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Grain Embargo Eastern Europe – USSR [1982-1984] (3)
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Records of the National Security Council, Directorate of European and Soviet Affairs (Reagan Administration)
Jack F. Matlock, Jr.'s Union of Soviet Socialist Republics (U.S.S.R.) Subject Files
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Ronald Reagan Presidential Library
Digital Library Collections
This is a PDF of a folder from our textual collections.
Collection: Matlock, Jack F.: Files
Folder Title: Grain Embargo Eastern Europe -
USSR [1982-1984] (3)
Box: 27
To see more digitized collections visit:
https://reaganlibrary.gov/archives/digital-library
To see all Ronald Reagan Presidential Library inventories visit:
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Contact a reference archivist at: [email protected]
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WITHDRAWAL SHEET
Ronald Reagan Library
Collection Name MATLOCK, JACK: FILES
Withdrawer
JET 5/11/2005
File Folder
SOVIET UNION-GRAIN EMBARGO EE 3/4 [1982-1984]
FOIA
F06-114/8
Box Number
27
YARHI-MILO
2708
ID Doc Type
Document Description
No of Doc Date Restrictions
Pages
10067 MEMO
MCMINN TO POINDEXTER RE
2 5/17/1983 B1
NEGOTIATION OF A NEW LONG TERM
GRAIN AGREEMENT (LTA) WITH THE
SOVIETS
R
9/30/2008
F06-114/8
10073 PAPER
WHITE PAPER ON THE RENEWAL OF THE
7
ND
B1
U.S. GENERALIZED SYSTEM OF
PREFERENCES
R
9/30/2008
F06-114/8
10074 MEMO
LIGHTHIZER RE NEGOTIATION OF A NEW
11
ND
B1
LONG-TERM GRAIN AGREEMENT (LTA)
WITH THE USSR
R
9/30/2008
F06-114/8
10068 MEMO
MCMINN TO CLARK RE U.S.-SOVIET
2 6/9/1983 B1
NEGOTIATIONS ON A NEW LONG TERM
GRAIN AGREEMENT
R
9/30/2008
F06-114/8
10069 MEMO
SAME TEXT AS DOC #10067
2 5/17/1983 B1
R
9/30/2008
F06-114/8
10075 MEMO
SAME TEXT AS DOC #10074
11
ND
B1
R
9/30/2008
F06-114/8
10070 MEMO
MATLOCK TO MCFARLANE RE SOVIET
1 7/18/1984 B1
GRAIN PURCHASES
R
9/30/2008
F06-114/8
Freedom of Information Act - [5 U.S.C. 552(b)]
B-1 National security classified information [(b)(1) of the FOIA]
B-2 Release would disclose internal personnel rules and practices of an agency [(b)(2) of the FOIA]
B-3 Release would violate a Federal statute [(b)(3) of the FOIA]
B-4 Release would disclose trade secrets or confidential or financial information [(b)(4) of the FOIA]
B-6 Release would constitute a clearly unwarranted invasion of personal privacy [(b)(6) of the FOIA]
B-7 Release would disclose information compiled for law enforcement purposes [(b)(7) of the FOIA]
B-8 Release would disclose information concerning the regulation of financial institutions [(b)(8) of the FOIA]
B-9 Release would disclose geological or geophysical information concerning wells [(b)(9) of the FOIA]
C. Closed in accordance with restrictions contained in donor's deed of gift.
WITHDRAWAL SHEET
Ronald Reagan Library
Collection Name MATLOCK, JACK: FILES
Withdrawer
JET 5/11/2005
File Folder
SOVIET UNION-GRAIN EMBARGO EE 3/4 [1982-1984]
FOIA
F06-114/8
Box Number
27
YARHI-MILO
2708
ID Doc Type
Document Description
No of Doc Date Restrictions
Pages
10071 MEMO
MATLOCK TO MCFARLANE RE SOVIET
1 7/18/1984 B1
GRAIN PURCHASES
R
9/30/2008
F06-114/8
10072 MEMO
MCFARLANE TO MATLOCK RE SOVIET
1
ND
B1
B3
PURCHASE OF U.S. GRAINS
PAR
3/16/2011
F2006-114/8
10076 CABLE
281619Z JUL 83
2 7/28/1983 B1
R
9/30/2008
F06-114/8
Freedom of Information Act - [5 U.S.C. 552(b)]
B-1 National security classified information [(b)(1) of the FOIA]
B-2 Release would disclose internal personnel rules and practices of an agency [(b)(2) of the FOIA]
B-3 Release would violate a Federal statute [(b)(3) of the FOIA]
B-4 Release would disclose trade secrets or confidential or financial information [(b)(4) of the FOIA]
B-6 Release would constitute a clearly unwarranted invasion of personal privacy [(b)(6) of the FOIA]
B-7 Release would disclose information compiled for law enforcement purposes [(b)(7) of the FOIA]
B-8 Release would disclose information concerning the regulation of financial institutions [(b)(8) of the FOIA]
B-9 Release would disclose geological or geophysical information concerning wells [(b)(9) of the FOIA]
C. Closed in accordance with restrictions contained in donor's deed of gift.
CONFIDENTIAL
3370 Lencgowski
MEMORANDUM
CONF IDENTIAL
NATIONAL SECURITY COUNCIL
INFORMATION
May 17, 1983
us-Sovictrels File
MEMORANDUM FOR JOHN M. POINDEXTER
Grain
FROM:
DOUGLAS McMINN TALL
SUBJECT:
Negotiation of a New Long-Term Grain
Agreement (LTA) with the Soviets
The Soviets have now agreed to negotiate a new LTA. Dobrynin has said
that they would be prepared for preliminary discussions on June 1-2,
in London. An interagency working group has been meeting for the past
three weeks to outline the key issues we will face in negotiating a
new agreement with the USSR. The working group, in which I have
participated, has developed the attached paper for review (Tab I). The
paper will be vetted around town and outstanding issues will be raised
to policy levels this week for discussion.
Essentially, there is agreement to use the existing agreement as the
basis for negotiation, but two major negotiating issues require
decision.
Basic Purchase Levels:
Should we seek to retain the purchasing mechanism of the existing LTA
(minimum and maximum purchase levels) or explore a new approach which
would tie the basic purchase levels specified in the agreement to
trade performance (a sliding scale approach) ?
Our basic objective in the negotiations is to maximize U.S.
sales while avoiding possible market disruption caused by
large Soviet purchases.
-- The introduction of a sliding scale approach runs
counter to this objective.
A sliding scale would encourage the Soviets to buy from
suppliers other than the U.S. in years in which they
have a very heavy demand for imports (so as to avoid
too great an increase in their minimum purchase require-
ment from the United States in subsequent years.)
It's been my experience in negotiating with the Soviets and
Eastern Europeans that you have to keep the concepts simple.
Introduction of the sliding scale approach would
complicate the negotiations enormously and would prove
counterproductive to our goals.
DECLASSIFIED
CONFIDENTIAL
NLRR F06-114/8#10067
Declassify on: OADR
CONFIDENTIAL
BY LOJ NARA DATE 9/30/08
CONFIDENTIAL
2
CONFIDENTIAL
2
State, USTR and USDA all agree that we should retain the
purchasing mechanism in the existing agreement, but with
increased purchase levels. I concur with this majority
view.
Supply Assurances:
Should we seek an extension of the guarantees contained in the
existing LTA (Article II) or should we be prepared to provide for
additional guarantees?
The President has indicated that the U.S. favors mutually
beneficial trade with the Soviets, on the basis of regular
commercial considerations, i.e., no "special deals."
--
Providing major additional guarantees to the Soviets on
supply assurance (over and above those in the existing
agreement) runs counter to the President's position.
Additional guarantees on supply assurance undercut our
desire to increase the minimum purchase level.
:
Language in the existing agreement provides a guarantee
to the Soviets on all the grain covered by the minimum
purchase level.
We want to keep this language as an inducement to the
Soviets to increase the minimum purchase level.
--
The higher the minimum purchase level agreed to by the
Soviets, the more grain that will be covered by the
supply assurance guarantee.
State favors "hanging tough" on the existing supply assurance language.
USDA favors having additional guarantees available as bargaining
chips, but only as a fall-back. USTR is riding the fence on this
question. I believe State's position is the proper one on the supply
assurance issue and I have been supporting them.
I will continue to coordinate with Norm Bailey, John Lenczowski and
Roger Robinson on this issue.
Attachment
Tab I - Working Group Paper
Tab A - Long-Term Grain Agreement Paper
CC: Norman Bailey
Henry Nau
John Lenczowski
Roger Robinson
CONF IDENTIAL
CONFIDENTIAL
TAB I
DECLASSIFIED
CONFIDENTIAL
NLRR F06-114/8#10073
BY LOJ NARA DATE 9/30/08
WHITE PAPER ON THE RENEWAL
OF THE U.S. GENERALIZED SYSTEM OF PREFERENCES
Statutory authority for the U.S. Generalized System of
Preferences (GSP) will expire on January 3, 1985. Now in its
eighth year of operation, the GSP has become an integral part
of U.S. trade and foreign policy. It has made a contribution
to the long-term economic development of many developing
countries and has stimulated two-way trade between the United
States and these countries. The GSP has become a significant
component of U.S. bilateral relations with many beneficiary
countries. It is in the interest of the United States to
extend the GSP program beyond 1985 in such a way as to
strengthen these developments further.
The GSP is a program of tariff preferences granted by the
United States to developing countries to assist their
economic development by encouraging greater diversification
and expansion of their production and exports. At present,
the GSP grants duty-free treatment to approximately 3,000
products imported from 140 developing countries and
territories. The value of U.S. imports receiving GSP
duty-free treatment grew from $3.0 billion in 1976, the
program's first year of operation, to $8.4 billion in 1982.
GSP imports represent 3 percent of total U.S. imports.
In 1968, the United States joined other industrialized
countries in supporting the concept of tariff preferences as
a means of facilitating development through trade rather than
aid. In the early 1970s, nineteen developed countries
instituted GSP schemes. The United States implemented its
scheme in 1976 following the passage of the Trade Act of
1974, the GSP's authorizing legislation.
Modifications in GSP product coverage and country eligibility
have been made on an annual basis. Most of these
modifications are required by statute. The Trade Act of 1974
specifies "competitive need" limits, which provide for the
automatic exclusion of a beneficiary country from GSP
eligibility on a product whenever imports from that country
exceed 50 percent of total U.S. imports or a certain dollar
value during the preceding calendar year. Over 40 percent of
the value of otherwise eligible products from beneficiary
countries have been denied duty-free treatment because of
these limits.
Other modifications are made at the discretion of the
President. The interagency Trade Policy Staff Committee has
conducted an annual GSP product review, in which interested
parties such as domestic producers, workers, importers, and
foreign governments submit petitions requesting modifications
in GSP eligibility. Approximately 300 products, valued at
$1.3 billion, have been added to the GSP as a result of these
CONFIDENTIAL
- 2 -
CONFIDENTIAL
procedures, while 25 products, valued at $0.6 billion, have
been removed. Such modifications have been small in
comparison with the value of trade excluded from the GSP by
the automatic competitive need limits, however, which in 1982
alone amounted to $7.1 billion.
Since the program's implementation, a limited number of the
more advanced beneficiary countries have accounted for the
majority of GSP imports. Concerned that the program's
benefits were not accruing to those countries most in need
and in keeping with the United States' desire to have
developing countries assume greater responsibility in the
international trade community, the Administration outlined a
policy of discretionary graduation in the President's 1980
Report to the Congress on the First Five Year's Operation of
the U.S. GSP. Under this policy, seven advanced
beneficiaries have been removed, or "graduated," from GSP
eligibility on over $1 billion in trade in various products
in which they were found to be highly competitive. In
determining whether a country should be graduated from
duty-free treatment on a product, three factors have been
considered: the country's general level of development; its
competitiveness in the specific product; and the overall
economic interests of the United States, including the extent
to which GSP imports from the beneficiary country may have
adversely affected U.S. producers and workers.
As noted earlier, nineteen other industrialized countries
also maintain GSP programs. The programs of the European
Community (EC), Japan and the United States account for
approximately 85 percent of global GSP trade. In 1980, the
most recent year for which comparative data are available,
GSP imports under the EC's scheme totaled $9.3 billion, or
2.5 percent of total EC imports; GSP imports under the
Japanese scheme totaled $4.9 billion, or 3.4 percent of total
Japanese imports; and U.S. GSP imports totaled $7.3 billion,
or 3.1 percent of total U.S. imports. It should be noted
that the EC also maintains a number of trade preference
programs outside the structure of its GSP, the largest of
which is the Lome Convention. Under this arrangement an
additional $7.5 billion in EC imports from developing
countries in Africa, the Caribbean and the Pacific received
preferential tariff treatment in 1980.
With the exception of the United States and Canada, GSP donor
countries have renewed their programs through 1990 or beyond.
Canada is expected to renew its program by July 1984.
In addressing the importance of continuing the U.S. GSP
program beyond its scheduled expiration in January 1985,
several considerations must be kept in mind:
CONFIDENTIAL
- 3 -
CONFIDENTIAL
--
The desire to promote the development of Third World
countries, which often need temporary preferential
advantages to compete effectively with industrialized
countries;
The recognition that trade, rather than aid, is a more
effective and cost-efficient way of promoting
broad-based sustained economic development.
