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