REPORT OF THE 7 MEETING OF THE NATIONAL FOCAL POINT FOR ASEAN COCOA CLUB (ACC) ON ASEAN COOPERATION AND

JOINT APPROACHES IN AGRICULTURE AND FOREST PRODUCTS SCHEME 2-3 August 2004 Berjaya Times Square Hotel & Convention Center, Kuala Lumpur, Malaysia

TH

INTRODUCTION 1. The Seventh Meeting of the ASEAN Cocoa Club on the ASEAN Cooperation and Joint Approaches in Agriculture and Forest Products Promotion Scheme was held on August 2-3, 2004 at Berjaya Times Square Hotel & Convention Center, Kuala Lumpur, Malaysia. The Meeting was attended by 31 delegates of the government and private sectors from Indonesia, Lao PDR, Malaysia, Singapore, Thailand and Vietnam. The list of the delegates is presented as ANNEX 1.

2.

AGENDA ITEM 1: OPENING SESSION Opening Remarks by Chairman of ASEAN Cocoa Club 3. The Chairman of the ACC Dato' Dr. Azhar Ismail welcomed all delegates to the meeting. He highlighted that a number of activities has been implemented since the sixth meeting of the ACC in Makassar, Indonesia and the focus of this seventh meeting was to formulate a new workplan for the next five years including the formulation of the ASEAN Cocoa Contract.

4.

The Chairman also highlighted the situation of the ASEAN cocoa economy and issues to be addressed were on marketing and quality, which affect the cocoa prices both on the upstream and downstream activities.

AGENDA ITEM 2: ELECTION OF CHAIRMAN AND VICE-CHAIRMAN 5. The meeting unanimously elected Dato' Dr. Azhar Ismail, Director General of the Malaysian Cocoa Board and Chairman of the ACC as Chairman and Dr. Delima Hasri Azahari, Director General of Processing and Marketing of Agricultural Products, Ministry of Agriculture, Indonesia as Vice-Chairman.

AGENDA ITEM 3: ADOPTION OF AGENDA 6. The meeting adopted the Agenda as in ANNEX 2.

AGENDA ITEM 4: BUSINESS ARRANGEMENTS 7. The meeting was held in plenary.

AGENDA ITEM 5: MATTERS ARISING FROM THE 25th SOM-AMAF, 18-19 RD TH TH AUGUST 2003, 3 SOM-AMAF + 3 MEETING, 20 AUGUST 2003, 25 AMAF, ST RD ND 21 AUGUST 2003 AND 3 AMAF + 3 MEETING, 22 AUGUST 2003, KUALA LUMPUR, MALAYSIA 8. In the absence of the representative from ASEAN Secretariat, the meeting took note of the report presented by representative from the International Division of the Ministry of Plantation Industries and Commodities, Malaysia on matters arising from the above-mentioned meetings in relation to ACC as in ANNEX 3. The meeting was highlighted on the review of the Memorandum of Understanding (MOU) on ASEAN Cooperation in Agriculture and Forest Products Promotion Scheme (1999-2004), which would expire th in October 2004. The SOM-25 AMAF expressed their support on the extension of MOU as it had proven that the MOU had enhanced cooperation between public and private sectors in ASEAN economic activities. The draft MOU will be submitted to SOM-AMAF at their coming meeting in October 2004 for endorsement and to be signed by AMAF in Yangon, Myanmar. The draft MOU will be discussed at the Special SOM-AMAF Meeting to be held from 17-20 August 2004 in Kuching, Sarawak. The draft MOU was prepared by Malaysia and adopted by ASEAN and was circulated to member countries for comments. The second highlight was on the Strategic Plan of Action (SPA) in Agriculture and Forest Products Promotion Scheme (2005-2010). The th 25 Meeting of the ASEAN Ministers on Agriculture and Forestry considered and adopted the report on the progress of sectoral

