UN to host meeting on how to save global rubber pact

UN to host meeting on how to save global rubber pact

KUALA LUMPUR (AFP): A United Nations body is to host a meeting of rubber producers and consumers in Geneva on March 28 to salvage a new global price pact now in limbo for want of consumer support, officials said yesterday.

The meeting, under the auspices of the UN Conference on Trade and Development, is to set a new deadline for signatures by members of the International Natural Rubber Organization (INRO) who had failed to meet the original Dec.28 deadline.

INRO buffer stock manager James Hegarty said the sole purpose of the UN meeting was to extend the original deadline for agreement to save the 1995 International Natural Rubber Agreement (INRA III).

"I am certainly pleased with this positive development as this will provide the opportunity for governments who have not signed the agreement to do so," Hegarty told AFP.

INRO had asked for the special UN meet at the instance of some members, whose failure to meet the deadline had put the pact in jeopardy.

"Obviously, this course of action is being taken with confidence that we will end up with the required number of signatures for an agreement," Hegarty said.

INRA III, hammered out in Geneva in February 1995 after more than two years of talks, was to succeed the 1979 INRA II, which expired on Dec.28 last year.

But it can only succeed INRA II if it garners 75 percent of votes from key producers and a similar proportion from key consumers.

At the expiry of the deadline, only five producers -- Indonesia, Malaysia, Thailand and Sri Lanka -- and two consumers, namely Japan and the European Union, had signed.

While the producers garnered enough votes on their side for agreement, consumers, in the absence of the United States -- a key importer that commands close to 75 percent of the votes -- failed to meet the target.

U.S. failure to sign the pact sparked concern over the fate of INRO, which administers INRA through a buffer stock mechanism to stabilize rubber prices.

According to official sources, the UNCTAD meeting is expected to fix end of June or end of July as the new deadline for signatures.

The Kuala Lumpur-based INRO, set up in 1979 by the world's six largest rubber producers and 21 consuming countries including the European Union, is now in its interim period until the new pact is ratified by Jan.1, 1997.

It means INRO will lie dormant until the four-year INRA III comes into force.

Hegarty said decision to extend the deadline would boost sentiment at INRO's semi-annual council meeting scheduled for April 22-27, which could discuss preparations for implementation of INRA III.

INRO's daily market indicator price was at 316.58 Malaysian/Singapore cents a kilo on Thursday compared with 160 cents towards the end of 1993.