The recognition that developing countries provide the
fastest growing markets for U.S. exports and that
foreign exchange earned by these countries through the
GSP can further stimulate U.S. exports;
--
The recognition that there are significant differences
among developing countries with respect to their general
development and international competitiveness;
The desire to provide future opportunities for increased
trade liberalization, thereby setting an example to be
emulated by other industrialized countries;
--
The recognition that a large number of developing
countries must generate sufficient foreign exchange
earnings to meet international debt obligations;
--
The desire to create additional opportunities for trade
among the developing countries;
--
The desire to integrate developing countries into the
international trading system with its attendant
responsibilities in a manner commensurate with their
development; and
--
The recognition that many developing countries maintain
significant barriers to trade in goods and services and
to investment which, if liberalized, would spur U.S.
exports.
The desire to address these concerns in a manner that
does not adversely affect U.S. producers and workers.
Taking into account these considerations and taking note of
the recent actions by other industrialized countries to
extend their GSP programs, the Administration proposes a
ten-year extension of the U.S. GSP. The Administration
further proposes that the program be modified so as to better
serve the interests outlined above.
Description of Proposal
The GSP renewal proposal outlined in the following paragraphs
is intended to further the goals of: (1) limiting GSP
CONFIDENTIAL
7
- 4 -
CONFIDENTIAL
treatment for highly competitive products; (2) assuring U.S.
exports greater market access in beneficiary countries; (3)
reallocating benefits to the less developed beneficiary
countries to the degree possible; and (4) conforming to U.S.
international obligations under the GATT.
The proposal requires changes in both the statute and in
Administrative procedures. The statutory changes are minor
and involve only a ten-year extension of the program and an
amendment to the Presidential authority to waive the
competitive need limit pursuant to Section 504 (c).
Administrative procedures will spell out the implementation
mechanisms along the lines discussed below.
The proposal's major departure from the current GSP centers
on the increased weight the President will give in making GSP
decisions to the level of economic development of a
beneficiary and to whether that country provides adequate
market access to U.S. exports, two factors required to be
considered currently under Section 504(a) in deciding whether
GSP treatment should be limited. The proposal provides that
the President, pursuant to Section 504(a), will review the
eligibility of products from advanced developing countries
with a view toward lowering the competitive need limits based
on an analysis of the factors listed below. Products whose
level of trade remains below the lower limits will continue
to receive GSP treatment as currently provided. Finally, the
proposal gives the President authority to liberalize
competitive need as a means to induce beneficiary countries
to provide significant market access and to ensure that the
least developed beneficiary countries receive the greatest
amount of benefits possible under the system.
The proposal would require a phase-in period following the
date of enactment during which time the President would
conduct a general review of GSP eligible products from
advanced beneficiaries for the purposes of determining for
each beneficiary which products should be subject to the
lower competitive need limits. In determining which products
will be subject to lower competitive need limits, the
President will consider the various factors currently
required under the existing statute and administrative
procedures, including:
1)
the development level of individual beneficiaries;
2)
the beneficiary country's competitiveness in a
particular product;
3)
the overall interests of the United States;
4)
the effect such action will have on furthering the
economic development of developing countries;
CONFIDENTIAL
8
- 5 -
CONFIDENTIAL
5)
whether or not the other major developed countries are
extending generalized preferential tariff treatment to
such product or products;
6)
the anticipated impact of such action on United States
producers of like or competitive products; and
7)
the extent to which the beneficiary country has assured
the United States it will provide equitable and
reasonable access to the markets and basic commodity
resources of such country.
To provide a degree of certainty as to how the program will
operate, a three-tier competitive need system will be
established administratively. Each tier will correspond to a
particular level of beneficiary country development, i.e.,
advanced, mid-level and least developed. The advanced
beneficiary countries will be assigned a competitive need
limit of 25 percent of the value of total U.S. imports in a
particular product or $25 million of imports of a product,
mid-level beneficiaries will be assigned a competitive need
limit of 50 percent of total U.S. imports in a particular
product or $53.3 million of imports in a product, and the
least developed beneficiaries would have competitive need
waived. In announcing the review, the President would
indicate which beneficiary countries fall within each of the
three categories.
The President will initiate informal bilateral discussions
with those advanced beneficiary countries with products
likely to be subject to lower competitive need limits. In
these discussions, the United States will seek the
elimination or reduction on a non-discriminatory basis of
developing country barriers to trade in goods and services
and trade-related investment practices. In addition to
tariffs and traditional non-tariff barriers such as quotas
and licensing, the discussions will include other
trade-distorting practices, in particular, performance
requirements and inadequate protection of intellectual
property rights. The President will consider the results of
the discussions, as well as the other factors listed above,
in determining the extent to which the lower competitive
need limits will apply. The presence or absence of equitable
and reasonable market access and the elimination or reduction
of trade-distorting practices will be given great weight in
this determination.
Although the probable economic effect on U.S. producers and
workers will be analyzed before any competitive need limits
are liberalized, present safeguard procedures will be
maintained. These procedures provide for remedial action in
the context of the GSP to ensure that domestic industries and
workers are not adversely affected by imports receiving
preferential tariff treatment.
CONFIDENTIAL
- 6 -
9
CONFIDE
The importance of trade to the economic well-being of both
the United States and developing countries has grown
considerably over the past decade. Currently, developing
countries purchase nearly 40 percent of U.S. exports, which
is considerably greater than U.S. exports to the EC and Japan
combined, and exports to the developing countries are growing
considerably faster than exports to these traditional
developed country markets.
For developing countries, trade provides an essential
stimulus to efficient production and rapid economic growth.
Exporting to world markets enables developing countries to
achieve scales of production that could not be reached on the
basis of their domestic demand alone. This permits
developing countries to employ their human, natural and
capital resources in their most productive uses, thereby
maximizing output and income from the available resources.
Exports also generate the foreign exchange necessary to pay
for fuel, intermediate inputs and capital goods imports that
are required for their development efforts.
Export growth is essential for developing countries to meet
their debt service requirements. The durability of financial
support programs for high-debt developing countries arranged
by the International Monetary Fund, central banks in
developed countries, and commercial banks depends upon these
countries' export expansion. A strong export performance
also helps to attract additional foreign private investment,
which increases a developing country's ability to expand its
production capacity as well as its social and physical
infrastructure.
On the other hand, competition from imports heightens the
incentives for local producers in developing countries to
improve their productivity and encourages them to adopt
product and production innovations that raise the country's
overall level of technology. All of these benefits from
trade increase a developing country's ability to employ its
people and to provide a higher standard of living for them.
It is in our mutual interest to increase further the
bilateral trade flows between the United States and
developing countries. The Administration believes the GSP
has made an important contribution in this regard since 1976.
The GSP has become an integral part of our overall effort to
encourage economic development through trade, not aid. The
GSP beneficiary countries, many of whom have longstanding and
close ties to the United States, look on the program as an
important indication of the seriousness with which the United
States views its stated policy of encouraging self-sufficient
economic development. They attach great importance to this
concrete incentive the United States provides for increased
domestic production and export of their manufactured,
semi-manufactured, and agricultural products. The increased
CONFIDENTIAL
- 7 -
CONFIDENTIAL
export earnings generated by the GSP program permit
beneficiary countries to pay for priority imports supporting
further economic development. They also help create
conditions for the beneficiary countries to expand their
purchases of American capital goods and agricultural
products.
The nineteen other OECD developed donor countries are
committed to a balanced continuation of GSP. Most have
already extended their GSP programs for a second decade. The
Administration believes the renewal proposal outlined above
will reinforce the development goals of the GSP and further
support the economic and foreign policy interests of the
United States.
5/6/83
CONFIDENTIAL
TAB A
12
CONFIDENTIAL
5/17
TO:
FROM:
Ambassador Robert E. Lighthizer
SUBJECT: Negotiation of a new Long-Term Grain Agreement
(LTA) with the USSR
The Soviets have now accepted our proposal to negotiate
a new LTA. Ambassador Dobrynin indicated that the Soviets
would be receptive to having preliminary discussions on
June 1-2. Therefore, we should move ahead expeditiously with
our preparations for these talks. The attached paper, which
was developed by an interagency working group, outlines the
major issues we will face in negotiating a new agreement.
For a few key issues, options are presented as a basis for
higher level decision. On most other elements of an
agreement, there appears to be broad agreement at the working
level and positions are recommended.
I would urge that you review this paper carefully and
that we meet for a preliminary discussion of LTA negotiations
on
For your convenience, a copy of the existing LTA is also
attached.
CONFIDENTIAL
DECLASSIFIED
NLRR F06-114/8#10074
BY LOJ NARA DATE 9/30/08
13
2
CONFIDENTIA
U.S.-USSR LONG-TERM AGREEMENT ON GRAINS
1.
Basic Objectives
Maximize sales opportunities for the grains trade and,
to the extent feasible, for other U.S. agricultural products.
Protect against possible market disruption caused by Soviet
purchases. Improve knowledge of Soviet purchasing
intentions. [Avoid to extent possible arrangements that
constitute a "special deal" for the USSR vis-a-vis other
purchasers. Proposed by State. USDA questions need for, and
possible interpretation of, this statement.]
2.
Specific Objectives: Key Decisions Required
A. Basic Purchase Levels
A decision must be taken as to whether to seek only
to retain the mechanism of the existing LTA (with increased
amounts) or to explore a sliding scale mechanism with the
USSR. Another possibility would be to explore the sliding
scale approach only if we are unable to reach agreement with
the Soviets on increased basic purchase levels within the
framework of the existing mechanism.
The simplest approach would, of course, be to seek to
maintain the mechanism provided by Article 1 of the existing
CONFIDENTIA
3
CONFIDENTIA
agreement but to raise both the minimum purchase level and
the maximum amount without consultations by a significant
amount. Initially, the United States might propose 14-16
MMT. While a lower figure might be acceptable, the United
States should seek a significant increase above the 6-8 MMT
specified in the current agreement. The United States would
also want to keep the fork between the minimum purchase and
the maximum purchase without consultations (2 MMT under the
current agreement) relatively narrow. The prospect of
widening the fork might, however, be used to secure a Soviet
commitment to higher minimum purchase levels. As a rule of
thumb, the United States might insist that the fork should
not be more than one-third of the minimum purchase level.
The sliding scale approach would tie the basic purchase
levels specified in the agreement to trade performance. For
example, the top end of the range might be set as equal to
the average level of U.S. grain exports to the USSR in the 3
preceding years; the minimum would be 2-3 million tons below
that level -- or fixed as a certain percentage of that level.
With this approach, the basic purchase levels of the
agreement would tend to track actual Soviet purchases from
the United States (which it is hoped will expand under the
framework of a new LTA).
CONFIDENTIAL
forward)
is
(papa
Attachment I details the advantages and disadvantages of
the sliding scale approach. The main advantage of the
sliding scale approach is that (assuming a generally upward
trend in Soviet imports) it would tend to guarantee ever
larger U.S. grain sales to the Soviet market. It might also
encourage the Soviets to buy from the United States so as to
increase their "rights" to U.S. grain. Conversely, the
introduction of a sliding scale might encourage the Soviets
to buy from suppliers other than the United States in years
of very heavy imports so as to avoid too great an increase in
their minimum purchase requirement. Also, if Soviet imports
trended down it would result in lower minimum purchase
levels. Exploration of the alternative approach would also
tend to complicate and, possibly, slow the negotiations --
especially as Soviet negotiating instructions are likely to
be rigid.
B. Supply Assurances
The U.S. should be prepared to accept an extension
of the guarantees contained in existing agreements, utilizing
the same wording as in Article II.
The Soviets may, however, press for additional
guarantees and could make such guarantees a precondition for
the achievement of certain U.S. negotiating objectives (e.g.,
CONFIDENTIAL
5
a higher minimum). A decision must be taken as to whether
any such guarantees might be offered. If so, three
possibilities are:
1. Extension of the assurances provided by the
Durenberger amendment (which covers 27.0 days) to 1 year for
sales concluded within the framework of the agreement.
2. Apply assurances to all contracts concluded within
the framework of the LTA.
3. Apply assurances to trade levels (in excess of basic
purchase levels) mutually agreed to at the biannual
consultations held under LTA auspices. This would involve a
formal Soviet commitment to a level of imports in excess of
basic purchase levels -- something they have thus far been
unwilling to do.
C. Short-Supply Provision
Both Article I and Article V of the current LTA
allows the United States to reduce the amount of grain
available to the Soviets under the LTA if the total supply of
grain in the United States falls below 225 million tons, a
level which would now represent a catastrophic shortage. A
decision must be taken as to the nature of the short-supply
CONFIDENTIAL
17
6
CONFIDENTIA
provision we should seek in a new LTA and as to what
provisions might be acceptable as fallbacks. The United
States has the following options in approaching this issue:
1. Raise the trigger to a more realistic level. This
would give protection to the U.S. market and lessen the
chance that the United States might ever have to abrogate the
agreement. It would also give little cause for the assertion
that we are giving the Soviets greater assurances than those
given to other customers. The Soviets might, however, resist
any increase in the trigger point -- as lessening the
guarantees they now enjoy.
2. Develop some alternative formulation. One
possibility would be to provide for consultations in the
event of short supply (with the possibility of adjusting U.S.
obligations under the LTA). Such a provision might parallel
Article II of the U.S.-PRC agreement (see Attachment II)
which states that any measure applied to grain exports to the
PRC will be no less favorable than that applied to other
importers. This option would give least ground for the
assertion that the LTA gives preferred status to the USSR.
However, it might be opposed by the USSR or, alternatively,
the Soviets might seek to structure the provision so as to
permit a reduction of the USSR's obligations.
