`Move to limit agriculture exports not against WTO'

`Move to limit agriculture exports not against WTO'

Adianto P. Simamora, The Jakarta Post, Jakarta

Experts said steps taken by a number of countries to limit
exports of agricultural commodities to prop up prices are not
against the World Trade Organization (WTO) ruling as member
countries have not reached an agreement on a trade and
competition policy.

"As long as the WTO member countries have not yet agreed on
the WTO's Singapore issues, which include a trade and competition
policy, producing countries are able to regulate their own
exports and output of agricultural commodities," Soy Pardede, the
director for trade affairs at the Indonesian Chamber of Commerce
and Industry (Kadin), told The Jakarta Post on Monday.

Besides the trade and competition policy, the new Singapore
issues also include trade and investment, government procurement
and trade facilitations.

Soy made the comment following a plan by Indonesia and
Vietnam, two of the world's largest coffee producers, to limit
overseas sales of robusta beans.

Last month, the Vietnam Coffee and Cocoa Association (Vicofa)
and the Association of Indonesian Coffee Exporters (AICE) signed
a memorandum of understanding (MOU) in Hanoi to coordinate their
coffee exports.

The two countries produce about 65 percent of the world's
supply of robusta beans. The two rivals Brazil and Colombia grow
mostly more expensive arabica.

Indonesia's coffee production averages at about 500,000 tons
each year, of which more than 85 percent is exported. Vietnamese
coffee production leapt from about 413,600 tons in 1997 to
900,000 tons in 2001.

Separately, the world's top rubber producers -- Indonesia,
Malaysia and Thailand -- also signed an MOU in Bali in August
2002 to set up a consortium called the International Tripartite
Rubber Companies Consortium (ITRCo). Its main duty is to help
boost the price of the commodity.

The three countries jointly contribute about 95 percent to the
world's natural rubber production.

The consortium will purchase the commodity from their
respective domestic market in case of oversupply so that the
price will gradually increase. But in case of high demand and
short supply, the consortium will release its stock.

The ITRCo was established following the forming of the
International Tripartite Rubber Council (ITRC) by the three
countries, which pledged to cut rubber output by 4 percent and
exports by 10 percent every year.

Sri Adiningsih, an economist from the Gadjah Mada University
shared Soy's opinion, saying that the move was still relevant as
the rich member countries of the WTO continued to protect their
local farmers.

"It (the policy to limit exports) is an understandable policy
and it is not against the WTO ruling," Sri told the Post.

Both experts, however, urged producing countries to explain
the move to the international community before implementing their
joint policy.

"This is a cartel like OPEC," Soy added. "A cartel's producing
countries has to announce their policy to the international
community on their total of exports and production."

He was referring to the Organization of Petroleum Exporting
Countries, which currently regulates the oil production of its
members.