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  1. 1. Global Business EnvironmentCUN110501021AssignmentOnInternational Commodity Agreement&Global System of Trade PreferencesSubmitted to, Submitted by,Shelly Ma’am Deep Jyoti DasCUN110501021BBA -3X
  2. 2. Global Business EnvironmentCUN110501021International Commodity AgreementAn international commodity agreement is an undertaking by a group of countries to stabilize trade,supplies, and prices of a commodity for the benefit of participating countries. An agreement usuallyinvolves a consensus on quantities traded, prices, and stock management. A number of internationalcommodity agreements serve solely as forums for information exchange, analysis, and policy discussion.USTR leads United States participation in two commodity trade agreements: the International TropicalTimber Agreement and the International Coffee Agreement (ICA). Both agreements establishintergovernmental organizations with governing councils.International Coffee AgreementThe International Coffee Organization (ICO) is the main intergovernmental organization for coffee. ICOexporting members account for more than 97 percent of world coffee production, and it’s importingMembers, are responsible for around 80 percent of world coffee consumption. The ICO makes apractical contribution to the world coffee economy and to the improvement of living standards indeveloping countries by facilitating intergovernmental consultation and coordination regarding coffeepolicies and priorities, by encouraging a sustainable world coffee economy, by initiating coffeedevelopment projects to add value and improve marketing, by increasing world coffee consumptionthrough innovative market development activities, by promoting the improvement of coffee quality, byworking closely with the global coffee industry through a 16 member Private Sector Consultative Board,and by ensuring transparency in the coffee market with objective and comprehensive information onthe world coffee sector by means of statistics and market studies.The United States led recent efforts to renegotiate the ICA, and the text of the seventh InternationalCoffee Agreement (ICA 2007) was adopted by the International Coffee Council on September 28, 2007.The new ICA is designed to enhance the ICOs role as a forum for intergovernmental consultations, toincrease its contributions to meaningful market information and market transparency, and to ensurethat the organization plays a unique role in developing innovative and effective capacity building in thecoffee sector. Among the features of the new agreement is a first-ever "Consultative Forum on CoffeeSector Finance" to promote the development and dissemination of innovations and best practices thatcan enable coffee producers to better manage financial aspects of the inherent volatility and risksassociated with competitive and evolving markets. Other notable changes include expanding theorganizations work in providing relevant statistical and market information and strengthening efforts todevelop, review and implement capacity building projects that are particularly important to small-scalefarmers in key developing country trading partners.
  3. 3. Global Business EnvironmentCUN110501021International Tropical Timber AgreementThe International Tropical Timber Agreement (ITTA) is often described as a "hybrid" agreement becauseit combines a traditional commodity trade agreement with objectives that include sustainablemanagement of tropical forests. The ITTA established the International Tropical TimberOrganization (ITTO), an intergovernmental organization with 59 members who collectively account forabout 80 percent of the worlds tropical forests and 90 percent of the annual trade in tropical timbertrade. The ITTO promotes market transparency by collecting, analyzing and disseminating data on theproduction and trade of tropical timber; assists in developing, funding and implementing projects andother activities to build capacity to sustainably manage and use tropical forests; and facilitatesintergovernmental consultation and international co-operation on issues relating to the trade andutilization of tropical timber and the sustainable management of its resource base.Negotiations for a successor agreement to the ITTA 1994 were concluded in 2006, and the newagreement (ITTA 2006) is expected to further strengthen efforts to promote tropical timber trade in thecontext of sustainable management of tropical forests.
  4. 4. Global Business EnvironmentCUN110501021Global System of Trade Preferences (GSTP)The Agreement establishing the Global System of Trade Preferences (GSTP) among Developing countrieswas signed on 13th April, 1988 at Belgrade following conclusion of the First Round of Negotiations. TheGSTP came into being after a long process of negotiations during the Ministerial Meeting of the Group of77, notably at Mexico City in 1976, Arusha in 1979 and Caracas in 1981. The Ministers of Foreign Affairsof the Group of 77 in New York set up the GSTP Negotiating Committee in 1982. The New DelhiMinisterial meetings, held in July 1985, gave further impetus to the GSTP negotiation process. TheBrasilia Ministerial Meeting held in May 1986 launched the First Round of GSTP Negotiations. At theconclusion of the First Round in April 1988 in Belgrade, the GSTP Agreement was signed on 13 April1988. The Agreement entered into force on 19th April 1989. Forty-four countries have ratified theAgreement and have become participants. The GSTP establishes a framework for the exchange of tradeconcessions among the members of the Group of 77. It lays down rules, principles and procedures forconduct of negotiations and for implementation of the results of the negotiations. The coverage of theGSTP extends to arrangements in the area of tariffs, para-tariff, non-tariff measures, direct trademeasures including medium and long-term contracts and sectoral agreements. One of the basicprinciples of the Agreement is that it is to be negotiated step by step improved upon and extended insuccessive stagesThe GSTP Negotiating Committee at the Senior Officials’ level also met at Accra on the sidelines of theUNCTAD XII Ministerial Conference and agreed on; a) participants agreed to carry out negotiations onthe basis of across-the-board, line-by-line, linear cut of 20 to 40 per cent on dutiable tariff lines, to becombined with request-and- offer and/or sectoral negotiations; and b) agreement was reached amongparticipants to assume commitments on at least 70% of dutiable tariff lines.MembershipCurrent members’ states, participating since 19 April 1989, is: Bangladesh, Cuba, Ghana, India, Nigeria,Singapore, Sri Lanka, Tanzania, and ZimbabweAdditionally current members states are: Algeria, Argentina, Benin, Bolivia, Brazil, Cameroon, Chile,Colombia, Ecuador, Egypt (16-07-89), Macedonia, Guinea, Guyana (04-05-89), Indonesia, Iran, Iraq,North Korea, South Korea (11-06-89), Libya, Malaysia (31-08-89), Mexico (13-05-89), Morocco (13-07-89), Mozambique, Myanmar, Nicaragua (03-05-89), Pakistan (08-07-89), Peru (15-04-89),Philippines,Sudan, Thailand, Trinidad and Tobago, Tunisia (25-08-89), Venezuela, Vietnam and the trade bloc ofMERCOSUR (2-11-2006)Applicants are: Burkina Faso, Burundi, Haiti, Madagascar, Mauritania, Rwanda, Suriname, Uganda andUruguay.
  5. 5. Global Business EnvironmentCUN110501021Former members: Yugoslavia (from 19-04-1989), Romania (from 19-04-1989 until its EU membership)