Foreign Relations of the United States Diplomatic Papers, 1934, The American Republics, Volume V

611.123 Vegetables/51

The Ambassador in Mexico (Daniels) to the Secretary of State

No. 1771

Mexico, September 11, 1934.
[Received September 15.]

Sir: I have the honor to refer to the Embassy’s despatch No. 1729 of August 31, 1934, and to previous correspondence concerning a reciprocal tariff agreement between the United States and Mexico with respect to winter vegetables grown on the West Coast of Mexico and to transmit herewith a copy and translation of a letter dated September 7, 1934,⁷ from the Minister for Foreign Affairs, Doctor José Manuel Puig Casauranc, together with a copy and translation of his note No. 575 of September 6, 1934, enclosed therewith, transcribing a draft of a modus vivendi covering this subject, which he proposes concluding by means of an exchange of notes between the two countries.

[Here follow summaries of the notes attached.]

Mexico now has most favored nation agreements with the Governments of Japan,⁸ Italy,⁹ Ecuador¹⁰ and Santo Domingo.¹¹ It is my understanding that the Government of the United States has most favored nation agreements with many more countries than these four. Due to the imports which Mexico receives from these four countries, it would appear that under the proposed modus vivendi the United States would not gain anything but recognition of the most favored nation clause and a promise of a permanent treaty, while on the other hand Mexico would not only gain the reduced tariff granted to Cuba on imports into the United States of winter vegetables, but also might very possibly receive other tangible advantages not only through the recent agreement made with Cuba by the United States but also due to our most favored nation agreements now in force between the United States and other countries, this, too, without giving to the United States a substantial quid pro quo. Doctor Puig mentions that he has followed the wording of the modus vivendi entered into with Italy. The situation which existed between Italy and Mexico does not seem to be analogous to that which exists between the United States and Mexico.

As has been reported in the past, Doctor Puig has stated to me that he has been under considerable pressure from the growers on the West Coast of Mexico to obtain some reduction on the United States tariff on their products. As the Department knows, he has been endeavoring to have the Department begin negotiations for a reciprocal tariff agreement. Now that there does not appear to be any chance of this being done until the end of the winter, he has proposed a modus vivendi which can be entered into by an exchange of notes which will redound to Mexico’s advantage in the question of winter vegetables and which would, therefore, satisfy the demands of the growers on the West Coast.

As of possible interest to the Department, the following is the approximate value of the importations into the United States from Mexico of tomatoes and of the total of all winter vegetables for the last three seasons:

Seasons	Tomatoes	Total of all Winter Vegetables
1931–1932	$6,273,400.	$8,891,700.
1932–1933	2,188,200.	4,555,800.
1933–1934	1,171,800.	1,807,100.

Yesterday afternoon, September 10th, when I called at the Foreign Office and discussed this matter with Doctor Puig, he said that the growers of Yucatan have been making appeals to the Minister of Hacienda to secure the same treatment for sisal grown in that part of this country as their competitors in Cuba receive under the new reciprocity treaty with Cuba. They were quite as insistent as the people of Northwestern Mexico are as to prompt action to give markets for tomatoes and early vegetables, and as the cattle raisers in Northern Mexico for a reduction of the tariff on cattle weighing less than 700 pounds.

In a despatch, dated September 4, 1934, to the State Department,¹² the American Consul at Guaymas quoted Governor Calles of Sonora as saying that he believed there ought to be no difficulty in finding commodities for reciprocal agreements, mentioning specifically that the State of Sonora was concerned particularly with winter vegetables and cattle. The Governor says that tomatoes are produced for export from the Yaqui Valley in January and even as early as December, and adds: “They would not be in serious competition with growers of that vegetable in the United States”. He says that the same is true of green peas. He argued that it would be mutually advantageous if the United States would abolish the duty on cattle under 700 pounds, or at least make some concessions. If Secretary Sayre has not had this letter from the Consul at Guaymas brought to his attention, I commend it to his consideration.

