Message to the Congress Transmitting Annual Report on Operation of the International Coffee Agreement.

To the Congress of the United States:

I transmit herewith my report on the operations in 1970 of the International Coffee Agreement of 1968.

Events during 1970 once again demonstrated the capacity of the Agreement to protect the interests of both its consumer and producer members. The International Coffee Council acted decisively in August to curb a precipitous increase in world coffee prices caused by damage to the Brazilian coffee crop in mid-1969. At the same time the judicious measures adopted by the Council enabled producing countries to maintain their foreign exchange earnings from coffee exports at a level consistent with the objectives of the Agreement.

I am also pleased to inform the Congress that we have reached an agreement with Brazil relating to our trade with that country in soluble coffee, which settles the U.S. complaint against Brazil under Article 44 of the International Coffee Agreement. This agreement improves the competitive conditions of access to Brazilian green coffee by U.S. soluble coffee processors in a manner which safeguards the interests of consumers.

In terms of the bilateral accord, which will be valid as long as the United States continues to implement the International Coffee Agreement, Brazil will make available for sale to American soluble coffee manufacturers an appropriate quantity of green coffee free of Brazilian contribution quota. American firms will qualify to purchase this coffee, which will be of suitable quality, in proportion to their historical production of soluble coffee. The enclosed letter from the Secretary of State provides a more detailed account of the settlement and the negotiations which led up to it.

In the light of the Agreement's benefit to American consumers in 1970, its undoubted value to the developing coffee producing countries, and the resolution of our problem with Brazil, I urge timely Congressional action to extend the necessary implementing legislation until September 30, 1973, when the 1968 International Coffee Agreement terminates. Prompt passage will reaffirm to the Agreement's 41 exporting members the strength of our commitment to their economic development. Expeditious approval will, moreover, remove any uncertainty on the part of our own industry as well as foreign countries concerning the future of international coffee cooperation.

RICHARD NIXON

The White House

April 1, 1971