The Secretary of State to the Ambassador in Argentina ( Armour )

No. 540

Sir: Reference is made to your telegram no. 482 of October 11, 194041 and to the Department’s telegrams nos. 184 and 216 of August 16 and September 19, 1940, respectively, regarding the proposed corn agreement between the United States and Argentina.

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.

Very truly yours,

For the Secretary of State:
Sumner Welles
[Page 498]

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—

“Corn” means corn or maize, including cracked corn.
“Bushel” means 56 pounds avoirdupois.
“Quota year” means the period from October 1 to September 30, inclusive.
“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.
“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 [Page 499] 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.

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  1. Not printed.