CONFIDENTIAL
7
CONFIDENTIAL
Another possibility, whichever of these two options are
followed, would be to continue the short supply exemption
with reference only to the forked quantity (now covered in
para 2 of Article I) but, as an added bargaining point for
obtaining a higher minimum, to offer to eliminate the short
supply provision entirely with respect to the basic minimum
quantity (Currently, this aspect is dealt with spearately
under Article V).
D. Timeframe
This seemingly simple decision is complicated by the
fact that a 5-year agreement (the length of the existing LTA)
would expire in the midst of the 1988 election campaign. A
decision must be taken as to which of the following options
to pursue:
1. A 5-year agreement;
2. A 5-year agreement with provision for automatic
extension, possibly for 1 year at a time, unless either party
decides to the contrary. This would probably enable us to
avoid renegotiation during a campaign year, although if the
Soviets chose not to extend we would essentially be in the
first option; or
CONFIDENTIAL
8
3. A 6-year agreement.
E. Specific Objectives - Other Elements of a new LTA
There is broad interagency agreement on the
recommended positions described below.
A. Commodity Mix/Other Commodities
A balance between wheat and corn must be maintained in a
new LTA. As an initial negotiating position, the United
States might push to maintain the requirement that 50 percent
of the minimum purchase requirement consist of wheat. While
we have some flexibility on this point, we need to obtain
some increase above the 3 MMT minimum for wheat in the
current agreement.
The United States may explore the possibility of
incuding other grain and feed type products (soybean meal,
corn gluten feed, wheat flour, rice) in a new LTA. In the
case of wheat flour and corn gluten feed, such inclusion
might mean only a provision allowing these commodities to
count towards Soviet fulfillment of the minimum purchase
requirements (using appropriate coefficients). In the case
of rice and soybean meal, the United States should, if the
Soviets show any interest, seek the establishment of separate
basic purchase levels for these commodities.
CONFIDENTIA
10
9
CONFIDENT
Commodities outside the grain and feed sphere (a
considerable number -- including poultry, beef, and tobacco
-- have been suggested) should not be considered in the text
of a new LTA. However, the United States should explore the
possibility of formulating a non-binding side letter
encouraging the expansion of U.S.-USSR agricultural trade,
which might specify some of these commodities.
Any efforts to promote the export of other U.S.
commodities should not be done at the expense of marketing
opportunities for U.S. wheat and corn.
B. Spacing Provisions
Article III of the current LTA calls upon the USSR to
space grain purchases and shipments as evenly as possible.
While we have no problem with this provision, with the
improvements in our monitoring system, it is no longer
necessary. The U.S. could trade this away if the Soviets
seek to eliminate it.
C. Destination
Article IV of the current LTA provides that, unless
otherwise agreed, wheat and corn purchased under the
CONFIDENTIAL
10
CONFIDENTIAL
agreement shall be consumed in the USSR. The U.S. should
seek to retain this provision unchanged.
D. Procedures for Additional Purchases
The procedures set forth in Article VI of the current
LTA should be maintained without change.
E. Consultations
Retain semi-annual consultations as at present (Article
VIII of the current LTA). The United States should also push
for wording providing for additional information sharing.
The Soviets have typically been uncooperative in providing
information on crop prospects and product availability; this
attitude is not likely to change in the near future.
However, the United States may want to make use of this issue
to put the Soviets on the defensive.
F. Maritime Agreement Reference
The language of Article VII of the current LTA, which
states only that the LTA should be in accord with the
American-Soviet Maritime Agreement, should be retained as is.
USG should not open it for discussion as the existing
sanction precludes discussion at the present time. The
CONFIDENTIAL
22
11
CONFIDENTIAL
present language covers the situation when no agreement
exists. We should reject any Soviet efforts to negotiate a
maritime agreement in the context of the LTA. (However,
pressure to lift the Poland sanction suspending maritime
negotiations may arise from the U.S. industry, and the
Soviets themselves may raise the question of a new maritime
agreement. Either could necesitate a separate review of the
issue of negotiating a new maritime agreement.)
L. Calendar Year/Fiscal Year
While the United States prefers to maintain the
October/September year, we can accept either.
M. Credit/Countertrade
The United States cannot accept any provisions relating
to credit or countertrade. Credit must be arranged by the
Soviet government with the private sector.
OUNFIDENTIAL
ATTACHMENT II
23
January 1, 1981, except as otherwise provided for in Article II, of a
total quantity of at least 6 to 8 million metric tons of United States
wheat and com, of which approximately 15 to 20 percent will be com.
2. The Government of the People's Republic of China agrees to
purchase for shipment during each 12-month period beginning January 1,
1981, except as otherwise provided for in Article II, a total quantity
of at least 6 to 8 million metric tons of United States wheat and com,
of which approximately 15 to 20 percent will be corn.
3. Purchases/sales of wheat and com under this agreement will be
made at market prices prevailing at the time of purchase/sale and in
accordance with normal commercial terms.
ARTICLE II
1. The Government of the United States of America shall endeavor
to assure the availability of wheat and com supplies through advance
planning of production and stockbuilding fully to meet the import re-
quirements of the People's Republic of China under the provisions of
this agreement. If by virtue of exceptional circumstances necessitating
the application of measures limiting the availability of United States
wheat and com in respect to all foreign purchasers of United States
grain, it becomes necessary in a particular year to supply less than
the quantities specified in Article I, there shall be prior consulta-
tions between the two parties as to the amount of such adjustment.
24
Any such measure which shall be applied to the exports of United States
wheat and corn to the People's Republic of China shall be carried out
on a basis no less favorable than to such exports to other foreign pur-
chasers of United States grain.
2. If by virtue of exceptional circumstances making it impossible
for the People's Republic of China to accommodate available supplies
necessitating the reduction of minimum levels of normal imports from
all foreign suppliers it becomes necessary in a particular year to pur-
chase less than the quantities specified in Article I, there shall be
prior consultations between the two parties as to the amount of such
adjustment. Any such reduction of imports of United States wheat and
corn which shall be applied to imports from the United States shall be
carried out on a basis no less favorable than to imports from other
foreign suppliers.
ARTICLE III
The United States of America expects to supply to the People's
Republic of China and encourages the People's Republic of China to
meet increased import requirements by purchases of wheat and corn from
the United States. Therefore, if during the period that the agreement
is in force, the People's Republic of China intends to purchase quanti-
ties of United States wheat and corn in excess of the 8 million metric
tons specified in Article I by more than 1 million metric tons, there
shall be prior notice to the Government of the United States of America.
The Government of the United States of America shall promptly inform
TREATIES AND other INTERNATIONAL ACTS series 8206
GRAINS AGREEMENT
Between the
UNITED STATES OF AMERICA
and the UNION OF SOVIET
SOCIALIST REPUBLICS
Signed at Moscow October 20, 1975
UNITED STATES OF STATE
OF
NOTE BY THE DEPARTMENT OF STATE
Pursuant to Public Law 89-497, approved
July 8, 1966 (80 Stat. 271; 1 U.S.C. 113)-
the Treaties and Other International Acts
Series issued under the authority of the Secretary of
UNION OF SOVIET SOCIALIST REPUBLICS
State shall be competent evidence
...
of the treaties,
international agreements other than treaties, and proc-
Grains Agreement
lamations by the President of such treaties and inter-
national agreements other than treaties, as the case
may be, therein contained, in all the courts of law
Signed at Moscow October 20, 1975;
and equity and of maritime jurisdiction, and in all the
Entered into force October 20, 1975.
tribunals and public offices of the United States, and
of the several States, without any further proof or
authentication thereof."
For sale by the Superintendent of Documents, U.S. Government Printing Office,
Washington, D.C. 20402. Subscription Price: $27 per year; $6.75 additional
for foreign mailing. Single copies vary in price. This issue 35 cents.
(1)
TIAS 8206
70-408-76
AGREEMENT BETWEEN
THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND
THE GOVERNMENT OF THE UNION OF SOVIET SOCIALIST REPUBLICS
the
The foreign trade organizations of the USSR may increase this
quantity ithout consultations by up to two million metric tons in
ON THE SUPPLY OF GRAIN
any twelve month period, beginning October 1, 1976 unless the
Government of the USA determines that the USA has a grain supply of
The Government of the United States of America ("USA") and the
less than 225 million metric tons as defined in Article
Government of the Union of Soviet Socialist Republics ("USSR");
Purchases/sales of wheat and corn under this Agreement will be
Recalling the "Basic Principles of Relations Between the
made at the market price prevailing for these products at the time
United States of America and the Union of Soviet Socialist Republics"
of May 29, 1972; [1]
of purchase/sale and in accordance with normal commercial terms.
Desiring to strengthen long-term cooperation between the two
ARTICLE II
countries on the basis of mutual benefit and equality;
During the term of this Agreement, except as otherwise agreed
Mindful of the importance which the production of food, parti-
by the Parties, the Government of the USA shall not exercise any
cularly grain, has for the peoples of both countries;
discretionary authority available to it under United States law to
Recognizing the need to stabilize trade in grain between the
control exports of wheat and corn purchased for supply to the USSR
two countries;
in accordance with Article I.
Affirming their conviction that cooperation in the field of
ARTICLE III
trade will contribute to overall improvement of relations between
In carrying out their obligations under this Agreement, the
the two countries;
foreign trade organizations of the USSR shall endeavor to space their
Have agreed as follows:
purchases in the USA and shipments to the USSR as evenly as possible
ARTICLE I
over each 12-month period.
The Government of the USA and the Government of the USSR hereby
ARTICLE IV
enter into an Agreement for the purchase and sale of wheat and corn
The Government of the USSR shall assure that, except as the
for supply to the USSR. To this end, during the period that this
Parties may otherwise agree, all wheat and corn grown in the USA and
Agreement is in force, except as otherwise agreed by the Parties,
purchased by foreign trade organizations of the USSR shall be supplied
(1) the foreign trade organizations of the USSR shall purchase from
for consumption in the USSR.
private commercial sources, for shipment in each twelve month period
beginning October 1, 1976, six million metric tons of wheat and corn,
ARTICLE V
in approximately equal proportions, grown in the USA; and (ii) the
In any year this Agreement is in force when the total grain
Government of the USA shall employ its good offices to facilitate
supply in the USA, defined as the official United States Department
and encourage such sales by private commercial sources.
of Agriculture estimates of the carry-in stocks of grain plus the
official United States Department of Agriculture forward crop
1 Department of State Bulletin, June 26, 1972, p. 898.
TIAS 8206
TIAS 8206
4
5
estimates for the coming crop year, falls below 225 million metric
ARTICLE IX
tons of all grains, the Government of the USA may reduce the quantity
This Agreement shall enter into force on execution and shall
of wheat and corn available for purchase by foreign trade organiza-
remain in force until September 30, 1981 unless extended for a
tions of the USSR under Article I(i).
mutually agreed period.
ARTICLE VI
Whenever the Government of the USSR wishes the foreign trade
DONE at Moscow, this 20th day of Ostober, 1975,
organizations of the USSR to be able to purchase more wheat or corn
in duplicate, in the English and Russian languages, both texts
grown in the USA than the amounts specified in Article I, it shall
being equally authentic.
immediately notify the Government of the USA.
Whenever the Government of the USA wishes private commercial
sources to be able to sell more wheat or corn grown in the USA
FOR THE GOVERNMENT OF THE
FOR THE GOVERNMENT OF THE UNION
than the amounts specified in Article I, it shall immediately notify
UNITED STATES OF AMERICA:
OF SOVIET SOCIALIST REPUBLICS:
charles w Robin [1]
[*]
the Government of the USSR.
In both instances, the Parties will consult as soon as possible
[SEAL]
[SEAL]
in order to reach agreement on possible quantities of grain to be
supplied to the USSR prior to purchase/sale or conclusion of con-
tracts for the purchase/sale of grain in amounts above those
specified in Article I.
1 Charles W. Robinson
'N. Patolichev
ARTICLE VII
It is understood that the shipment of wheat and corn from the
USA to the USSR under this Agreement shall be in accord with the
[1]
provisions of the American-Soviet Agreement on Maritime Matters which
is in force during the period of shipments hereunder.
ARTICLE VIII
The Parties shall hold consultations concerning the implementation
of this Agreement and related matters at intervals of six months
beginning six months after the date of entry into force of this
Agreement, and at any other time at the request of either Party.
TIAS 8195; 26 UST.
TIAS 8206
6
7
ССГЛАШЕНИЕ
2.
Правительством между Правительством Соединенных Штатов Америки и
Республик 0 поставках 3epHa
Союза Советских Социалистических
Закупки-продажи пшеницы и кукурузы по настоящему Соглашению
будут осуществляться по рыночным ценам, преобладающим Ha время
закупки-продажи и B соответствии c обычными коммерческими условиями
Статья П
Правительство Соединенных Штатов Америки и
Правительство Союза Советских Социалистических Республик,
B течение cpoKa действия настоящего Соглашения, 3a исключе-
нием случаев иной договоренности CTopoH, Правительство США He будет
Америки и Союзом Советских Социалистических Республик oT
исходя из OcHoB взаимоотношений между Соединенными Штатами
пользоваться какими-либо диспозитивными полномочиями согласно 3aKo-
29 мая 1972 года,
HaM США для установления контроля над экспортом пшеницы и кукурузы,
закупленных для поставки B CCCP B соответствии CO статьей I.
странами Ha базе взаимной выгоды и paBeHcTBa,
желая укреплять долгосрочное сотрудничество между двумя
Статья Ш
учитывая важность производства продуктов питания и, B част-
При выполнении обязательств по настоящему Соглашению внешне-
ности, 3epHa для народов обеих cTpaH,
торговые организации CCCP будут стараться осуществлять свои закуп-
признавая необходимость стабилизации торговли 3epHoM между
ки B США и отгрузки B CCCP KaK можно равномерней B течение каждого
обеими странами,
I2-месячного периода.
