V. MULTILATERAL TRADE AND ENVIRONMENT AGREEMENTS
C. International Cocoa Agreement
Unstable cocoa prices become the main concern both of producers and consumers. The situation led to the establishment of the International Cocoa Agreement, the first of which was agreed in 1972 and put into effect on 1 October 1973 after more than 16 years of negotiations. The object of the agreement was to reduce the wide fluctuations in the price of cocoa and to establish a minimum price. To date, five such agreements have been implemented. The fourth International Cocoa Agreement expired after a two-year extension period on 30 September 1993. A buffer stock and withholding schemes were two main approaches that were agreed in the first four agreements. The withholding scheme, however, has not been implemented.
The ineffectiveness of the first four Agreements led the United Nations Cocoa Conference held from 5 to 16 July 1993 which adopted a new International Cocoa Agreement with economic provisions, aimed at achieving an equilibrium in the medium and long term between supply and demand for cocoa through adjustments in production and the promotion of consumption. The core of the agreement calls for "a production-management plan" to be drawn up by the producing countries by a Production Committee set up by the International Cocoa Council. Under the agreement, each exporting member country is responsible, in terms of decisions and financing, for its production-management programmes. A Consumption Committee, comprising members of the International Cocoa Council, is responsible for the promotion of cocoa consumption in all countries. The new International Cocoa Agreement came into force on 22 February 1994. The new pact dropped the economic provisions on price range, buffer stock and other supplementary measures that were included in the earlier agreements. It allows for a production management plan designed to achieve a lasting equilibrium between world production and consumption. The production management plan is purely a voluntary arrangement. It aims at bringing the stock: consumption ratio down to 20 per cent (compared with over 60 per cent at the end of 1991/92).