The United States Government is withdrawing from the International Coffee Agreement 2007, the main international commodity agreement between most of the world’s major coffee-consuming and coffee-producing countries.
The withdrawal is in step with the “America First” nationalist agenda put forth by Donald Trump’s U.S. Presidential administration, yet it comes as the U.S. Senate awaits confirmation hearings for Mike Pompeo as Secretary of State following the firing of Rex Tillerson, whose last day in office was March 31. Neither the President nor the Department of State have commented publicly on the withdrawal, which was announced today by the International Coffee Organization (ICO).
The United States was instrumental in the creation of the first International Coffee Agreement (ICA) in 1962, which set export quotas based on an indicator price established by the ICO. The goal was to stabilize coffee commodity prices worldwide for the benefit of both producing countries (sellers) and consuming countries (buyers).
Though it has not had regulatory teeth regarding export quotas since failed negotiations in 1989, the agreement has been renewed seven times since its creation, and is currently supported by countries representing 98 percent of the world’s coffee production, and 83 percent of the world’s coffee consumption, the latter including the support of all of the European Union, Japan, Russia, Norway, Switzerland and Tunisia.
The ICO today is primarily concerned with facilitating intergovernmental collaboration and private sector collaboration while providing data and analysis to policy-makers — all in an effort to promote a more sustainable, less volatile sector that benefits everyone involved in the coffee trade.
“The private sector in the U.S., 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,” ICO Executive Director José Sette said in an announcement today. “With regard to the U.S. Government, a previous U.S. administration took the decision to withdraw from the International Coffee Agreement and later returned. We hope that the international coffee community will once again see the U.S. Government back among our membership and join us in continuing to tackle the complex challenges facing the world coffee sector in which 25 million producers, mostly smallholders, and over 125 million people directly or indirectly depend on coffee for their livelihood.”
According to the ICO rules, the U.S. withdrawal as a signatory of the International Coffee Agreement will take effect June 3, 2018.