подтверждая cBoe убеждение B ToM, что сотрудничество
между обеими странами,
области торговли будет содействовать общему улучшению отношений B
Статья IV
Правительство CCCP заверяет, что, 3a исключением случаев
согласились 0 нижеследующем:
иной договоренности CTopoH, вся пшеница и KyKypy3a, выращенные B
США и закупленные внешнеторговыми организациями CCCP, будут постав-
ляться для потребления B CCCP.
Статья I
Соглашение o закупке и продаже пшеницы и кукурузы заключают
Правительство США и Правительство CCCP настоящим
Статья y
Если B любой год действия настоящего Соглашения общие ресурсы
B CCCP. B этих целях B течение cpoKa действия настоящего для поставки Согла-
3epHa B США, определяемые по официальной оценке Министерства сель-
шения, (I) 3a исключением случаев иной договоренности
cKoΓo хозяйства США, исходя из запасов плюс предварительные прогно-
ских внешнеторговые организации CCCP закупят y частных CTopoH:
зы урожая Ha текущий сельскохозяйственный год, окажутся ниже
начиная фирм c отгрузкой B течение каждого I2-месячного коммерче-
225 миллионов метрических ToHH 3epHa Bcex видов, Правительство США
c I октября 1976 года, по 6 миллионов метрических периода,
может уменьшить количества пшеницы и кукурузы, которые внешнеторго-
B пшеницы и кукурузы, примерно B paBHoM соотношении, ToHH
вые организации CCCP MoΓyT закупать согласно статье I.(I).
США; (2) Правительство США будет доступными eMy выращенных
Статья УІ
фирмами. содействовать и поощрять такие запродажи частными коммерческими средствами
B случае, Правительство CCCP пожелает, чтобы внешне-
без Внешнеторговые организации CCCP MoΓyT увеличить эти
торговые организации CCCP имели возможность закупить большие коли-
cTBa консультаций B pa3Mepax до 2 миллионов количе-
чества пшеницы или кукурузы, выращенные B США, чем количества, yKa-
B любой Ӏ2-месячный период, начиная c I октября метрических I976 ToHH
занные B статье I, oHo незамедлительно сообщит об этом Правительс-
Правительство США He определит, что США имеют зерновые года, если
TBy США.
определено B статье y.
количествах, "меньших чем 225 миллионов метрических ToHH, ресурсы KaK это B
TIAS 8206
TIAS 8206
8
B случе, если Правительство США пожелает, чтобы частные
коммерческие фирмы имели возможность продать B CCCP пшеницу или
KyKypy3y, выращенные B США, cBepx количеств, указанных B статье I,
oHo незамедлительно сообщит об этом Правительству CCCP.
B обоих случаях до закупки-продажи или заключения KoHTpaKToB
Ha закупку-продажу 3epHa cBepx количеств, указанных B статье I,
Стороны B возможно короткий cpoK проведут консультации для дости-
жения договоренности 0 возможных объемах закупки-продажи 3epHa
для поставки B CCCP.
Статья УП
Понимается, что при перевозках пшеницы и кукурузы из США B
CCCP будут применяться положения американо-советского соглашения
по вопросам MopcKoΓo судоходства, KoTopoe будет действовать B
период перевозки 3epHa по настоящему Соглашению.
Статья УШ
Стороны будут проводить консультации по выполнению настоящего
Соглашения и связанным c ним вопросам каждые 6 месяцев, начав их
через 6 месяцев после вступления B силу настоящего Соглашения, a
также B любое другое время по требованию каждой из CTopoH.
Статья IX
Настоящее Соглашение вступает B силу B день eΓo подписания и
будет действовать до 30 сентября I981 года, если по согласию CTo-
poH oHo He будет продлено His дополнитсльный, взаимно согласован-
ный период.
Совершено B MocKBe "20" октября 1975 года B двух экземплярах,
каждый Ha английском и pyccHoM языках, причем оба TeKcTa имеют
одинаковую силу.
3a Правительство
3a Правительство Союза
Соединенных Штатов Америки
Советских Социа вистических
Charles W Rolin
(SEAL)
[SEAL]
TIAS 8206
MEMORANDUM
31
NATIONAL SECURITY COUNCIL
Grain 1:30 Thursday
SECRET SENSITIVE
Sit Room
INFORMATION
June 9, 1983
MEMORANDUM FOR WILLIAM P. CLARK
FROM:
DOUGLAS W. MCMINN
MM
SUBJECT:
U.S. -Soviet Negotiations on a New Long-Term
Grain Agreement (LTA)
The initial round of negotiations for a new LTA (June 2, in
London) was constructive and non-polemical. While major
differences remain on several issues, the Soviets made clear
their readiness and desire to conclude a new LTA soon. There
was joint agreement to use the existing LTA framework as the
basis for negotiations.
With regard to the next round of negotiations, to be held in
Moscow June 20-21, the Soviets hinted they would like this to be
a major negotiation session with the signing of an agreement
some time shortly thereafter. It is open to question whether
such an optimistic timetable is possible. The Soviets also made
known their desire that a Cabinet-level official sign the
agreement and they would like the signing ceremony in Moscow.
Our negotiators told the Soviets that no decision had been made
on who might sign for the U.S. and where.
Based on the June 2 discussions, the major substantive
differences between the Soviets and ourselves are as follows:
Minimum Purchase Levels
Whereas the present agreement has a range of 6-8 million tons
for the minimum and maximum purchase levels, the Soviets
suggested a range of 6-12 million tons with delivery assurances
not only on those amounts, but also on additional amounts
offered during regular bilateral consultations (in effect on all
Soviet purchases of U.S. grain). The Soviets also want separate
USG assurances to intervene in case of longshoremen boycotts,
strikes, etc. The U.S. side countered with a minimum purchase
range of 16-19 million tons, which the Soviets rejected; the
U.S. indicated we were willing to consider a lower number. The
U.S. side "hung tough" on the supply assurances issue and
offered no more than current Article 2 delivery assurances.
Declassify on: OADR
DECLASSIFIED
SECRET
NLRR F06-114/8#10068
BY 205 NARA DATE 9/30/08
SECRET/SENSITIVE
SECRE
32
Short Supply
The Soviets reacted negatively to the U.S. proposal that the
short supply trigger (permitting the U.S. to reduce deliveries
if our crop situation dictated) be raised from 225 million tons
to 280. The Soviets want to delete this provision altogether,
arguing it makes the LTA imbalanced because it gives the U.S. an
"out" whereas the Soviets do not have one.
Quality
The Soviets argued for inclusion of a provision that the USG
would guarantee quality levels set in contracts and that the
Soviets would be relieved of their purchase obligations if grain
were not up to particular quality standards. The U.S. side
suggested it would explore a "good offices provision" by the
USG, but strongly rejected the notion of a Soviet escape clause
from its minimum purchase obligations.
Maritime Agreement
The Soviets argued for negotiation of a new maritime agreement,
even though acknowledging that shipments were proceeding
smoothly now in the absence of a maritime agreement. They
indicated that at a minimum, retention of Article 7 of the
present agreement was essential. (We have no problem with
retaining Article 7, which merely stipulates that grain
shipments be conducted in accord with the maritime agreement in
effect at the time, but the U.S. delegation simply noted we were
not authorized to negotiate a new maritime agreement).
**
In private discussions with our chief negotiators this
week, I reaffirmed the President's position that he favors
mutually beneficial trade with the Soviets, on the basis of
regular commercial considerations, i.e., no "special
deals." I emphasized that major additional guarantees to
the Soviets on supply assurance (over and above those in
the existing agreement) would run counter to the
President's position.
CC: Norman Bailey
SECRET SENSITIVE
SECRET
8315220 FILE USSR 33
United States Department of State GRAIN
Washington. D.C. 20520
May 17, 1983
CONF IDENTIAL
58
MEMORANDUM FOR MR. WILLIAM P. CLARK
URGENT
THE WHITE HOUSE
SUBJECT: Press Guidance on LTA for the President's Press
Conference
Attached for the President's use at tonight's press
conference is press guidance on the issue of the Long-Term
Grain Agreement with the Soviets.
Charles Hill
Executive Secretary
to
DECLASSIFIED
Department of State Guidelines, July 21, 1997
By smp NARA, Date 7/24/02
CONFIDENTIAL
DECL: OADR
34
May 17, 1983
US/SOVIET LONG-TERM GRAIN AGREEMENT
Q: How were the Soviets informed?
on April 7
A: The Soviets were informed here in Washington. They
responded May 17.
Q: Why did the Soviets take so long to respond?
A: We don't know. But we are pleased they have now done so.
Q: When will the talks begin?
A: That has not yet been determined.
Q: Who will head our delegation?
A: The U.S. Trade Representative or his designee.
Q: Have the Allies been informed yet?
A: Yes.
Q: Won't the Soviets get the wrong message?
A: We remain concerned about the USSR's behavior--including
its military buildup, its geopolitical expansionism and its
record of human rights violations. Our agenda for
relations with the Soviets will continue to include human
rights, arms control and regional issues as well as
bilateral issues like trade. We are not stepping back from
our strong policy opposing Soviet misbehavior.
35
-2-
Q: Isn't this a change in our economic policy towards the USSR?
A: We believe that economic relations with the USSR should not
contribute to the Soviet military buildup or strategic
capability, and that trade should be conducted in a prudent
manner without preferential treatment. At the same time,
it is not our intention to conduct "economic warfare"
against the USSR. We do support mutually beneficial,
non-strategic trade in such areas as grains.
Q: Why did we lift this sanction? Have the Soviets made some
gesture on Poland?
A: This step was taken to reaffirm our reliability as a
supplier of grain. The sanction postponing LTA
negotiations has already made our political point with the
Soviets. Continuation was pointless due to the willingness
of Canada, France and Argentina to enter into new or
expanded arrangements with the USSR in order to increase
their sales of grain.
Q: What about the remaining Poland sanctions? What is their
status?
A: Their status remains unchanged.
Q: Will they be reviewed?
A: We're taking a comprehensive look at the situation in
Poland and will discuss our conclusions with our Allies.
36
-3-
Q: How much grain did the Soviets buy from us last year? How
much grain have they bought this year? What is the current
outlook for Soviet grain purchases?
A: The U.S. currently supplies about 20 percent of Soviet
grain import needs compared to about 70 percent before the
grain embargo. The Soviet purchased about 15 million tons
of grain from the U.S. in marketing year 81-82 (a market
year runs from July 1 to June 30). So far in marketing
year 82-83 they have purchased a little more than 6 million
tons of grain. USDA has estimated that the Soviets would
import about 34 million tons of grain from all sources in
this marketing year, most of which they have already
purchased. Nevertheless, we still hope for further Soviet
purchases of U.S. grain this marketing year.
Q: Haven't we already given the Soviet adequate delivery
assurances?
A: We have laid down a clear policy to establish the US as a
reliable grain supplier by announcing stringent conditions
for any future embargoes and accepting the agricultural
contract sanctity provisions contained in the Durenburger
Amendment to the Commodity Futures Trading Commission Act.
Our decision to propose negotiation of a new LTA is
entirely consistent with that policy.
37
-4-
Q: Won't this step undercut our efforts to reach a new
consensus on east-west trade with the Allies?
A: Negotiation of a new LTA in no way contradicts the thrust
of the economic policy toward the USSR we are pursuing with
the Allies. Our grain sales are on commercial terms and
are not made with government-supported credits or
guarantees. A new LTA will provide a structure to manage
the US-Soviet grain trade and allow us to plan our exports
in a prudent fashion. This Administration has never
proposed a grain embargo of the USSR; indeed the Allies
have also maintained their grain relationship with the USSR.
Q: Was this step taken in retaliation for subsidized EC
agricultural sales?
A: This decision was not taken in retaliation for EC
agricultural export policy. We remain committed to
resolving this difficult question by negotiations.
Q: How long will the new agreement be for, and will it provide
for higher minimum Soviet purchases?
A: The answer to these questions of course will be resolved
during the negotiations. We don't want to discuss our
negotiating strategy now but obviously we hope the
agreement will lead to enhanced levels of Soviet purchases
of US grain.
30
-5-
Q: Why was this announcement made now?
A: Moving now will provide time to prepare for and conduct the
negotiations before the present agreement expires on
September 30.
Q: Will a new Maritime Agreement be negotiated at the same
time?
A: Negotiations on a new Maritime Agreement were suspended in
December, 1981, following the declaration of martial law in
Poland. This situation is unchanged.
22/6
8315220
grain 40
File
United States Department of State
Washington. D.C. 20520
to
May 17, 1983
CONFIDENTIAL
59
MEMORANDUM FOR MR. WILLIAM P. CLARK
THE WHITE HOUSE
URGENT
SUBJECT: Press Guidance on LTA for the President's Press
Conference
Attached for the President's use at tonight's press
conference is press guidance on the issue of the Long-Term
Grain Agreement with the Soviets.
Charles Hill
Executive Secretary
of DECLASSIFIED State Guidelines, July 7/24/02 21, 1997
Department By smf NARA, Date
39
Return to
files
his
]
Corcern
CONFIDENTIAL
DECL: OADR
41
May 17, 1983
US/SOVIET LONG-TERM GRAIN AGREEMENT
Q: How were the Soviets informed?
on April 7
A: The Soviets were informed/here in Washington. They
responded May 17.