cooperation activities in food, agriculture and forestry and requested SOM-AMAF to review the SPA on ASEAN Cooperation in Food, Agriculture and Forestry (1999-2004) as well as the Hanoi Plan of Action (HPA) (1999-2004). The next phase of the Strategic Plan was going to be formulated accordingly. The meeting was informed that the AMAF was considering adopting the Vientiane Plan of Action for five years with the view to realizing the ASEAN vision 2020 on Food, Agriculture and Forestry. All subsidiary bodies of SOM-AMAF were requested to submit their inputs on the review of the projects and activities under their respective purviews and to suggest new ideas for the next phase of the SPA and HPA. A special task force was formed to work on and propose an action plan as well as an appropriate mechanisms by which the ASEAN joint approaches could pursue matters related to trade in ASEAN agricultural and forest products. This would enable them to negotiate with greatest earnest and more effectively among members countries in projecting ASEAN common position in the international fora. ASEAN Secretariat has recommended to SOM-AMAF to task the existing Joint Committee on ASEAN cooperation in Joint Product Promotion Scheme which was also involved in handling trade issue concerned, to look into the matter.
TH

AGENDA ITEM 6: MATTERS ARISING FROM THE 11 MEETING OF THE JOINT COMMITTEE ON ASEAN COOPERATION AND JOINT APPROACHES IN TH AGRICULTURE AND FOREST PRODUCTS PROMOTION SCHEME, 30 JUNE ND 2 JULY 2004, YANGON, MYANMAR 9. The meeting took note of the matters arising in the 11th Meeting of the Joint Committee on ASEAN Cooperation and Joint Approaches in Agriculture as in ANNEX 4. The meeting was highlighted on the review of the MOU on ASEAN Cooperation in Agriculture and Forest Products Promotion Scheme (1999-2004), which would expire in October 2004. The Joint Committee agreed to extend for another five years because it remains relevant and continues to serve as the basis to pursue cooperation with the private sector and to form joint positions on issues related to trade of ASEAN agriculture and forest products. Member countries were requested to submit additional comments to the ASEAN Secretariat for consolidation and finalization. The draft MOU will be submitted to SOM-AMAF at their coming meeting in August 2004 in Kuching, Sarawak for consideration before being signed by AMAF in October in Yangon, Myanmar. The second highlight was on the SPA in Agriculture and Forest Products Promotion Scheme (2005-2010). The SPA was not finalized

because, except for National Focal Points Working Groups (NFPWGs) for Peas and Beans, the others NFPWGs had not yet convened their respective meetings. All NFPWGs had been requested to submit their strategic plan of action (2005-2010) to the ASEAN Secretariat for consolidation immediately after the conclusion of their meetings.

AGENDA ITEM 7: ENHANCEMENT OF INTERNATIONAL COMPETITIVENESS OF ASEAN FOOD AND AGRICULTURAL PRODUCTS/COMMODITIES Formulation of ASEAN Cocoa Contract 10. The meeting noticed that the formulation of the ASEAN cocoa contract needed longer time to be completed. In view of this, the meeting agreed that the Working Group on ASEAN Cocoa Contract and the Cocoa Association of Asia (CAA) should meet to further discuss the completion drafting of a uniform cocoa contract that include formation of an arbitration panel. As a guide, the frame work of the draft ASEAN cocoa contract as in ANNEX 5, which had been prepared earlier by the Working Group on cocoa contract, should be used as a reference in coming up with a uniform cocoa contract by the end of 2004. The final contract to be named ASEAN Cocoa Contract and should be agreed by the ACC. Tariff and Non-Tariff Barriers on Cocoa Beans and Cocoa Products 12. The representative from the International Division of the Ministry of Plantation Industries and Commodities, Malaysia informed the meeting about the inclusion of cocoa products in the Early Harvest Package (EHP) on the ongoing negotiation on ASEAN-China and ASEAN-India Free Trade Area (FTA). st At the last meeting of the ASEAN-China held on 1 August 2004, the EHP had been agreed and the protocol had been signed. The meeting was further informed that the ASEAN-China FTA, the EHP was on individual ASEAN member countries list with ASEAN. One ASEAN member country might be different from other ASEAN member country list. For Malaysia, all cocoa products except chocolate were already included in the EHP where the st import duty was reduced from 15% to 10% in 1 January 2004, 5% in 2005 and 0% in 2006.

11.

13.

