1968. The following is an excerpt from the President's message transmitting the 1976 agreement:

On July 17, 1975, the coffee growing regions of Brazil were hit by the most severe frost since 1918, destroying hundreds of millions of coffee trees and thus sharply reducing the productive capacity of the world's largest producer for the next several years. The world faces a period of short supply of coffee. How long this period may last will depend on how well the international coffee community can manage its efforts to restore production and stocks.

The International Coffee Agreement of 1976 was concluded after the Brazilian frost and takes into account our experience in the 1962 and 1968 Agreements. It contains a number of new features designed to deal with the situation we expect to face in the future. The agreement contains strong new incentives for the early restoration of normal supplies to consumer member markets. The most important features of the new Agreement are the following:

The Agreement is intended to stabilize prices within the range of long term market trends and to encourage the restoration of adequate production levels. There are no fixed price objectives. Consumers are provided with assurances there will be no restriction on the flow of coffee to the market while prices are high. Thus, the Agreement commences with its export quotas in suspense. Producers have assurances of renewed consumer cooperation should a temporary production surplus reappear. The Agreement should act as a stimulus to producing countries to restore production to levels adequate to meet consumption needs at reasonable prices.

Those coffee producers who perform best during the next two years will be rewarded with a permanent increase in their basic quotas, which is an additional incentive to ship to the market every available bag of coffee.

Quotas will go to those countries which have coffee available to ship through a new and more flexible system of annual quota distribution.

The Agreement is the most generous in its quota allocation to the smallest producers, and allows them the highest growth rates.

Now, as in 1962 and 1968, coffee remains in financial terms the most important non-petroleum commodity exported by developing countries. A large number of developing countries in Latin America, Africa and Asia rely on coffee as a major source of their export earnings. Altogether, 43 producing nations participated in the negotiation of the new Agreement and are expected to join it. As the world's largest consuming country, coffee is also important to the United States. In 1974, we imported coffee valued at $1.5 billion. In that same year, we exported agricultural and manufactured products to the coffee producing countries worth over $15 billion

We and the other consuming countries have constructed a unique cooperative relationship with the coffee producing countries

within the framework of International Coffee Agreements. We have attempted, with a good measure of success, to find constructive solutions to the problems which affect the production and trade of coffee. I strongly urge this mutually beneficial effort as represented in the new Agreement be continued.

The Senate gave its advice and consent to the 1976 Coffee Agreement on August 23, 1976, and the President ratified it on September 21, 1976. The Administration indicated it would seek implementing legislation to participate in the agreement for three years of its six-year duration, to permit consideration of the longer term implications of the agreement.

See also S. Ex. Rept. 94-30, 94th Cong., 2d Sess. For the text of Ch. IX "Consultations, Disputes and Complaints," see post, Ch. 13, § 1, pp. 629-630. Wheat

On June 17, 1976, the United States deposited declarations of provisional application, "within the limitation of the United States internal legislation and budgetary process," of the 1976 Protocols for the Third Extension of the Wheat Trade Convention and the Food Aid Convention, constituting the International Wheat Agreement, 1971. The Protocols, which extend the 1971 Wheat Agreement until June 30, 1978, were signed for the United States on April 5, 1976, and were transmitted to the Senate on June 18, 1976, for advice and consent to ratification (S. Ex. I, 94th Cong., 2d Sess.). The President's message of transmittal was accompanied by a report by the Department of State which described the Protocols as follows:

Further extending the Wheat Trade Convention maintains the framework for international cooperation in collecting, analyzing and disseminating data on the international wheat situation with particular reference to supply, demand, trade and prices. The International Wheat Council will continue to meet semi-annually. An Advisory Subcommittee on Market Conditions meets monthly. This extension of the Food Aid Convention again maintains the commitments of the parties to provide minimum annual quantities of food aid to developing countries. The contributions of the United States under the Food Aid Convention are made up of commodities sold or donated under P.L. 480 or through other bilateral AID programs. The European Economic Community (EEC) had not completed all internal clearances among its member states at the time the text of the Protocol was signed and did not sign. There is, however, provision for the EEC to accede to the Protocol. If it does, its minimum annual contribution will be at the same level as currently-1,287,000 tons. The United States and Switzerland intend not to deposit ratifications of the extending protocol for this Convention unless the EEC becomes a party to the Protocol.

Therefore at the time of signature, the following written statement was submitted by Secretary of Agriculture Earl L. Butz:

I wish to state on behalf of the Government of the United States of America that the instrument of ratification of the Protocol for the Third Extension of the Food Aid Convention, 1971, by the United States will not be deposited if the other major donors do not become parties to that Protocol.

The phrase "major donors" in this statement was intended by Secretary Butz to refer primarily to the EEC.

The International Wheat Council, meeting in London June 29-July 1, 1976, granted the Government of the United States an extension of time until December 31, 1976, for the deposit of its instruments of ratification of the 1976 Protocols. On June 29, 1976, a conference of governments in London determined that the conditions had been met by June 18, 1976, for entry into force of the various articles of the two protocols in accordance with their terms.

See also S. Ex. Rept. 94-31, 94th Cong., 2d Sess., and statement by Joseph A. Greenwald, Assistant Secretary of State for Economic and Business Affairs, submitted to the Senate Committee on Foreign Relations on July 27, 1976, Dept. of State Bulletin, Vol. LXXV, No. 1939, Aug. 23, 1976, pp. 279-281.

The Trade Act of 1974

Secretary of State Kissinger, in a statement before the Sixth General Assembly of the Organization of American States (OAS) on June 9, 1976, discussed the Trade Act of 1974 (88 Stat. 1978; 19 U.S.C. 2101-2487) in relation to Latin America's trade opportunities as follows:

The preferences system contained in the U.S. Trade Act has been in effect since January. It gives Latin American countries duty-free entry on more than I billion dollars' worth of their exports to the United States. Even more important, it provides vast opportunities for Latin America to diversify into new product areas in its exports to the United States.