Q: Why did the Soviets take so long to respond?
A: We don't know. But we are pleased they have now done so.
Q: When will the talks begin?
A: That has not yet been determined.
Q: Who will head our delegation?
A: The U.S. Trade Representative or his designee.
Q: Have the Allies been informed yet?
A: Yes.
Q: Won't the Soviets get the wrong message?
A: We remain concerned about the USSR's behavior--including
its military buildup, its geopolitical expansionism and its
record of human rights violations. Our agenda for
relations with the Soviets will continue to include human
rights, arms control and regional issues as well as
bilateral issues like trade. We are not stepping back from
our strong policy opposing Soviet misbehavior.
42
-2-
Q: Isn't this a change in our economic policy towards the USSR?
A: We believe that economic relations with the USSR should not
contribute to the Soviet military buildup or strategic
capability, and that trade should be conducted in a prudent
manner without preferential treatment. At the same time,
it is not our intention to conduct "economic warfare"
against the USSR. We do support mutually beneficial,
non-strategic trade in such areas as grains.
Q: Why did we lift this sanction? Have the Soviets made some
gesture on Poland?
A: This step was taken to reaffirm our reliability as a
supplier of grain. The sanction postponing LTA
negotiations has already made our political point with the
Soviets. Continuation was pointless due to the willingness
of Canada, France and Argentina to enter into new or
expanded arrangements with the USSR in order to increase
their sales of grain.
Q: What about the remaining Poland sanctions? What is their
status?
A: Their status remains unchanged.
Q: Will they be reviewed?
A: We're taking a comprehensive look at the situation in
Poland and will discuss our conclusions with our Allies.
43
-3-
Q: How much grain did the Soviets buy from us last year? How
much grain have they bought this year? What is the current
outlook for Soviet grain purchases?
A: The U.S. currently supplies about 20 percent of Soviet
grain import needs compared to about 70 percent before the
grain embargo. The Soviet purchased about 15 million tons
of grain from the U.S. in marketing year 81-82 (a market
year runs from July 1 to June 30). So far in marketing
year 82-83 they have purchased a little more than 6 million
tons of grain. USDA has estimated that the Soviets would
import about 34 million tons of grain from all sources in
this marketing year, most of which they have already
purchased. Nevertheless, we still hope for further Soviet
purchases of U.S. grain this marketing year.
Q: Haven't we already given the Soviet adequate delivery
assurances?
A: We have laid down a clear policy to establish the US as a
reliable grain supplier by announcing stringent conditions
for any future embargoes and accepting the agricultural
contract sanctity provisions contained in the Durenburger
Amendment to the Commodity Futures Trading Commission Act.
Our decision to propose negotiation of a new LTA is
entirely consistent with that policy.
44
-4-
Q: Won't this step undercut our efforts to reach a new
consensus on east-west trade with the Allies?
A: Negotiation of a new LTA in no way contradicts the thrust
of the economic policy toward the USSR we are pursuing with
the Allies. Our grain sales are on commercial terms and
are not made with government-supported credits or
guarantees. A new LTA will provide a structure to manage
the US-Soviet grain trade and allow us to plan our exports
in a prudent fashion. This Administration has never
proposed a grain embargo of the USSR; indeed the Allies
have also maintained their grain relationship with the USSR.
Q: Was this step taken in retaliation for subsidized EC
agricultural sales?
A: This decision was not taken in retaliation for EC
agricultural export policy. We remain committed to
resolving this difficult question by negotiations.
Q: How long will the new agreement be for, and will it provide
for higher minimum Soviet purchases?
A: The answer to these questions of course will be resolved
during the negotiations. We don't want to discuss our
negotiating strategy now but obviously we hope the
agreement will lead to enhanced levels of Soviet purchases
of US grain.
4t,
-5-
Q: Why was this announcement made now?
A: Moving now will provide time to prepare for and conduct the
negotiations before the present agreement expires on
September 30.
Q: Will a new Maritime Agreement be negotiated at the same
time?
A: Negotiations on a new Maritime Agreement were suspended in
December, 1981, following the declaration of martial law in
Poland. This situation is unchanged.
CONFIDENTIAL Main
McMinn
46
3370
Chron
MEMORANDUM
CONFIDENTIAL
NATIONAL SECURITY COUNCIL
INFORMATION
May 17, 1983
MEMORANDUM FOR JOHN M. POINDEXTER
FROM:
DOUGLAS McMINN
Hill
SUBJECT:
Negotiation of a New Long-Term Grain
Agreement (LTA) with the Soviets
The Soviets have now agreed to negotiate a new LTA. Dobrynin has said
that they would be prepared for preliminary discussions on June 1-2,
in London. An interagency working group has been meeting for the past
three weeks to outline the key issues we will face in negotiating a
new agreement with the USSR. The working group, in which I have
participated, has developed the attached paper for review (Tab I). The
paper will be vetted around town and outstanding issues will be raised
to policy levels this week for discussion.
Essentially, there is agreement to use the existing agreement as the
basis for negotiation, but two major negotiating issues require
decision.
Basic Purchase Levels:
Should we seek to retain the purchasing mechanism of the existing LTA
(minimum and maximum purchase levels) or explore a new approach which
would tie the basic purchase levels specified in the agreement to
trade performance (a sliding scale approach) ?
Our basic objective in the negotiations is to maximize U.S.
sales while avoiding possible market disruption caused by
large Soviet purchases.
-- The introduction of a sliding scale approach runs
counter to this objective.
-- A sliding scale would encourage the Soviets to buy from
suppliers other than the U.S. in years in which they
have a very heavy demand for imports (so as to avoid
too great an increase in their minimum purchase require-
ment from the United States in subsequent years.)
It's been my experience in negotiating with the Soviets and
Eastern Europeans that you have to keep the concepts simple.
--
Introduction of the sliding scale approach would
complicate the negotiations enormously and would prove
counterproductive to our goals.
DECLASSIFIED
CONFIDENTIAL
NLRR F06-114/87+10069
Declassify on: OADR
CONFIDENTIAL
BY LOJ NARA DATE 9/30/08
CONFIDENTIAL
47
CONFIDENTIAL
2
State, USTR and USDA all agree that we should retain the
purchasing mechanism in the existing agreement, but with
increased purchase levels. I concur with this majority
view.
Supply Assurances:
Should we seek an extension of the guarantees contained in the
existing LTA (Article II) or should we be prepared to provide for
additional guarantees?
The President has indicated that the U.S. favors mutually
beneficial trade with the Soviets, on the basis of regular
commercial considerations, i.e., no "special deals."
:
Providing major additional guarantees to the Soviets on
supply assurance (over and above those in the existing
agreement) runs counter to the President's position.
Additional guarantees on supply assurance undercut our
desire to increase the minimum purchase level.
Language in the existing agreement provides a guarantee
to the Soviets on all the grain covered by the minimum
purchase level.
We want to keep this language as an inducement to the
Soviets to increase the minimum purchase level.
:
The higher the minimum purchase level agreed to by the
Soviets, the more grain that will be covered by the
supply assurance guarantee.
State favors "hanging tough" on the existing supply assurance language.
USDA favors having additional guarantees available as bargaining
chips, but only as a fall-back. USTR is riding the fence on this
question. I believe State's position is the proper one on the supply
assurance issue and I have been supporting them.
I will continue to coordinate with Norm Bailey, John Lenczowski and
Roger Robinson on this issue.
Attachment
Tab I - Working Group Paper
Tab A - Long-Term Grain Agreement Paper
CC: Norman Bailey
Henry Nau
John Lenczowski
Roger Robinson
CONFIDENTIAL
CONFIDENTIAL
TAB I
49
CONFIDENTIAL
5/17
TO:
FROM:
Ambassador Robert E. Lighthizer
SUBJECT: Negotiation of a new Long-Term Grain Agreement
(LTA) with the USSR
The Soviets have now accepted our proposal to negotiate
a new LTA. Ambassador Dobrynin indicated that the Soviets
would be receptive to having preliminary discussions on
June 1-2. Therefore, we should move ahead expeditiously with
our preparations for these talks. The attached paper, which
was developed by an interagency working group, outlines the
major issues we will face in negotiating a new agreement.
For a few key issues, options are presented as a basis for
higher level decision. On most other elements of an
agreement, there appears to be broad agreement at the working
level and positions are recommended.
I would urge that you review this paper carefully and
that we meet for a preliminary discussion of LTA negotiations
on
For your convenience, a copy of the existing LTA is also
attached.
DECLASSIFIED
CONFIDENTIAL
NLRR F06-114/8#10075
BY has NARA DATE 9/30/08
2
CONFIDENTIA!
U.S.-USSR LONG-TERM AGREEMENT ON GRAINS
1.
Basic Objectives
Maximize sales opportunities for the grains trade and,
to the extent feasible, for other U.S. agricultural products.
Protect against possible market disruption caused by Soviet
purchases. Improve knowledge of Soviet purchasing
intentions. [Avoid to extent possible arrangements that
constitute a "special deal" for the USSR vis-a-vis other
purchasers. Proposed by State. USDA questions need for, and
possible interpretation of, this statement.]
2.
Specific Objectives: Key Decisions Required
A. Basic Purchase Levels
A decision must be taken as to whether to seek only
to retain the mechanism of the existing LTA (with increased
amounts) or to explore a sliding scale mechanism with the
USSR. Another possibility would be to explore the sliding
scale approach only if we are unable to reach agreement with
the Soviets on increased basic purchase levels within the
framework of the existing mechanism.
The simplest approach would, of course, be to seek to
maintain the mechanism provided by Article 1 of the existing
CONFIDENTIAL
3
CONFIDENTIA
agreement but to raise both the minimum purchase level and
the maximum amount without consultations by a significant
amount. Initially, the United States might propose 14-16
MMT. While a lower figure might be acceptable, the United
States should seek a significant increase above the 6-8 MMT
specified in the current agreement. The United States would
also want to keep the fork between the minimum purchase and
the maximum purchase without consultations (2 MMT under the
current agreement) relatively narrow. The prospect of
widening the fork might, however, be used to secure a Soviet
commitment to higher minimum purchase levels. As a rule of
thumb, the United States might insist that the fork should
not be more than one-third of the minimum purchase level.
The sliding scale approach would tie the basic purchase
levels specified in the agreement to trade performance. For
example, the top end of the range might be set as equal to
the average level of U.S. grain exports to the USSR in the 3
preceding years; the minimum would be 2-3 million tons below
that level -- or fixed as a certain percentage of that level.
With this approach, the basic purchase levels of the
agreement would tend to track actual Soviet purchases from
the United States (which it is hoped will expand under the
framework of a new LTA).
ONFIDENTIAL
52
(papa 4 by CONFIDENTIAL forward)
Attachment I details the advantages and disadvantages of
the sliding scale approach. The main advantage of the
sliding scale approach is that (assuming a generally upward
trend in Soviet imports) it would tend to guarantee ever
larger U.S. grain sales to the Soviet market. It might also
encourage the Soviets to buy from the United States so as to
increase their "rights" to U.S. grain. Conversely, the
introduction of a sliding scale might encourage the Soviets
to buy from suppliers other than the United States in years
of very heavy imports so as to avoid too great an increase in
their minimum purchase requirement. Also, if Soviet imports
trended down it would result in lower minimum purchase
levels. Exploration of the alternative approach would also
tend to complicate and, possibly, slow the negotiations --
especially as Soviet negotiating instructions are likely to
be rigid.
B. Supply Assurances
The U.S. should be prepared to accept an extension
of the guarantees contained in existing agreements, utilizing
the same wording as in Article II.
The Soviets may, however, press for additional
guarantees and could make such guarantees a precondition for
the achievement of certain U.S. negotiating objectives (e.g.,
CONFIDENTIAL
53
5
a higher minimum). A decision must be taken as to whether
any such guarantees might be offered. If so, three
possibilities are:
1. Extension of the assurances provided by the
Durenberger amendment (which covers 27.0 days) to 1 year for
sales concluded within the framework of the agreement.
2. Apply assurances to all contracts concluded within
the framework of the LTA.
3. Apply assurances to trade levels (in excess of basic
purchase levels) mutually agreed to at the biannual
consultations held under LTA auspices. This would involve a
formal Soviet commitment to a level of imports in excess of
basic purchase levels -- something they have thus far been
unwilling to do.
C. Short-Supply Provision
Both Article I and Article V of the current LTA
allows the United States to reduce the amount of grain
available to the Sovièts under the LTA if the total supply of
grain in the United States falls below 225 million tons, a
level which would now represent a catastrophic shortage. A
decision must be taken as to the nature of the short-supply
CONFIDENTIAL
6
CONFIDENTIA
provision we should seek in a new LTA and as to what
provisions might be acceptable as fallbacks. The United
States has the following options in approaching this issue:
1. Raise the trigger to a more realistic level. This
would give protection to the U.S. market and lessen the
chance that the United States might ever have to abrogate the
agreement. It would also give little cause for the assertion
that we are giving the Soviets greater assurances than those
given to other customers. The Soviets might, however, resist
any increase in the trigger point -- as lessening the
guarantees they now enjoy.
2. Develop some alternative formulation. One
possibility would be to provide for consultations in the
event of short supply (with the possibility of adjusting U.S.
obligations under the LTA). Such a provision might parallel
Article II of the U.S.-PRC agreement (see Attachment II)
which states that any measure applied to grain exports to the
PRC will be no less favorable than that applied to other
importers. This option would give least ground for the
assertion that the LTA gives preferred status to the USSR.
