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Bush's Pitch to Ease Coffee Nerves

December 17, 1989

President Bush has made a wise exception to his constructive encouragement of freer world trade: He has committed himself personally to revising and reactivating the International Coffee Agreement that collapsed last July and placed some Third World economies at risk.

The vagaries of commodity prices have been punishing to the developing nations of Africa, Latin America and Asia, especially those dependent on export earnings from a single commodity like coffee. But even international agreements to control supply and price have not always resulted in stabilization. It's true that the coffee accord, in effect since 1963, has been among the most effective of the agreements. But it collapsed because of quota rigidity that denied some consumers the kind of coffee they wanted, and because of a double standard that permitted producers to sell coffee at discounts to consumers outside the agreement. Prices that fluctuated between $1.15 and $1.45 a pound under the agreement fell below 60 cents. All but five of the producer nations have suffered grievous loss, among them Colombia, which is struggling for economic viability in the midst of warfare with the drug lords--and under great pressure from Washington to reduce narcotics exports.

It was the complaint of Colombian President Virgilio Barco Vargas that attracted Bush's attention. Barco wrote Bush that producers worldwide would lose $4 billion in the first year after collapse of the agreement, half of it among Latin American growers, with Colombia alone facing a loss of more than $400 million. The collapse hit hard at other special allies of the United States: the Central American states, struggling to restore democracy, and Kenya in East Africa, trying to pull itself out of recession.

"Clearly we are very sympathetic to Colombia's economic problems--including the effect of the lapse of the Coffee Agreement--especially in light of the sacrifices and commitments your country has made to battle the drug cartels," Bush wrote Barco in reply. But now his commitment will be put to the test: Current consultations are stalled for want of a compromise.

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