Foreign Relations of the United States, 1964–1968, Volume IX, International Development and Economic Defense Policy; Commodities

352. Telegram From the Mission in Geneva to the Department of State¹

Geneva, October 4, 1967, 0956Z.

1071. SUBJECT: Cocoa Consultations. Ref: Geneva 1036.²

1. Late Tuesday³ evening producers and consumers agreed on package deal containing essential elements cocoa agreement. Package is essentially that described para 8 Geneva 1036. While producer dels here have accepted package they did request time to telephone governments for final approval.

2. US del made strong effort as instructed Dept.’s 47501⁴ to hold lower level free zone below 24 cents to extent that Chairman forced cancel three scheduled meetings including plenary while US del met privately with heads producer delegations. US del unable make any impression whatsoever as: (A) producers had certain knowledge that other consumers supported 24.5 cents and some willing to [go] even higher; (B) some consumers advising producers they would oppose any lower price; (C) producers willing gamble US would not break up conference in face UNCTAD II; and (D) Chairman unwilling present any figure lower that 24.5 cents. At insistence US del Chairman did get clarification and acceptance by producers of other open points and then US del finally gave in and accepted package.

3. Initial reaction of industry advisers was one of anger and disillusionment at what they called betrayal by Solomon and Fried as to standby nature of agreement.⁵

4. Schedule for Wednesday includes plenary to consider report of buffer stock working party, approve final text of package and decide on when negotiation conference should be called. Voting will be discussed by consumers but final settlement left to conference. Brazil has not mentioned preference issue since early in meeting.

Tubby

1. Source: Department of State, Central Files, INCO–COCOA 3 UNCTAD. Limited Official Use; Priority. Repeated to Abidjan, Accra, Bonn, The Hague, Lagos, London, Paris for USOECD, Rio de Janeiro, Yaounde, and USUN.
2. Dated October 1 (incorrectly dated September 1). (Ibid.)
3. October 3.
4. Dated October 2. (Department of State, Central Files, INCO–COCOA 3 UNCTAD)
5. On October 9 from New York, the U.S. cocoa trade and industry issued a statement criticizing U.S. acceptance of the international cocoa agreement. It noted that “despite assurances from government officials that they would not join in a scheme which is unworkable and uneconomic, they have now agreed to a price and quota mechanism completely at variance with their own assurances and contrary to the considered advice of the total industry. It is regrettable that political considerations have obscured the economic shortcomings of the proposed plan.” The statement further complained that “the proposed agreement would create an unnecessarily cumbersome international bureaucracy which must inevitably threaten the free market in cocoa” and cause “at great administrative cost many more problems than it cures and will restrict the continued expansion of the cocoa economy.” (Text in circular telegram 51541 to 11 posts, October 10; ibid., INCO–COCOA 4)