Coffee in Retrospect: President Kennedy on the International Coffee Agreement (1962)

A drop of one cent a pound for green coffee costs Latin American producers $50 million in export proceeds.

STATEMENT BY THE PRESIDENT ON THE SIGNING OF THE INTERNATIONAL COFFEE AGREEMENT

Public Papers of the Presidents: John F. Kennedy, 1962; and Foreign Relations of the United States, 1961 to 1963, Volume IX, Document 360

September 28, 1962

It gives me great satisfaction that the International Coffee Agreement was signed today at the United Nations in New York. It was signed on behalf of our country by Ambassador Adlai E. Stevenson and our principal negotiator, W. Michael Blumenthal, Deputy Assistant Secretary of State for Economic Affairs. I am submitting the Agreement to the Senate next week and shall urge that it be considered early in the next Congress. Since we account for 50 percent of world coffee imports, the Agreement cannot take effect until ratified by the United States.

The Agreement is a heartening example of international cooperation to resolve a vitally important economic problem. Coffee is the third most traded commodity in the world and is the main source of foreign income in many underdeveloped countries, particularly in Latin America. A drop of one cent a pound for green coffee costs Latin American producers $50 million in export proceeds--enough to seriously undercut what we are seeking to accomplish by the Alliance for Progress.

The Agreement fixes export and import quotas for coffee. To assure that prices to consumers are fair and reasonable, importing nations have an equal voice with exporters in fixing quotas. Fifty-eight countries took part in the negotiations, and some 70 nations may eventually join in this Agreement covering the bulk of world trade in coffee.

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The State Department's later account of the same negotiation, from the Foreign Relations of the United States series:

360. Editorial Note

The U.N. Coffee Conference, consisting of representatives of 56 countries (including the United States), met in New York July-September 1962, and formulated the Coffee Agreement, 1962 (14 UST 1911). The objective of the agreement was to assure that coffee prices in general did not decline below the 1962 level. The agreement relied on an export quota system negotiated among coffee-exporting countries to achieve price stability with quarterly adjustments according to changes in consumption estimates. W. Michael Blumenthal signed for the United States. The agreement entered into force on December 27, 1963.

The Department of State instructed Embassies in coffee-exporting countries to emphasize that the U.S. delegation "did not intercede in quota negotiations for any country." Since U.S. Department of Agriculture figures were used as a basis for negotiation, the Department of State wanted to forestall the possibility that some countries might blame the United States for their failure to secure an adequate quota on grounds of an incorrect estimate. The agreement principally obliged coffee-importing countries like the United States to restrict imports from nonparticipants to the average quantity imported during the 3-year base period to prevent nonparticipants from sharing increases in consumption. Voting in the Council, situated in London, was based on quantity of exports and imports, giving the United States and Brazil a virtual veto on major Council decisions. (Circular telegram 342 to 29 Embassies and USUN, August 27; Department of State, Central Files, 398.2333/8-2762)

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Editor's note. Two United States government texts, reprinted whole. Kennedy's statement names Latin America and the Alliance for Progress; Africa does not appear. The State Department's editorial note, written for the official record, supplies what the statement leaves out: the quotas were negotiated from United States Department of Agriculture production estimates, Washington expected some producing countries to blame it for their quotas, and voting weight gave the United States and Brazil a veto. Ethiopia's objection to its own quota, lodged within a year, is the subject of the essay that accompanies this reprint. The statement says 58 countries took part in the negotiation; the editorial note says 56. Both are given as printed. Public domain.