In its findings in consideration of the Export Trading Company
Act, Congress specifically addressed the needs of agricultural producers. The Title III requirements pose few
restrictions for agricultural producers who are or who wish to export. Consequently,
agricultural exporters can be creative in their use of the antitrust protection provided
by an Export Trade Certificate of Review. The definition of
person within the Act if broad enough to include not only traditional agricultural
exporters such as cooperatives but also trade associations and local or state government
agencies such as agricultural commissions.
Agricultural exporters have had a number of different activities certified under Title
III. Examples of certification have included discussion and sharing of export
market information including export prices, selling strategies, projected demand, as well
as information on export costs such as ocean freight, insurance, agent's commissions, and
export sales financing.
Most agricultural exporters who have received certification for joint activities have
organized an Export Trading Company (ETC) through which the certified activities are conducted. Typically the
ETC is the applicant for a Certificate of Review covering the desired joint ventures and
conduct. All the other participants in the joint venture are listed as members on
the certificate to ensure that they receive the antitrust protection afforded by the
II. Examples of Arrangements
Example 1 Producer with Outside Supply Agreements
In this example we consider a producer who exports their own products but that on occasion
contacts outside sources including its competitors to fill large orders. By obtaining
certification for such contacts the producer can eliminate any antitrust concerns that may
have been raised by dealing with its competitors.
Contacts by producer ETCs with their competition have typically been certified if the
ETCs enter into agreements with such competitors on a one-to-one basis. One
Certificate that has been issued enables a producer's affiliated ETC to act as an export
intermediary for several suppliers.
Example 2 Nonproducer ETC for Competing Producers
An example of this type of arrangement would be a group of producers that sell their
products on an exclusive to a nonproducer ETC. The ETC is then responsible for
marketing the products overseas. In one Certificate issued by Commerce the
nonproducing ETC was the applicant and a group of producer cooperatives the members.
Example 3 ETC Composed of Competing Producers
In this example a group of producers organize an ETC which is then used as the exporting
arm for the producers. The ETC applies for the Certificate while the producers
are the members of the Certificate.
Several Certificates following this model have been issued to agricultural producers.
In one certificate the producers certified collective selling of their products
through their ETC. In another the members had certified their joint efforts to over
come nontariff barriers in the Japanese market.
III. Cooperatives and Title III
The Capper-Volstead Act of 1922 (CVA) establishes the rights of agricultural producers
to act together in cooperative marketing associations. Under Capper-Volstead
cooperatives receive an limited antitrust exemption for their cooperative marketing
activities. An Export Trade Certificate of Review can provide cooperatives with
antitrust protection for certified export activities for which the applicability of the
Capper-Volstead protection is uncertain or that are explicitly not exempt from a under
1)The antitrust exemption provided by the Capper-Volstead Act is limited to activities
and agreements among producers. If the cooperative enters into combinations with
non-producers, the Capper-Volstead antitrust exemption will not apply. An Export
Trade Certificate of Review would provide antitrust protection for all certified export
activities of the cooperative including agreements with non-producers such as processors,
freight forwarders, and export intermediaries. Title III can thus be used to
protect an entire export arrangement.
2) Supplier cooperatives are not covered by Capper-Volstead Act, are eligible for and
can receive the antitrust protection afforded by an Export Trade Certificate of Review.
3) Typically the antitrust protection provided Capper-Volstead Act extends only the
members of an exempted cooperative. Non-members of the cooperative, even
agricultural producers, are not covered by the umbrella of protection Capper-Volstead
provides to the cooperative. Cooperative members can obtain Title III antitrust
protection for their activities with nonmembers of the cooperative and the protection can
be extended to the noncooperative firms.
4) Even cooperatives that have no uncertainty about the application of
Capper-Volstead to their activities can benefit from the procedural safeguards conveyed by
an Export Trade Certificate of Review.
A further discussion of agricultural uses of Title III is contained in the article, "Going Global", by Alan Borst.