However, it might be opposed by the USSR or, alternatively,
the Soviets might seek to structure the provision so as to
permit a reduction of the USSR's obligations.
CONFIDENTIAL
7
55
CONFIDENTIAL
Another possibility, whichever of these two options are
followed, would be to continue the short supply exemption
with reference only to the forked quantity (now covered in
para 2 of Article I) but, as an added bargaining point for
obtaining a higher minimum, to offer to eliminate the short
supply provision entirely with respect to the basic minimum
quantity (Currently, this aspect is dealt with spearately
under Article V).
D. Timeframe
This seemingly simple decision is complicated by the
fact that a 5-year agreement (the length of the existing LTA)
would expire in the midst of the 1988 election campaign. A
decision must be taken as to which of the following options
to pursue:
1. A 5-year agreement;
2. A 5-year agreement with provision for automatic
extension, possibly for 1 year at a time, unless either party
decides to the contrary. This would probably enable us to
avoid renegotiation during a campaign year, although if the
Soviets chose not to extend we would essentially be in the
first option; or
CONFIDENTIAL
8
3. A 6-year agreement.
E. Specific Objectives - Other Elements of a new LTA
There is broad interagency agreement on the
recommended positions described below.
A. Commodity Mix/Other Commodities
A balance between wheat and corn must be maintained in a
new LTA. As an initial negotiating position, the United
States might push to maintain the requirement that 50 percent
of the minimum purchase requirement consist of wheat. While
we have some flexibility on this point, we need to obtain
some increase above the 3 MMT minimum for wheat in the
current agreement.
The United States may explore the possibility of
incuding other grain and feed type products (soybean meal,
corn gluten feed, wheat flour, rice) in a new LTA. In the
case of wheat flour and corn gluten feed, such inclusion
might mean only a provision allowing these commodities to
count towards Soviet fulfillment of the minimum purchase
requirements (using appropriate coefficients). In the case
of rice and soybean meal, the United States should, if the
Soviets show any interest, seek the establishment of separate
basic purchase levels for these commodities.
CONFIDENTIAL
57
9
CONFIDENTIA
Commodities outside the grain and feed sphere (a
considerable number -- including poultry, beef, and tobacco
-- have been suggested) should not be considered in the text
of a new LTA. However, the United States should explore the
possibility of formulating a non-binding side letter
encouraging the expansion of U.S.-USSR agricultural trade,
which might specify some of these commodities.
Any efforts to promote the export of other U.S.
commodities should not be done at the expense of marketing
opportunities for U.S. wheat and corn.
B. Spacing Provisions
Article III of the current LTA calls upon the USSR to
space grain purchases and shipments as evenly as possible.
While we have no problem with this provision, with the
improvements in our monitoring system, it is no longer
?
necessary. The U.S. could trade this away if the Soviets
seek to eliminate it.
C. Destination
Article IV of the current LTA provides that, unless
otherwise agreed, wheat and corn purchased under the
CONFIDENTIAL
58
10
CONFIDENTIAL
agreement shall be consumed in the USSR. The U.S. should
seek to retain this provision unchanged.
D. Procedures for Additional Purchases
The procedures set forth in Article VI of the current
LTA should be maintained without change.
E. Consultations
Retain semi-annual consultations as at present (Article
VIII of the current LTA). The United States should also push
for wording providing for additional information sharing.
The Soviets have typically been uncooperative in providing
information on crop prospects and product availability; this
attitude is not likely to change in the near future.
However, the United States may want to make use of this issue
to put the Soviets on the defensive.
F. Maritime Agreement Reference
The language of Article VII of the current LTA, which
states only that the LTA should be in accord with the
American-Soviet Maritime Agreement, should be retained as is.
USG should not open it for discussion as the existing
sanction precludes discussion at the present time. The
CONFIDENTIAL
11
CONFIDENTIAL
present language covers the situation when no agreement
exists. We should reject any Soviet efforts to negotiate a
maritime agreement in the context of the LTA. (However,
pressure to lift the Poland sanction suspending maritime
negotiations may arise from the U.S. industry, and the
Soviets themselves may raise the question of a new maritime
agreement. Either could necesitate a separate review of the
issue of negotiating a new maritime agreement.)
L. Calendar Year/Fiscal Year
While the United States prefers to maintain the
October/September year, we can accept either.
M. Credit/Countertrade
The United States cannot accept any provisions relating
to credit or countertrade. Credit must be arranged by the
Soviet government with the private sector.
OUNT IDENTIAL
ATTACHMENT #
60
January 1, 1981, except as otherwise provided for in Article II, of a
total quantity of at least 6 to 8 million metric tons of United States
wheat and com, of which approximately 15 to 20 percent will be corn.
2. The Government of the People's Republic of China agrees to
purchase for shipment during each 12-month period beginning January 1,
1981, except as otherwise provided for in Article II, a total quantity
of at least 6 to 8 million metric tons of United States wheat and com,
of which approximately 15 to 20 percent will be corn.
3. Purchases/sales of wheat and com under this agreement will be
made at market prices prevailing at the time of purchase/sale and in
accordance with normal commercial terms.
ARTICLE II
1. The Government of the United States of America shall endeavor
to assure the availability of wheat and corn supplies through advance
planning of production and stockbuilding fully to meet the import re-
quirements of the People's Republic of China under the provisions of
this agreement. If by virtue of exceptional circumstances necessitating
the application of measures limiting the availability of United States
wheat and corn in respect to all foreign purchasers of United States
grain, it becomes necessary in a particular year to supply less than
the quantities specified in Article I, there shall be prior consulta-
tions between the two parties as to the amount of such adjustment.
Any such measure which shall be applied to the exports of United States
wheat and com to the People's Republic of China shall be carried out
on a basis no less favorable than to such exports to other forcign pur-
chasers of United States grain.
2. If by virtue of exceptional circumstances making it impossible
for the People's Republic of China to accommodate available supplies
necessitating the reduction of minimum levels of normal imports from
all foreign suppliers it becomes necessary in a particular year to pur-
chase less than the quantities specified in Article I, there shall be
prior consultations between the two parties as to the amount of such
adjustment. Any such reduction of imports of United States wheat and
corn which shall be applied to imports from the United States shall be
carried out on a basis no less favorable than to imports from other
foreign suppliers.
ARTICLE III
The United States of America expects to supply to the People's
Republic of China and encourages the People's Republic of China to
meet increased import requirements by purchases of wheat and corn from
the United States. Therefore, if during the period that the agreement
is in force, the People's Republic of China intends to purchase quanti-
ties of United States wheat and corn in excess of the 8 million metric
tons specified in Article I by more than 1 million metric tons, there
shall be prior notice to the Government of the United States of America.
The Government of the United States of America shall promptly inform
TAB A
TREATIES AND OTHER INTERNATIONAL ACTS series 8206
GRAINS AGREEMENT
Between the
UNITED STATES OF AMERICA
and the UNION OF SOVIET
SOCIALIST REPUBLICS
Signed at Moscow October 20, 1975
UNITED DEPARTMENT STATES OF STATE
OF
NOTE BY THE DEPARTMENT OF STATE
Pursuant to Public Law 89-497, approved
July 8, 1966 (80 Stat. 271; 1 U.S.C. 113)-
the Treaties and Other International Acts
Series issued under the authority of the Secretary of
UNION OF SOVIET SOCIALIST REPUBLICS
State shall be competent evidence
...
of the treatles,
international agreements other than treaties, and proc-
Grains Agreement
lamations by the President of such treatles and Inter-
national agreements other than treaties, as the case
may be, therein contained, In all the courts of law
Signed at Moscow October 20, 1975;
and equity and of maritime jurisdiction, and In all the
Entered into force October 20, 1975.
tribunals and public offices of the United States, and
of the several States, without any further proof or
authentication thereof."
For sale by the Superintendent of Documents, U.S. Government Printing Office,
Washington, D.C. 20402. Subscription Price: $27 per year; $6.75 additional
for foreign mailing. Single copies vary in price. This issue 35 cents.
AGREEMENT BETWEEN
The foreign trade organizations of the USSR may increase this
THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND
THE GOVERNMENT OF THE UNION OF SOVIET SOCIALIST REPUBLICS
quantity without consultations by up to two million metric tons in
ON THE SUPPLY OF GRAIN
any twelve month period, beginning October 1, 1976 unless the
Government of the USA determines that the USA has a grain supply of
The Government of the United States of America ("USA") and the
less than 225 million metric tons as defined in Article
Government of the Union of Soviet Socialist Republics ("USSR")
Purchases/sales of wheat and corn under this Agreement will be
Recalling the "Basic Principles of Relations Between the
made at the market price prevailing for these products at the time
United States of America and the Union of Soviet Socialist Republics"
of May 29, 1972;
[1]
of purchase/sale and in accordance with normal commercial terms.
Desiring to strengthen long-term cooperation between the two
ARTICLE II
countries on the basis of mutual benefit and equality;
During the term of this Agreement, except as otherwise agreed
Mindful of the importance which the production of food, parti-
by the Parties, the Government of the USA shall not exercise any
cularly grain, has for the peoples of both countries;
discretionary authority available to it under United States law to
Recognizing the need to stabilize trade in grain between the
control exports of wheat and corn purchased for supply to the USSR
two countries;
in accordance with Article I.
Affirming their conviction that cooperation in the field of
ARTICLE III
trade will contribute to overall improvement of relations between
In carrying out their obligations under this Agreement, the
the two countries;
foreign trade organizations of the USSR shall endeavor to space their
Have agreed as follows:
purchases in the USA and shipments to the USSR as evenly as possible
ARTICLE I
over each 12-month period.
The Government of the USA and the Government of the USSR hereby
ARTICLE IV
enter into an Agreement for the purchase and sale of wheat and corn
The Government of the USSR shall assure that, except as the
for supply to the USSR. To this end, during the period that this
Parties may otherwise agree, all wheat and corn grown in the USA and
Agreement is in force, except as otherwise agreed by the Parties,
purchased by foreign trade organizations of the USSR shall be supplied
(1) the foreign trade organizations of the USSR shall purchase from
for consumption in the USSR.
private commercial sources, for shipment in each twelve month period
beginning October 1, 1976, six million metric tons of wheat and corn,
ARTICLE V
in approximately equal proportions, grown in the USA; and (ii) the
In any year this Agreement is in force when the total grain
Government of the USA shall employ its good offices to facilitate
supply in the USA, defined as the official United States Department
and encourage such sales by private commercial sources.
of Agriculture estimates of the carry-in stocks of grain plus the
official United States Department of Agriculture forward crop
1 Department of State Bulletin, June 26, 1972, p. 898.
TIAS 8206
TIAS 8206
4
5
estimates for the coming crop year, falls below 225 million metric
ARTICLE IX
tons of all grains, the Government of the USA may reduce the quantity.
This Agreement shall enter into force on execution and shall
of wheat and corn available for purchase by foreign trade organiza-
remain in force until September 30, 1981 unless extended for a
tions of the USSR under Article I(1).
mutually agreed period.
ARTICLE VI
Whenever the Government of the USSR wishes the foreign trade
DONE at Moscow, this 20th day of Ostober, 1975,
organizations of the USSR to be able to purchase more wheat or corn
in duplicate, in the English and Russian languages, both texts
grown in the USA than the amounts specified in Article I, it shall
being equally authentic.
immediately notify the Government of the USA.
Whenever the Government of the USA wishes private commercial
sources to be able to sell more wheat or corn grown in the USA
FOR THE GOVERNMENT OF THE
FOR THE GOVERNMENT OF THE UNION
than the amounts specified in Article I, it shall immediately notify
UNITED STATES OF AMERICA:
OF SOVIET SOCIALIST REPUBLICS:
charles w Puline [1]
[*]
the Government of the USSR.
In both instances, the Parties will consult as soon as possible
[SEAL]
[SEAL]
in order to reach agreement on possible quantities of grain to be
supplied to the USSR prior to purchase/sale or conclusion of con-
tracts for the purchase/sale of grain in amounts above those
specified in Article I.
1 Charles W. Robinson
N. Patolichev
ARTICLE VII
It is understood that the shipment of wheat and corn from the
USA to the USSR under this Agreement shall be in accord with the
[1]
provisions of the American-Soviet Agreement on Maritime Matters which
is in force during the period of shipments hereunder.
ARTICLE VIII
The Parties shall hold consultations concerning the implementation
of this Agreement and related matters at intervals of six months
beginning six months after the date of entry into force of this
Agreement, and at any other time at the request of either Party.
TIAS 8195; 26 UST.
TIAS 8206
6
7
ССГЛАШЕНИЕ
2.
Правительством между Правительством Соединенных Штатов Америки и
Республик o поставках 3epHa
Союза Советских Социалистических
Закупки-продажи пшеницы и кукурузы по настоящему Соглашению
будут осуществляться по рыночным ценам, преобладающим Ha время
закупки-продажи и B соответствии c обычными коммерческими условиями
Статья П
Правительство Соединенных Штатов Америки и
Правительство Союза Советских Социалистических Республик,
B течение cpoKa действия настоящего Соглашения, 3a исключе-
нием случаев иной договоренности CTopoH, Правительство США He будет
Америки H Союзом Советских Социалистических Республик oT
исходя из OcHoB взаимоотношений между Соединенными Штатами
пользоваться какими-либо диспозитивными полномочиями согласно 3aKo-
29 мая I972 года,
HaM США для установления контроля над экспортом пшеницы и кукурузы,
закупленных для поставки B CCCP B соответствии CO статьей I.
