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Last Updated: Thursday, 3 May 2007, 12:19 GMT 13:19 UK
Starbucks strikes Ethiopia deal
Man holding coffee beans
Ethiopia prides itself as the home of coffee bean cultivation
Starbucks and the Ethiopian government have reached an agreement which could help end a dispute over trademarks.

The two sides agreed in principle to sign a licensing and marketing deal which recognises the importance of Ethiopia's speciality coffee beans.

Cultivation of the coffee bean first began in Ethiopia, and the country has been seeking to trademark its best-known coffee beans.

However, US officials have argued that the plan is not economically viable.

Ethiopia and UK charity Oxfam claimed Starbucks was attempting to block plans by the African nation to trademark its Sidamo, Harar and Yirgacheffe coffee beans.

But the coffee chain giant denied initiating opposition to the trademark application, insisting the decision to do so was taken by the US National Coffee Association (NCA).

The NCA had warned that if Ethiopia succeeded in obtaining the trademarks, it may price its coffee beans uncompetitively high.

'Positive change'

Ethiopia hopes to substantially lift the income of its coffee farmers through the trademarking plan.

The eyes of Africa will be on this agreement, which could even set a precedent for further deals beyond Ethiopia in the future

The poverty stricken country is heavily reliant on coffee bean exports, and about a quarter of its 80 million people are involved in the industry.

Oxfam welcomed news of the licensing agreement between Ethiopia and Starbucks, adding it could add momentum to the country's trademarking project.

"This action by Starbucks could represent a huge step towards a real positive change for the 15 million Ethiopians who depend on coffee for their livelihood," the charity said.

"The eyes of Africa will be on this agreement, which could even set a precedent for further deals beyond Ethiopia in the future."

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