There is enclosed herewith the text of a draft corn agreement between the
United States and Argentina which you are requested, unless you perceive
objection, to submit to the appropriate Argentine officials. In doing
so, it should be mentioned that this Government of course reserves the
right to propose changes with respect to any portion of the draft
agreement during the course of the negotiations.
This text has been prepared in collaboration with, and has been approved
by, the Department of Agriculture.
[Enclosure]
Draft International Corn Agreement
The Government of the United States of America and the Government of
the Argentine Republic, in a mutual desire to promote the orderly
marketing in international trade of corn and to bring about a level
of prices for corn which will be fair to producers and consumers by
adjusting the supply of corn to an effective world demand, and by
eliminating abnormal surpluses which are depressing the corn market,
have agreed as follows:
Article I
For the purposes of the present Agreement—
- (1)
- “Corn” means corn or maize, including cracked corn.
- (2)
- “Bushel” means 56 pounds avoirdupois.
- (3)
- “Quota year” means the period from October 1 to September
30, inclusive.
- (4)
- “Exports” means shipments to foreign countries from the
territories to which the present Agreement applies, as
provided for in Article VII hereof. Such shipments shall be
measured by the official statistics of each country.
- (5)
- “World import demand for corn produced in the United
States and Argentina” means the effective demand for corn,
at not less than the price provided for under the terms of
this Agreement, of all areas of the world except that of the
country in which the corn is produced.
Article II
Upon the coming into force of this Agreement, there shall be
established an Advisory Commission which shall consist of a
representative or representatives appointed by each of the two
Governments.
The Commission shall perform the functions specified in Articles III,
IV, and VI of this Agreement and shall also give consideration to
any problems arising in connection with the operation of the
Agreement and shall make recommendations with respect thereto to the
Governments of the two countries.
The Commission shall establish and maintain a Secretariat to assist
it in the performance of its functions.
Article III
The Advisory Commission provided for in Article II of this agreement
shall estimate for each quota year the world import demand for corn
produced in the United States and Argentina; such estimates shall be
made during the month of September in each year for the succeeding
quota year. The Commission shall from time to time
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during each quota year review the
world import demand for corn produced in the United States and
Argentina, and if considered necessary in the light of changing
world market conditions, modify its original estimate of such world
import demand for that quota year.
The quantity of corn thus originally or subsequently estimated by the
Commission shall constitute the maximum permitted exports of corn
from the two countries during each quota year. Such maximum
permitted exports of corn shall be allotted between the two
countries in the ratio of 80 percent for Argentina and 20 percent
for the United States. However, in any quota year, the exports of
corn from each country may exceed its quota by not more than 5
percent, but if such quota is exceeded by either country in any
quota year, such excess shall be deducted from its quota for the
succeeding quota year. Moreover, if in any quota year either country
is unable to export its quota of corn as provided for in this
Article, it may, upon the recommendation of the Advisory Commission,
transfer the deficiency to the other country in return for such
adjustment in its share of the total export quota of the two
countries for the succeeding quota year as may be agreed upon by the
two Governments.
Article IV
No export transaction involving corn will be permitted by the
Government of either country below a cash price of 80 cents (United
States currency) per bushel for United States No. 3 Yellow (15
percent moisture maximum) or Yellow Plate F. A. Q., basis c. i. f.
Liverpool, or the equivalents thereof, except as may be agreed upon
by the two Governments upon the recommendation of the Advisory
Commission.
All sales for export made in either country shall be reported
immediately to the Secretariat of the Advisory Commission. Such
reports shall include documentary evidence of the quantity and grade
of corn sold, the price per unit, and the other terms of sale.
Article V
The two Governments agree that it is desirable that no action shall
be taken during the period of the Agreement which would encourage
further expansion in acreage or production of corn in their
respective territories.
Taking into consideration that the Government of the United States of
America now has in operation a crop-control program for corn, the
Government of the Argentine Republic agrees to take steps looking
toward the establishment at the earliest possible date, of an
effective production or marketing control program for corn; and it
agrees further that, until such a control program shall have been
established,
[Page 500]
it will not
fix a minimum domestic price for shelled corn, basis c. i. f. Buenos
Aires, in excess of 4.75 pesos per 100 kilograms, or its equivalent.
It is understood that the obligations of the Government of the
Argentine Republic under this paragraph shall continue so long as
the Government of the United States of America maintains in effect a
crop-control program substantially equivalent to that now in
operation.
Article VI
Each Government agrees to take whatever steps it may find practicable
and desirable to increase the utilization of corn.
The Advisory Commission shall devote special attention to the problem
of increasing the utilization of corn, including the possibility of
diverting corn from ordinary channels of trade, and shall report its
findings and make recommendations to the respective Governments.
Each Government agrees to make available to the other Government such
results as it may obtain from research investigations with respect
to corn utilization.
Article VII
The present Agreement shall apply to all the territories and
possessions of each country except the Philippine Islands.
Article VIII
The present Agreement shall come into force on a date to be agreed
upon between the two Governments and, subject to termination on
September 30, 1941 or September 30, 1942 upon at least three months’
notice by the Government of either country, it shall remain in force
until October 1, 1943.
In witness whereof the undersigned, duly authorized thereto, have
signed the present Agreement and have affixed thereto their
seals.
Done in duplicate, in the English and Spanish languages, both
authentic, at the City of . . . . . . . this . . day of . . . . . .
. 1940.
[seal] . . . . . . . . .
[seal] . . . . . . . . .
