WASHINGTON-Reports from Asia that ratification of the third International Natural Rubber Agreement is assured are extremely premature, according to U.S. sources.
A source who asked not to be identified said European Union intransigence over the appointment of a French deputy executive director to the International Natural Rubber Organization has slowed progress in INRA talks and could kill them altogether.
Member nations of INRA met in Kuala Lumpur, Malaysia, Nov. 27 through Dec. 1 to discuss the new agreement.
A Dec. 1 Reuter report said the 27 INRA members-including the U.S.-had agreed in principle to sign the rubber pact before the current one lapses Dec. 28.
``The indications are that both the producers and consumers will sign on or before Dec. 28,'' Anura Ekanayake, chairman of the International Natural Rubber Organization, was quoted as saying in the report.
As currently planned, the four-year INRA would commence Jan. 1, 1997, with a one-year interim period to allow the legislatures of the member countries to ratify the pact.
But the U.S. made no promise at Kuala Lumpur to sign the new INRA, according to the anonymous source.
Only Japan and Thailand indicated their willingness to sign, the source said.
The entire meeting nearly was wrecked the first day when France insisted members vote on the nomination of a Frenchman as INRO deputy executive director before anything else was discussed. The other members considered this move ``ridiculous,'' and refused it, according to the source.
INRA 3, if signed, will operate only as an interim agreement until Jan. 1, 1997, and will lapse if 80 percent of the member countries don't ratify it by then. ``Nobody wanted to spend a couple of hundred thousand dollars to send a deputy executive director to Kuala Lumpur if he might be recalled after six months or a year,'' the source said.
Angered by the other members' refusal, France stalled consideration of all other INRA issues for the next four days, he said. Backed by other EU countries, France refused some nations' compromise offer to appoint a deputy executive director once 75 percent of the members had signed INRA 3 and it went into effect provisionally.
``Several of the European delegates were quite angry with France for refusing what they thought was a reasonable offer,'' he said. ``But when push came to shove, they voted with France.''
Finally, according to the source, the EU sponsored a vote to abolish the positions of INRO executive director and buffer stock manager, and insisted the vote be conducted as a simple majority vote.
Other countries were horrified because EU countries make up 15 of the 27 INRO members.
Members called United Nations attorneys in Geneva. The lawyers ruled that INRO could not abolish the posts of buffer stock manager and executive director because they are integral parts of the agreement.
``The upshot was that delegates had one day to scramble through the issues they thought they would have five days to consider,'' the source said. ``Everyone walked out wondering whether they wanted an INRA controlled by the Europeans. Because they are a majority, they can demand a specific vote and stall everything.''
INRO delegates are supposed to meet before Dec. 28, but no meeting was scheduled as of Dec. 5, the source said.
If INRA member nations cannot reach accord on a new agreement by Dec. 28, they must, in theory, begin dismantling the organization and refunding money for INRA operations.
But Thomas E. Cole, president of the Rubber Manufacturers Association, said liquidation probably won't take place very quickly.
``Very little will happen at first, since the door remains open for people to sign until Jan. 1, 1997,'' he said. ``The agreement could still go into force provisionally in 1996.''
Rubber manufacturers and organized labor both advocate the new pact, but the U.S. state and treasury departments claim commodity agreements do nothing but distort world markets.