Trade Rules

TRADE RULES

There are five sections to the full set of Trade Rules established and maintained by the NGFA:

  • Grain Trade Rules: Adopted in 1902, these rules govern all transactions of a financial, mercantile or commercial nature involving grain. Grain, as defined by the U.S. Grain Standards Act, means corn, wheat, rye, oats, barley, flaxseed, grain sorghum, soybeans, mixed grain and any other food grains, feed grains and oilseeds for which standards are established under 7 U.S.C. Section 76.
  • Feed Trade Rules: Adopted in 1921, these rules govern transactions of all feedstuffs (including mill products or byproducts). Users of these rules should note that references are made to American Association of Feed Control Officials (AAFCO) definitions.
  • Barge Trade Rules: Adopted in 1964, these rules supplement the Grain Trade Rules and Feed Trade Rules whenever such shipments are designated by contract to be transported by barge.
  • Barge Freight Trading Rules (affreightment): Adopted in 1981, these rules govern all disputes of a financial, mercantile or commercial character involving transactions in the purchase and/or sale of barge transportation.
  • Secondary Rail Freight Trading Rules: Adopted in 2007, these rules govern all disputes of a financial, mercantile or commercial character involving transactions between non-railroad parties in the purchase and/or sale of secondary rail freight transportation.
 

TRADE RULES COMMITTEE

The NGFA’s Trade Rules Committee formulates and recommends rule changes to the NGFA membership. Rules are proposed that reflect trade practice and facilitate trade between NGFA members specifically, as well as between all firms in the grain, feed and processing industry generally.

The Trade Rules Committee consists of four subcommittees – Grain Trade Rules, Feed Trade Rules, Barge Trade Rules and Barge Freight Trading Rules – with a general chairman and four subcommittee chairmen. The subcommittees annually or more frequently if needed, review the rules to ensure they reflect current trade practices.

Pursuant to the NGFA Bylaws, NGFA members receive 30 days’ notice of proposed changes to the Trade Rules. Approval is by a two-thirds majority vote of the membership at the annual business meeting. Amendments to the Trade Rules become effective 30 days after the date of adoption.

The NGFA Bylaws also provide that changes to the Trade Rules may be approved by the Board of Directors, subject to affirmation by the membership at the next annual meeting.

 

USE OF NGFA TRADE RULES AND ARBITRATION RULES FOR CROSS-BORDER TRANSACTIONS IN NORTH AMERICA

Increasingly, NGFA members reference the NGFA’s Trade Rules and Arbitration Rules in contracts with firms located in Mexico and Canada. In addition, Canadian and Mexican firms that become NGFA Associate/Trading members are expressly permitted to reference the NGFA’s Trade Rules and/or Arbitration Rules in their contracts, or otherwise consent to have the NGFA’s rules apply. However, before referencing the rules in cross-border trade, it is advisable to consult competent legal counsel and review at least three international treaties that govern such transactions, which are summarized below:

  • “The United Nations Convention on Contracts for the International Sales of Goods” (52 Fed. Reg. 6262). The United States, Mexico and Canada are signatores to this treaty, which creates a type of international code for sales of goods. Importantly, parties can exclude application of this treaty to particular transactions by express contractual provisions.
  • “The Convention on the Recognition and Enforcement of Foreign Arbitral Awards” (9 U.S.C. Section 201 et. seq.), which governs the enforcement of arbitration provisions and awards between United States and Canadian firms.
  • “The Inter-American Convention on International Commercial Arbitration” (9 U.S.C. Section 301 et. seq.), which governs the enforcement of arbitration provisions and awards between United States and Mexican firms.