The meeting was informed that for ASEAN-India FTA, it was a common list. A total of 105 products were included on the Early Harvest Package, which also included cocoa butter (HS 1804) and cocoa powder not containing added sugar or other sweetening matter (HS 1805). Currently, India is imposing MFN duty of 30% for cocoa butter and cocoa powder not containing added sugar or other sweetening matter. The protocol was expected to be signed by the ASEAN Economic Minister (AEM) Meeting in September 2004. st Thus the implementation date would commence by 1 November 2004

where the tariff would be reduced to 15%, 10% by 1 January 2005, 5% by 1 st November 2006 and 0% by 1 November 2007 for cocoa butter and unsweetened cocoa powder. 14. During the last meeting on ASEAN-India FTA held in Kuala Lumpur, the discussion was on the proposed draft for the protocol and the rules of origin under the Common Effective Preferential Tariff (CEPT). To enjoy this arrangement, the local content must meet the criteria of 40%. The final draft report of the last meeting was not available yet. A copy of the final draft protocol would be circulated once the protocol had been adopted and signed in September 2004 by the AEM. The meeting also took note of the other development on the ASEAN-Korea FTA, ASEAN-CER (New Zealand and Australia), ASEAN-EU and ASEANUSA. The meeting also took note on the concerned of the members in carrying out future negotiation as ASEAN and not as one individual country.

st

15.

16.

AGENDA ITEM 8: ENHANCEMENT OF ASEAN COOPERATION AND JOINT APPROACHES IN INTERNATIONAL AND REGIONAL ISSUES Codex Committee on Cocoa Products and Chocolate 17. The meeting was informed that the Codex Committee on Cocoa Products rd and Chocolate held its Nineteenth session in Fribourg, Switzerland, from 3 th to 5 October 2001 and took note of the report on the Codex Committee on Cocoa Products and Chocolate as in ANNEX 6.

AGENDA ITEM 9: DEVELOPMENT, ACCELERATION OF TRANSFER AND ADOPTION OF NEW TECHNOLOGIES Project on Cocoa Pod Borer (CPB) Management Using Biological Control Agents and Plant Resistant Materials 18. The meeting was informed that this project was undertaken by Indonesia and th Malaysia. At the 6 ACC Meeting in Indonesia, the research working group agreed to conduct this project on each individual country capacity. This was due to the fact that management of CPB is currently one of the main research programmes in both countries. The progress of the project would be presented at workshops or seminars. The meeting was also informed on the problems of exchanging clonal materials between the countries. It was suggested that the exchange of clonal materials for research purposes could be done through government to government (G to G) agreement. Proposed Trials on Selected Cocoa Progeny in Selected ASEAN Region

19.

20.

The meeting was informed that a set of crosses have been proposed by Malaysia for regional progeny trial. The trial would consist 20 progenies comprising of 10 common progenies and 10 local progenies for evaluation for yield, bean characteristics and tolerance to common pest and diseases. The working group agreed that each country would conduct the trial separately. Exchange of seeds on common crosses would be made where the parental clones are available while local crosses would be done by each country. Indonesian Coffee and Cocoa Research Institute (ICCRI) has indicated that the trial would be conducted in 2005 because they have prior commitment to conduct their other own progeny trials scheduled in 2004. Thus, a revised schedule would be made to enable both countries to conduct the trial simultaneously. In the absence of funding from ACC, the Research Working Group on this project agreed that the funding of each individual project would be funded by the each country.

21.

AGENDA ITEM 10: ENHANCEMENT OF PRIVATE SECTOR INVOLVEMENT 22. The meeting took note on the formation of the Cocoa Association of Asia (CAA)as in ANNEX 7, which was recently registered in Singapore. So far, membership comprises of grinders and traders in the region.

AGENDA ITEM 11: FORMATION OF WORKING GROUP UNDER ACC TO INCREASE THE EFFECTIVENESS IN THE IMPLEMENTATION OF ACC ACTION PLAN Food Safety Working Group 23. The meeting was informed that a survey had been carried out to address the issues on heavy metals in cocoa products. The results showed that half of the survey respondents did not monitor agricultural chemicals or heavy metal in cocoa beans and were not aware if pesticides were being used by the cocoa farmer or estates. The results of the survey also showed that the agricultural chemicals (organochlorins and organophosphate pesticides) in cocoa beans from a blend of different origins were below the detection limit. There was no major problem with the importing country concerning the heavy metal content. The working group should continue to gather more information on the limits of chemical residue set by importing country so that pro-active action could be taken. The detail results of the Cocoa Bean Survey carried out by the Food Safety Working as in ANNEX 8. ASEAN Cocoa Club Sub-Committee on Bean Quality

24.