странами Ha базе взаимной выгоды и paBeHcTBa,
желая укреплять долгосрочное сотрудничество между двумя
Статья III
учитывая важность производства продуктов питания и, B част-
При выполнении обязательств по настоящему Соглашению внешне-
ности, 3epHa для народов обеих cTpaH,
торговые организации CCCP будут стараться осуществлять свои закуп-
признавая необходимость стабилизации торговли 3epHoM между
ки B США и отгрузки B CCCP KaK можно равномерней B течение каждого
обеими странами,
I2-месячного периода.
подтверждая cBoe убеждение B ToM, что сотрудничество
между обеими странами,
области торговли будет содействовать общему улучшению отношений B
Статья IV
Правительство CCCP заверяет, что, 3a исключением случаев
согласились 0 нижеследующем:
иной договоренности CTopoH, вся пшеница и KyKypy3a, выращенные B
США и закупленные внешнеторговыми организациями CCCP, будут постав-
Статья I
ляться для потребления B CCCP.
Соглашение CCCP. 0 закупке и продаже пшеницы и кукурузы заключают
Правительство США и Правительство CCCP настоящим
Статья y
Если B любой год действия настоящего Соглашения общие ресурсы
B B этих целях B течение cpoKa действия настоящего для поставки Согла-
3epHa B CIIIA, определяемые по официальной оценке Министерства сель-
шения, (I) 3a исключением случаев иной договоренности
cKoΓo хозяйства США, исходя из запасов плюс предварительные прогно-
ских внешнеторговые организации CCCP закупят y частных CTopoH:
зы урожая Ha текущий сельскохозяйственный год, окажутся ниже
фирм c отгрузкой B течение каждого I2-месячного коммерче-
225 миллионов метрических ToHH 3epHa Bcex видов, Правительство США
пшеницы начиная c I октября 1976 года, по 6 миллионов метрических периода,
может уменьшить количества пшеницы и кукурузы, которые внешнеторго-
и кукурузы, примерно B paBHoM соотношении, ToHH
вые организации CCCP MoΓyT закупать согласно статье I.(I).
B США; (2) Правительство США будет доступными eму выращенных
Статья УІ
фирмами. содействовать и поощрять такие запродажи частными коммерческими средствами
B случае, всли Правительство CCCP пожелает, чтобы внешне-
без Внешнеторговые организации CCCP MoΓyT увеличить эти
торговые организации CCCP имели возможность закупить большие коли-
B cTBa любой консультаций B pa3Mepax до 2 миллионов количе-
чества пшеницы или кукурузы, выращенные B США, чем количества, yKa-
Ӏ2-месячный период, начиная c I октября метрических I976 ToHH
занные B статье I, oHo незамедлительно сообщит об этом Правительс-
Правительство США He определит, что США имеют зерновые года, если
TBy США.
определено B статье y.
количествах, «меньших чем 225 миллионов метрических ToHH, ресурсы KaK это B
TIAS 8206
8
B случе, если Правительство США пожелает, чтобы частные
коммерческие фирмы имели возможность продать B CCCP пшеницу или
KyKypy3y, выращенные B США, cBepx количеств, указанных B статье I,
oHo незамедлительно сообщит об этом Правительству CCCP.
B обоих случаях до закупки-продажи или заключения KoHTpaKToB
Ha закупку-продажу 3epHa cBepx количеств, указанных B статье I,
Стороны B возможно короткий cpoK проведут консультации для дости-
жения договоренности 0 возможных объемах закупки-продажи 3epHa
для поставки B CCCP.
Статья УП
Понимается, что при перевозках пшеницы и кукурузы из США B
CCCP будут применяться положения американо-советского соглашения
no вопросам MopcKoΓo судоходства, KoTopoe будет действовать B
период перевозки 3epHa по настоящему Соглашению.
Статья УШ
Стороны будут проводить консультации по выполнению настоящего
Соглашения и связанным c ним вопросам каждые 6 месяцев, начав их
через 6 месяцев после вступления B силу настоящего Соглашения, a
также B любое другое время по требованию каждой из CTopoH.
Статья IX
Настоящее Соглашение вступает B силу B день ero подписания и
будет действовать до 30 сентября 1981 года, если no согласию CTo-
poH oHo He будет продлено Hu дополнитсльный, взаимно согласован-
ный период.
Совершено B MocKBe 20n октября 1975 года B двух экземплярах,
каждый Ha английском и pyccHoM языках, причем оба TeKcTa имеют
одинаковую силу.
3a Правительство
3a Правительство Союза
Соединенных Штатов Америки
Советских Социалистических
chances W Rolin
Республик
[SEAL]
[SEAL]
CONFIDENTIAL
5554
File ussr Grain &
69
MEMORANDUM
NATIONAL SECURITY COUNCIL
RR
CONFIDENTIAL
July 18, 1984
INFORMATION
MATLOCK
MEMORANDUM FOR ROBERT C. McFARLANE
FROM:
JACK MATLOCK fin
SUBJECT:
Soviet Grain Purchases
According to Agriculture's figures the Soviets have now purchased
a total of 12,357,800 tons of grain for delivery in the crop year
ending September 30, 1984. These purchases were almost equally
divided between wheat and corn (6.3 and 6.05 million tons,
respectively). In addition, the Soviets have purchased 416,200
tons of soybeans.
Regarding the crop year beginning October 1, 1984, the Soviets
purchased 350,000 tons of corn yesterday and there are rumors
that they will make substantial purchases of grain (1 to 3
million tons) within the next few days. They are obligated to
buy at least 9 million tons of grain in each crop year.
DECLASSIFIED
CONFIDENTIAL
NLRR F06-114/8 # 10070
Declassify on: OADR
BY LOS NARA DATE 9/30/08
CONFIDENTIAL
70
5554
MEMORANDUM
NATIONAL SECURITY COUNCIL
CONFIDENTIAL
July 18, 1984
INFORMATION
MEMORANDUM FOR ROBERT C. McFARLANE
FROM:
JACK MATLOCK $5m
SUBJECT:
Soviet Grain Purchases
According to Agriculture's figures the Soviets have now purchased
a total of 12,357,800 tons of grain for delivery in the crop year
ending September 30, 1984. These purchases were almost equally
divided between wheat and corn (6.3 and 6.05 million tons,
respectively). In addition, the Soviets have purchased 416,200
tons of soybeans.
Regarding the crop year beginning October 1, 1984, the Soviets
purchased 350,000 tons of corn yesterday and there are rumors
that they will make substantial purchases of grain (1 to 3
million tons) within the next few days. They are obligated to
buy at least 9 million tons of grain in each crop year.
DECLASSIFIED
NLRR F06-114/8#10071
BY nos NARA DATE 9/30/08
CONFIDENTIAL
Declassi fy on: OADR
CONFIDENTIAL
71
MEMORANDUM
THE Jack
SITUATION ROOM NOTE
WASHINGTON WHITE What HOUSE n1 the
17, 1984 now!
CONFIDENTIAL
FOIA(b) (1), (3)
Soviet Purchase of U.S. Grain
the USSR purchased approximately one million metric
tons (MT) of U.S. hard red winter wheat following seven days of
negotiating. Half of the wheat is to be shipped from October to
December while the remainder is tentatively scheduled for January
to February shipment. The Soviets paid cash.
The Soviets also purchased approximately 850,000 MT of
U.S. corn earlier in the month with shipment scheduled
for October to December. Half of this purchase is being
financed by a U.S. firm.
During recent negotiations the Soviets also expressed
interest in the purchase of 150,000 MT of U.S. barley
for October to November delivery. (C)
CONFIDENTIAL
CLASSIFIED BY CIA
DECLASSIFY ON: OADR
DECLASSIFIED IN PART
NLRR FD6-114/8410072
CONFIDENTIAL
BY RW NARA DATE 3/16/11
12
July 18, 1984
about noon
MESSAGE FROM LYNN PESCOE FOR JACK MATLOCK
1.
Soviet purchase of U.S. grain for 1983/1984,
i.e., October 1, 1983 - September 30, 1984:
Wheat
6,307,300 tons
Corn
6,050,500 tons
Total
12,357,800 tons
They have also purchased 416,200 tons of soybeans.
2.
For 1984/1985, i.e., October 1, 1984 - September 30, 1985:
Yesterday they purchased 350,000 tons of corn and there are
many rumors they they will buy one - three million tons od
grain in the next few days.
3.
For the year July 1, 1984 - June 30, 1985, estimates are
that they will purchase 35 - 40 million tons of grain.
Twenty million of that is covered in various long-term grain
agreements, including ours.
fl
UNCLASSIFIED
US-USSR
73
NATIONAL SECURITY COUNCIL
Grain
MESSAGE CENTER
PAGE 01 OF 02 SECSTATE WASHDC 3681
DTG: 292218Z JUL 83 PSN: 071379
E0B997
AN006284
TOR: 211/0054Z
CSN: HCE514
Q: HOW IS THE AGREEMENT RELATED TO THE SITUATION IN
DISTRIBUTION: CHLD-01 BALY-01 FORT-01 REIS-01 MYER-01 DOBR-01
POLAND? DOES IT HAVE ANYTHING TO DO WITH THE LIFTING
SIGU-01 KRAM-01 LEVN-01 LAUX-01 SOMM-01 MART-01
OF MARTIAL LAW?
LINH-01 ROBN-01 MINN-01 CEA-01 LENC-01
/017 A2
A: THE US OFFERED TO NEGOTIATE A NEW GRAIN AGREEMENT
WITH THE SOVIET UNION IN APRIL, WELL BEFORE THE RECENT
DEVELOPMENTS IN POLAND. THE DECISION WAS BASED ON OUR
WHTS ASSIGNED DISTRIBUTION:
VIEW THAT GRAIN SALES TO THE USSR CAN BEST TAKE PLACE
SIT:
UNDER THE FRAMEWORK OF A LONG-TERM AGREEMENT.
EOB:
Q: WHAT WILL THE ALLIES SAY ABOUT THIS EXPANDED
AGREEMENT IN LIGHT OF OUR EFFORTS TO REACH A NEW
CONSENSUS ON EAST-WEST TRADE WITH THEM?
OP IMMED
DE RUEHC #3681 2110037
A: THE NEGOTIATION OF THE AGREEMENT IN NO WAY CONTRADICTS
0 292218Z JUL 83 ZEX
THE THRUST OF THE ECONOMIC POLICY TOWARD THE USSR WE ARE
FM SECSTATE WASHDC
PURSUING WITH THE ALLIES. OUR GRAIN SALES ARE ON
COMMERCIAL TERMS AND ARE NOT MADE WITH GOVERNMENT SUPPORT-
TO ALL OECD CAPITALS IMMEDIATE
ED CREDITS OR GUARANTEES. A NEW AGREEMENT WILL PROVIDE A
AMEMBASSY BEIJING IMMEDIATE 0000
STRUCTURE TO MANAGE THE US-SOVIET GRAIN TRADE. THE ALLIES
AMEMBASSY MOSCOW IMMEDIATE 0000
HAVE ALSO MAINTAINED THEIR GRAIN RELATIONSHIPS WITH THE
AMEMBASSY BRASILIA IMMEDIATE 0000
USSR. CANADA HAS A LONG-TERM AGREEMENT AND FRANCE HAS AN
AMEMBASSY BUENOS AIRES IMMEDIATE 0000
AGRICULTURAL SALES UNDERSTANDING WITH THE USSR AS WELL.
AMCONSUL LENINGRAD IMMEDIATE 0000
Q: NOW THAT WE HAVE A NEW GRAIN AGREEMENT WILL WE BEGIN
INFO AMEMBASSY BELGRADE IMMEDIATE 0000
MARITIME AGREEMENT NEGOTIATIONS?
AMEMBASSY BERLIN IMMEDIATE 0000
AMEMBASSY BUCHAREST IMMEDIATE 0000
A: NEGOTIATIONS ON A NEW MARITIME AGREEMENT WERE
AMEMBASSY BUDAPEST IMMEDIATE 0000
SUSPENDED IN DECEMBER 1981. THE SUSPENSION REMAINS IN
AMEMBASSY PRAGUE IMMEDIATE 0000
EFFECT.
AMEMBASSY SOFIA IMMEDIATE 0000
USMISSION USNATO IMMEDIATE 0000
Q: HOW WILL THIS AGREEMENT AFFECT OUR SHARE OF THE SOVIET
AMEMBASSY WARSAW IMMEDIATE 0000
GRAIN MARKET? WILL WE REGAIN THE SHARE WE LOST AS A RESULT
OF THE PARTIAL GRAIN EMBARGO?
UNCLAS STATE 213681
A: PRIOR TO THE GRAIN EMBARGO THE US HAD ROUGHLY A 70
PASS PAO'S
E 0. 12356: OADR
SHARE OF OF THE SOVIET MARKET. IT APPEARS WE WILL NOT
TAGS EAGR
REGAIN THAT POSITION WITH THIS NEW AGREEMENT. WHAT OUR
SUBJECT: NEW US-SOVIET GRAIN AGREEMENT
SHARE WILL BE DEPENDS ON TOTAL SOVIET GRAIN PURCHASES;
IF THEIR PURCHASES TOTAL 30 MILLION TONS, FOR INSTANCE,
1. FOLLOWING IS THE GUIDANCE ON THE NEW US-SOVIET GRAIN
OUR GUARANTEED SHARE WILL BE ALMOST 30 PERCENT INSTEAD
AGREEMENT PREPARED FOR THE STATE DEPARTMENT PRESS SPOKES-
OF 20 PERCENT UNDER THE CURRENT LTA.
