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ICO ISSUES REBUTTAL ON UCDA ALLEGATIONS

The ICO has issued a point-by-point rebuttal of the Media release, circulated by Uganda after they departed the organisation. When the UCDA issued their statement, it lacked a lot of diplomacy and revealed some clearly deep-seated resentments.

But why is Uganda so upset, and is it justified? It’s not unusual for an amount of fogginess to prevail over commercial disputes, often attributed to ‘poor communication’. It is interesting therefore, to note that the ICO so completely refutes the statement from the UCDA, that there is no miscommunication here. It appears that one party must simply, be wrong.

Let’s look at the statement from the UCDA. In the 2nd paragraph it states:

Uganda has raised key issues that the agreement has not addressed including the following

They then list seven grievances. The first two of which are of particular interest:

  1. Barriers to trade, imposed through high tariffs on processed coffee by developed and importing countries which disadvantage producer countries like Uganda, resulting in farmers getting low prices.
  2. Promotion of value addition. Uganda needs unconditional market access that allows for export of value-added coffee, not only green coffee. The ICA should have increased focus on value-addition, with protracted programs that aim at transferring value to the farm gate prices

The UCDA says clearly that they expect the ICO to address these issues. Bear in mind that while the ICO seems to do a lot in areas such as promotion, education, development projects and more, they have no power to set tariffs.

“You cannot claim your share of the meal while you are not at the dinner table”

African Maxim used by ICO in response to UCDA withdrawal

In responding to these first two points, the ICO say these objectives are addressed under “ARTICLE 24 – Removal of obstacles to trade and consumption”

I spent some time to read the ICA 2007, which isn’t that hard once you get past a lot of preamble. What it conveyed to me was that the document forms a contract of partnership between the members. It is not a one-sided commitment of the ICO to perform, but a framework for collaboration to monitor, and report on. This lays the groundwork for the organisation to assist in influencing policy by representing the industry to policy makers with a single voice.

An example of this is in a report that the ICO carried out in 2019, where they require countries to report tariff changes, so they can monitor potential obstacles to trade.

In accordance with Article 24 of the ICA 2007 and the Rules on Statistics – Statistical Reports (ICC-102-10), Members are required to notify the Organization of any changes to taxes and duties on coffee. Information on changes in non-tariff barriers, especially SPS and TBTs, are regularly reported to the WTO and will be integrated in ICO reports

icc-126-2e-obstacles-consumption.pdf (ico.org)

Article 24 lays out a number of commitments that each member should make, to stimulate coffee consumption through lowering barriers to trade, including tariffs.

Specifically in relation to the unequal treatment of value-added services, by importing countries over developing producing countries, The ICO raises Article 26 of the agreement as well. This is what Article 26 says:

“Members recognize the need of developing countries to broaden the base of their economies through, inter alia, industrialization and the export of manufactured products, including the processing of coffee and the export of processed coffee. Members should avoid the adoption of governmental measures which could cause disruption to the coffee sector of other Members”

Uganda has said the ICO is supporting a system that is resulting in unfair treatment of producing countries by imposing tariffs. So we imagine that Uganda, which has been a member of the ICO from 2009 has voiced their concerns or tabled alternative proposals? Not according to the ICO. In their rebuttal, they repeatedly make the point that Uganda has not been engaged with the process at all.

In their statement, the ICO is unambiguous.

“Uganda has made no proposals for the revision of Article 26 in the meetings of the WGFA, which is currently studying proposals for amendment to this Article.”

If the ICO is correct, then I’m not clear what Uganda’s cause for complaint might be, but this should be easy to check. Uganda should immediately request copies of the minutes of meetings where they have raised the issues previously. If they have written letters to the ICO on the subject, they should publish those, so we can see the efficacy of their argument.

Point by point, the ICO refutes the allegations made against them. When we first reported the dispute, we considered data that was presented as factual from the UCDA, a government organisation to be prima facie. Now that has to be questioned.

The UCDA issued a statement, in which one reason for leaving the organisation, was that the ICO has done nothing to abate punitive tariffs against Uganda. Around the same time a Senior Agriculture Advisor to the President of Uganda, wrote an article claiming tariff’s which the EU applied to roasted coffee, amounted to economic colonialism.

These statements turned out to be provably incorrect.

Having told the ICO publicly that they were leaving the organisation because it was not fit for purpose, the UCDA went on to say that they wanted to come back! but under better terms.

The statement read.

“The Government of Uganda will continue to engage with the International Coffee Organisation (ICO) to negotiate better terms.”

This must be some kind of new negotiating strategy that is too advanced for me to understand. While we wait for their cunning plan to insult their way to a better deal, we look forward to seeing Uganda produce the evidence to support their claims.

The ICO keeps the door open, as they should, by choosing an African Maxim.

All ICO Members, as indicated on different occasions, would have welcomed the contributions of Uganda to the WGFA, however, as an old African proverb says “You cannot claim your share of the meal while you are not at the dinner table”

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