25.

26.

27.

The meeting was informed that a survey was carried out by this subcommittee to monitor and to improve the quality of ASEAN cocoa beans by comparing different country specification and interpretation. The results of the study showed that there were minimal differences between the established quality standards across ASEAN. The study also showed that there were no major issues with bean count, broken beans, foreign matter, waste (in general) and moisture with respect to interpretation of the quality specifications and method of measuring quality. To further improve the image of bean quality, the quality standard should be persistently and legislative enforce in the context of quality standard of each country, The detail results of the survey carried out by ACC Sub-Committee on Bean Quality appears in ANNEX 9.

28.

29.

30.

AGENDA ITEM 12: REVIEW OF MOU ON ASEAN COOPERATION AND JOINT APPROACHES IN AGRICULTURE AND FOREST PRODUCTS PROMOTION SCHEME-ASEAN COCOA CLUB Review on the ASEAN Cocoa Club (ACC) Workplan 1999-2004 and Proposal on New Workplan 2005-2010 31. The meeting took note on the progress report of the Workplan 1999-2004 National Focal Points for ACC on ASEAN Cooperation and Joint Approaches in Agriculture and Forest Products Promotion Scheme presented by the ACC Secretariat as in ANNEX 10. The ACC Secretariat also highlighted that the establishment of ACC Cocoa Database remained incomplete as some member countries had not provided the necessary information as requested by the Secretariat. The homepage could be accessed through the Malaysian Cocoa Board homepage http://www.koko.gov.my/acc. ASEAN Cocoa Club Secretariat requested member countries to furnish their information. The new formulated Workplan 2005-2010 for the National Focal Points for ACC on ASEAN Cooperation and Joint Approaches in Agriculture and Forest Products Promotion Scheme was discussed and formulated as in ANNEX 11.

32.

33.

AGENDA ITEM 13: OTHER MATTERS 34. Indonesia informed the meeting on the following matters:Issues on high content of pesticides known as dichlorvos in Venezuelan cocoa beans being rejected by Japan. This pesticide was not found in Indonesian beans. Member countries might want to take note of this information.

The 1 Annual Parade of Tea, Coffee & Cacao to be held from 11-17 August 2004 at Center Court MAL CIPUTRA, Jakarta, Indonesia to be organized by Directorate General of Processing and Marketing for Agriculture Product, Ministry of Agriculture, Indonesia. Member countries were invited to take part in this parade. Requested information on the issues on Automatic Detention being imposed on not only to the Indonesian cocoa beans but other countries exported to USA. The information on this matter was to be made available and the observer from Vietnam agreed to forward the report to the ACC and Indonesia.

st

35.

Malaysian Cocoa Board informed the meeting on the organization of the Malaysian International Cocoa Conference (MICC) to be held in the first week of September 2005 or earlier. The cocoa fair would comprise of three events: conference, dinner and exhibition. Member countries were invited to participate in the cocoa fair events. DATE AND VENUE OF THE NEXT MEETING 36. The meeting agreed that the 8 Meeting of the ACC on the ASEAN Cooperation and Joint Approaches in Agriculture and Forest Products Promotion Scheme to be held in Bali, Indonesia in June, 2005. Indonesia is to forward the exact date to the ACC Secretariat.
th

ADOPTION OF THE REPORT 37. The meeting unanimously adopted the report of the Seventh Meeting of the ACC on the ASEAN Cooperation and Joint Approaches in Agriculture and Forest Products Promotion Scheme held in Kuala Lumpur, Malaysia on 2-3 August, 2004.

ACKNOWLEDGEMENT 38. The Chairman of the ACC expressed his gratitude and thanks to all delegates for their active participation in the meeting. The delegation of Indonesia, Lao PDR, Malaysia, Singapore, Thailand and Vietnam expressed their sincere appreciation to the government of Malaysia in particular Malaysian Cocoa Board for their warm hospitality accorded to them and the excellent arrangements made for the meeting. The meeting was held in the traditional spirit of ASEAN cordiality and solidarity.

39.

40.