MAN JULY 29:
Q: WHAT IS THE DOLLAR VALUE OF THE NEW AGREEMENT?
Q: WHAT ARE THE TERMS OF THE NEW US-SOVIET GRAIN AGREE-
MENT NEGOTIATED IN VIENNA?
A: WE CANNOT CALCULATE THE DOLLAR VALUE OF THE NEW
AGREEMENT WITHOUT KNOWING WHAT GRAIN PRICES WILL BE IN
A: AS ANNOUNCED BY SECRETARY BLOCK AND AMBASSADOR BROCK
THE COMING 5 YEARS. ONE WAY TO CALCULATE THE ANNUAL
JULY 28, UNDER THE NEW AGREEMENT THE USSR WILL PURCHASE
VALUE WOULD BE TO MULTIPLY THE ADDITIONAL MINIMUM OF 3
AT LEAST 9 MILLION TONS OF WHEAT AND CORN ANNUALLY FROM
MILLION TONS BY A PROJECTED GRAIN PRICE, BUT I HESITIATE
THE US, WITH THE OPTION TO SUBSTITUTE 500,000 TONS OF
TO SPECULATE TO THAT EXTENT.
SOYBEANS OR SOYBEAN MEAL FOR ONE MILLION TONS OF GRAIN.
THE SOVIETS MAY PURCHASE UP TO 12 MILLION TONS ANNUALLY
Q: BY SELLING GRAIN TO THE USSR, AREN'T WE JUST
WITHOUT FURTHER CONSULTATIONS WITH THE USG. THESE NEW
FEEDING SOVIET SOLDIERS?
AMOUNTS COMPARE TO A MINIMUM OF 6 MILLION TONS AND AN
OPTIONAL LEVEL OF 8 MILLION TONS UNDER THE ORIGINAL
A: THE US IS ONE OF SEVERAL SUPPLIERS OF GRAIN TO
1975 AGREEMENT. THE GENERAL FRAMEWORK OF THE NEW
THE SOVIET UNION. THIS YEAR OUR MARKET SHARE IS
AGREEMENT FOLLOWS THAT OFTHE ORIGINAL.
ROUGHLY 20 PERCENT COMPARED TO 70 PERCENT BEFORE THE
1980/81 PARTIAL GRAIN EMBARGO. AS THE PARTIAL EMBARGO
Q: WHY ARE WE PROMISING TO SELL THE SOVIETS MORE GRAIN
DEMONSTRATES, IF THE US DIDN'T SELL GRAIN TO THE
WHEN OUR CORN CROP MAY BE REDUCED DUE TO HOT, DRY WEATHER?
SOVIETS, THEY WOULD TURN TO OTHER EXPORTERS TO FILL
THE GAP.
A: FOR AN ANALYSIS OF THE STATE OF THE CORN CROP, I MUST
REFER YOU TO USDA. HOWEVER, WE UNDERSTAND THAT EVEN
GRAIN IMPORTS ENABLE THE SOVIET UNION TO MAINTAIN
AFTER THE PAYMENT-IN-KIND PROGRAM, THE US HAS LARGE
THE POLITICALLY IMPORTANT LIVESTOCK SECTOR, BUT
STOCKS OF CORN AND THAT TOTAL SUPPLIES WILL BE AMPLE TO
ARE NOT NECESSARY TO PROVIDE THE POPULATION WITH
MEET ALL OUR DOMESTIC NEEDS AND EXPORT DEMAND.
A MINIMUM DIET. EVEN IN YEARS OF POOR HARVEST
UNCLASSIFIED
UNCLASSIFIED
74
NATIONAL SECURITY COUNCIL
MESSAGE CENTER
PAGE 02 OF 02 SECSTATE WASHDC 3681
DTG: 292218Z JUL 83 PSN: 071379
THE SOVIET UNION IS THE WORLD'S LARGEST PRODUCER
OF WHEAT.
IT IS NOT US POLICY TO CONDUCT ECONOMIC WARFARE
AGAINST THE SOVIET UNION. WE SUPPORT MUTUALLY
ADVANTAGEOUS, UNSUBSIDIZED TRADE WITH THE USSR.
Q: IS THE US GOVERNMENT SENDING A POLITICAL SIGNAL
TO THE SOVIET UNION BY APPROVING THIS NEW AGREEMENT?
A: THE SIGNAL WE HAVE SENT ALL ALONG IS THAT AS PART
OF OUR STRONG, REALISTIC APPROACH TO THE USSR UNDER
THIS ADMINISTRATION, WE WANT TO EXPLORE WITH THE
SOVIETS THOSE AREAS WHERE THE TWO COUNTRIES CAN
COOPERATE TO MUTUAL BENEFIT, AND TO MAKE AGREEMENTS ON
THAT BASIS. GRAINS IS-ONE SUCH AREA. THIS ACCORD WAS
REACHED BECAUSE IT HAS MUTUAL ECONOMIC BENEFITS FOR
BOTH SIDES.
Q: IS THIS ACCORD A "FIRST STEP" TOWARDS NORMALIZING
US-SOVIET RELATIONS? WHAT DOES IT PORTEND FOR THE
ARMS NEGOTIATIONS?
A: THERE ARE SERIOUS DIFFERENCES BETWEEN THE US AND
THE SOVIET UNION WHICH WILL NOT BE OVERCOME BY AGREE-
MENTS OF THIS SORT. MOST OF OUR BILATERAL COOPERATIVE
AGREEMENTS WITH THE SOVIETS HAVE BEEN RENEWED OR
EXTENDED AS THEY EXPIRED; WHERE THIS DID NOT HAPPEN,
IT WAS AS A SANCTION AGAINST SOVIET INTERNATIONAL
MISCONDUCT; AND EXCEPT WHERE THESE SANCTIONS HAVE
BECOME OUTMODED, AS IN THIS CASE, THE PROGRAM REMAINS
IN EFFECT. WE REMAIN CONCERNED ABOUT THE USSR'S
BEHAVIOR--INCLUDING ITS MILITARY BUILDUP, ITS
GEOPOLITICAL EXPANSIONISM AND ITS RECORD OF HUMAN
RIGHTS VIOLATIONS--AND WILL CONTINUE TO MAKE CLEAR TO
THE SOVIETS THAT THERE CAN BE NO BASIC IMPROVEMENT IN
THE RELATIONSHIP UNTIL THEY ARE RESPONSIVE TO OUR
CONCERNS ACROSS A BROAD FRONT. THE AGENDA INCLUDES
HUMAN RIGHTS, ARMS CONTROL AND REGIONAL ISSUES AS WELL
AS BILATERAL ISSUES LIKE TRADE. WE ARE NOT STEPPING
BACK FROM OUR STRONG POLICY OPPOSING SOVIET MISBEHAVIOR.
WE WELCOME THIS AGREEMENT AS A SMALL, POSITIVE
STEP OF BENEFIT TO BOTH SIDES, BUT WE DO NOT YET SEE
ANY CHANGE IN SOVIET BEHAVIOR OVERALL, NOR DO WE SEE
HOW THE AGREEMENT HAS ANY IMPLICATIONS FOR THE ARMS
CONTROL TALKS IN GENEVA.
Q: HOW CAN WE FEED THE SOVIET UNION AT THE SAME TIME
WE ARE CONDEMNING THEIR MEDDLING IN CENTRAL AMERICA?
A: THE ADMINISTRATION'S POSITION ON CENTRAL AMERICA
IS WELL KNOWN, AND THE SOVIETS HAVE BEEN WELL AWARE OF
OUR STRONG VIEWS CONCERNING THEIR APPROACH TO THE
TENSIONS IN THAT AREA. I WILL NOT GET INTO THE
SUBSTANCE OF OUR DIPLOMATIC EXCHANGES ON THIS TOPIC.
BUT WE DO NOT FEEL THAT SIGNING THIS AGREEMENT COULD
AFFECT THE SITUATION IN CENTRAL AMERICA ONE WAY OR THE
OTHER. GIVEN THE CURRENT OVERSUPPLY OF GRAIN ON WORLD
MARKETS, THE SOVIET UNION CAN PROCURE ALL THE GRAIN
IT NEEDS FROM OTHER SOURCES. THE ONLY PEOPLE WE
WOULD PUNISH BY NOT SELLING GRAIN TO THE SOVIETS WOULD
BE AMERICAN FARMERS. SHULTZ
BT
UNCLASSIFIED
74
SECRET
NATIONAL SECURITY COUNCIL
MESSAGE CENTER
PAGE 01 OF 02 VIENNA 9204
DTG: 281619Z JUL 83 PSN: 068882
EOB828
AN005419
TOR: 209/1733Z
CSN: HCE892
DISTRIBUTION: BALY-01 FORT-01 MYER-01 DOBR-01 LEVN-01 SOMM-01
ROBN-01 MINN-01 STER-01 LENC-01 /010 A2
N
WHSR COMMENT: CHECKLIST
0
WHTS ASSIGNED DISTRIBUTION:
D
SIT: CKLS EOB
EOB:
S
OP IMMED
STU6834
DE RUEHVI #9204 2091619
O 281619Z JUL 83
FM AMEMBASSY VIENNA
N
TO SECSTATE WASHDC IMMEDIATE 2615
FILE
0
E C R E T VIENNA 09204
D
NODIS
FOR THE SECRETARY
S
DEPT. PASS ELECTRONICALLY ONLY TO USTR AMBASSADOR BROCK;
USDA BLOCK, NSC MR. MC FARLANE AND WHITE HOUSE MR.
HARPER
E.O. 12356: N/A
TAGS: ECON, UR, US
SUBJECT: US-SOVIET NEGOTIATIDNS ON NEW LONG TERM GRAINS
AGREEMENT
N
1. US AND SOVIET DELEGATIONS HAVE REACHED AGREEMENT IN
0
DRAFT ON A NEW 5 YEAR LTA WHICH PROVIDES FOR A 9 PERCENT
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INCREASE IN THE SOVIET MINIMUM PURCHASE LEVEL TO 9
MILLION METRIC TONS PER ANNUM. AT SOVIET OPTION, UP TO
MILLION TONS OF THE MINIMUM COULD BE SATISFIED BY
PURCHASES OF UP TO 500, 000 TONS OF SOYBEANS AND/OR
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MEAL. AT LEAST 8 MILLION TONS MUST BE WHEAT AND CORN.
PURCHASES OF CORN AND WHEAT MUST BE IN APPROXIMATELY
EQUAL PROPORATION. THE NEW MAXIMUM IS 12. (THE RANGE IN
THE CURRENT AGREEMENT IS 6-8.) NO DELIVERY ASSURANCES
DECLASSIFIED
NLRR F06-114/8# 10076
WERE GIVEN BEYDND THOSE CONTAINED IN ARTICLE 2 OF THE
PRESENT LTA. THE BALANCE OF THE AGREEMENT REMAINS
LARGELY UNCHANGED. THE SHORT SUPPLY PROVISION,
BY not NARA DATE 9/30/08
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HOWEVER, WAS DROPPED IN VIEW OF THE ADMINISTRATION
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POLICY ON THIS ISSUE AND THE DURENBURGER AMENDMENT. ALSO
AN ARTICLE WAS ADDED RELATING TO USG ' GOOD OFFICES" IN
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DEALING WITH ISSUES RELATED TO QUALITY OF GRAINS.
2. THE DRAFT AGREEMENT ACHIEVES OUR KEY OBJECTIVES OF A
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SUBSTANTIAL INCREASE IN THE MINIMUM PURCHASE LEVEL,
AVOIDING "PREFERENTIAL" TREATMENT OF THE USSR, AND
MAINTAINING THE BASIC FRAMEWORK OF THE PRESENT
agreement. THE NEGOTIATIONS WERE FRANK, BUSINESSLIKE
AND OCCASSIONALLY DIFFICULT. THE SOVIETS, HOWEVER,
EXPRESSED THEIR DESIRE AT THE OUTSET TO REACH AGREEMENT
IN VIENNA AND AGREED TO INCREASE THE MINIMUM EVEN THOUGH
THEY HAD ARGUED DURING THE DISCUSSIONS THAT RAISING THE
MINIMUM TO 9 WOULD CAUSE THEM DIFFICULTIES WITH OTHER
SUPPLIERS. IN THIS CONNECTION THE SOVIETS STATED THEIR
HOPE THIS INCREASED GRAIN TRADE WOULD CONTRIBUTE NOT ONLY
TO ECONOMIC RELATIONS BUT TO OVERALL RELATIONS AS WELL.
CLEARLY, THE SOVIETS PLACE GREAT ECONOMIC VALUE ON AN
LTA WITH THE U.S. AS AN ASSURED SOURCE OF SUPPLY. THEIR
WILLINGNESS TO AGREE TO A MINIMUM OF NINE NOW, AFTER
ARGUING THROUGH 2 PREVIOUS SESSIONS THE HIGHEST THEY
COULD ACCEPT WAS 6, SUGGESTS A PDLITICAL DECISION WAS
MADE TO DEMONSTRATE WE CAN REACH agreement ON AN ISSUE OF
MUTAL BENEFIT DESPITE OUR DIFFERENCES ON OTHER
SEPRET
SECRET
NATIONAL SECURITY COUNCIL
MESSAGE CENTER
PAGE 02 OF 02 VIENNA 9204
DTG: 281619Z JUL 83 PSN: Ø68882
OUTSTANDING ISSUES.
3. THE DRAFT AGREEMENT IS subject TO FINAL REVIEW BY
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GOVERNMENTS DN THE BASIS THAT ANY CHANGES WILL BE
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NON-SUBSTANTIVE. VON DAMM
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SERRET