In addition to the effort we will undertake to end the exclusion of Ecuador and Venezuela from the benefits of the U.S. Trade Act, President Ford has asked me to state today that:

-He will make every effort to add to the preferences system products that are of direct interest to Latin America.

-The executive branch will bend every effort to accommodate the export interests of Latin America in all matters in which we have statutory discretion. President Ford's recent choice of adjustment assistance rather than import restrictions in response to the petition of the U.S. footwear industry clearly demonstrates the commitment of the U.S. Government to a liberal trade policy and the use of the Trade Act to expand trade in the hemisphere.

-The President will direct the U.S. Department of Commerce to respond positively to requests from your governments for assistance in the development of export promotion programs. The Department of Commerce will make available technical advice on promotion techniques and personnel training to help develop new markets for Latin American exports worldwide.

Dept. of State Bulletin, Vol. LXXV, No. 1932, July 5, 1976, pp. 7-8. On June 17, 1976, the OAS General Assembly adopted Res. 231 (VI-0/76), in which the General Assembly resolved:

1. To reiterate its deep concern that the clause excluding Ecuador and Venezuela from the Generalized System of Preferences remains in the Trade Act of 1974 of the United States of America.

2. To express its disappointment that, despite the many earnest appeals made and the pledges received, discrimination against Ecuador and Venezuela persists, and this continues to disturb inter-American relations.

3. To put on record its emphatic request that the legal provision giving rise to this discrimination be amended as promptly as possible, to avoid greater damage to the affected countries.

4. To reaffirm the importance, in observance of the commitments undertaken within the inter-American system and in a spirit of mutual cooperation and regional solidarity, of applying the Trade Act of the United States of America in a manner consistent with the interests and development needs of the Latin American countries.

5. In this respect, to note with interest the statement made by the Secretary of State of the United States of America on the policy that his government will follow in applying the Trade Act and on its willingness to make improvements in it.

6. To renew the mandate conferred upon the Permanent Council through resolution AG/RES. 199 (V-0/75).

OAS Doc. OEA/Ser.P/VI-0.2, July 7, 1976, Vol. 1, pp. 38-39.

The 94th Congress failed to act on legislation (the Bentsen amendment) that was designed to remove the nonembargoing members of the Organization of Petroleum Exporting Countries (OPEC) Ecuador and Venezuela-from the restrictions of the Trade Act of 1974.

3 International Economic Assistance
and Development

International Lending Institutions
Inter-American Development Bank

Increased participation by the United States in the InterAmerican Development Bank, and provision for the United States to vote for entry into the Bank by nonregional members and the Bahamas and Guyana, was authorized by Public Law 94-302 (90 Stat. 591) approved May 31, 1976. Title I of the Act amended the Inter-American Development Bank Act (22 U.S.C. 283 et seq.) by adding the following new sections:

SEC. 26. (a) The United States Governor of the Bank is hereby authorized to vote in favor to two resolutions proposed by the

Governors at a special meeting in July 1975, and now pending before the Board of Governors of the Bank, which provide for (1) an increase in the authorized capital stock of the Bank and additional subscriptions of members thereto and (2) an increase in the resources of the Fund for Special Operations and contributions thereto. Upon adoption of such resolutions, the United States Governor is authorized to agree on behalf of the United States (1) to subscribe to ninety-nine thousand four hundred and seventy-four shares of $10,000 par value of the increase in the authorized capital stock of the Bank of which eighty-nine thousand five hundred and twenty-six shall be callable shares and nine thousand nine hundred and forty-eight shall be paid in and (2) to contribute to the Fund for Special Operations $600,000,000, in accordance with and subject to the terms and conditions of such resolutions.

(b) There are hereby authorized to be appropriated, without fiscal year limitation, the amounts necessary for payment by the Secretary of the Treasury of (1) $1,199,997,873 for the United States subscription to the capital stock of the Bank and (2) $600,000,000 for the United States share of the increase in the resources of the Fund for Special Operations.

SEC. 27. (a) The United States Governor of the Bank is hereby authorized to vote for an additional increase of one hundred and eight thousand shares of $10,000 par value in the authorized callable capital stock of the Bank as recommended in the resolution of the Board of Governors entitled "Increase of U.S. $4 Billion in the Authorized Capital Stock and Subscriptions Thereto". Upon adoption of a Board of Governors resolution increasing the authorized capital stock of the Bank by such amount, the United States Governor is authorized to agree on behalf of the United States to subscribe to thirty-seven thousand three hundred and three shares of $10,000 par value of such additional increase in callable capital in accordance with and subject to the terms and conditions of such resolution.

(b) In order to pay for the increase in the United States subscription to the Bank provided for in this section, there is hereby authorized to be appropriated, without fiscal year limitation, $450,002,218 for payment by the Secretary of the Treasury.

In addition, Title I authorized the U.S. Governor of the Bank to vote for three proposed resolutions of the Board of Governors with respect to (1) creation of a new class of stock designated as Inter-Regional Capital stock; (2) admission of nonregional countries-ten European plus Japan and Israel-to membership in the Bank, and (3) an increase in the authorized callable ordinary capital stock and subscriptions thereto in connection with the admission of nonregional members. The U.S. Governor was also authorized to vote for amendments to the Inter-American Development Bank Agreement (TIAS 4397; 10 UST 3029; entered into force for the United States December 30, 1959) as amended, providing for membership of the Bahamas and Guyana and for lending to the Caribbean Development Bank.