In my conversation yesterday with Dr. Puig I asked him what Mexico would be ready to offer to the United States in return for the request for reciprocal duties on tomatoes, sisal, etc. He said they would grant reductions on iron pipe, eighty-five per cent of which comes to Mexico from the United States, and on lard and its products. I asked: “How about automobiles?” He thought something might be done for automobiles in the agreement, and would speak to the Minister of Hacienda about that. I called to his attention a conversation I had, upon the occasion of my trip to Ciuclad Juarez and El Paso, with the Mexican Collector of Customs at Ciudad Juarez. The Collector said that Mexico could well afford to abolish the tariff on automobiles, so that many more Mexicans could buy them from the United States, adding: “The Mexican Government would derive more revenue from the larger purchases of gasoline by the increased owners of cars than is now derived from the automobile tax”. In order to secure the proposed modus vivendi at an early date, Doctor Puig said the Mexican Government would naturally be willing to meet the United States upon equal terms in the tariff reductions. It was clear that Doctor Puig, due to pressure from the growers of the West Coast of Mexico, and also perhaps due to pressure from other sources, is doing his utmost to have negotiations opened at the earliest possible moment, to the end that winter vegetables grown in Mexico can secure markets in the United States in December of this year and January of 1935. If the negotiations are delayed, the growers of Mexico will feel that their competitors in Cuba have an advantage which is denied them. An early agreement would greatly gratify the Mexican Government and the growers. They feel that if there is to be a reciprocity treaty between this country and Mexico it should take effect by December. Undoubtedly they would be willing to make more concessions now than if negotiations are postponed and the barter deferred until after the winter vegetable season has passed.

Respectfully yours,

Josephus Daniels

[Enclosure—Translation]¹³

The Mexican Minister for Foreign Affairs (Puig) to the American Ambassador (Daniels)

No. 575

Mexico, September 6, 1934.

Mr. Ambassador: Through our Embassy in Washington we have learned that the Department of State of the United States has advised that in accordance with the program in relation to trade agreements which the American Administration has outlined for itself, the negotiations for a trade agreement with Mexico could begin about the end of the coming winter.

In view of the above and in order to secure a procedure that will permit the exportation of our fresh vegetables during the coming winter, under conditions similar to those adopted for Cuba, our Embassy approached the Department of State with respect to the possibility of concluding a provisional modus vivendi to cover the exports of such products and which would remain in force until the conclusion of the principal convention.

Our Ambassador advises us that information that he has obtained from the Department in question appears to him to indicate that the Government of the United States would be disposed to consider the possibility of a modus vivendi, and that the question would resolve itself as soon as we submitted, even though informally, the respective proposal (consulta respectiva), since the suggestion made by Ambassador González Roa did not appear as yet to be based upon specific instructions from this Ministry.

Wishing to hasten the conclusion of the modus vivendi referred to above, I have the honor to present to Your Excellency the formal request of Mexico for the establishment of that modus vivendi by means of an exchange of notes between that Embassy and this Ministry, and I am taking the liberty of suggesting, for the consideration of the Department of State, the following wording, similar in sense to that of the notes exchanged with the Government of Italy for the establishment of a similar modus vivendi, with the sole exclusion from the document now proposed of the paragraph which in the case of Italy excepts from most-favored-nation treatment the system of customs duties and customs formalities in general in so far as facilities now accorded or which may be accorded by either of the parties (Mexico and Italy) to contiguous States in order to facilitate frontier traffic, as well as those deriving from a customs union, are concerned:

“With a view to favoring and developing the economic relations between our two countries, I have the honor to inform Your Excellency, duly authorized by my Government, that in consideration of the circumstance that at the present time there does not exist between Mexico and the United States a Treaty of Commerce and Navigation, which Treaty the two parties bind themselves to conclude as soon as possible, the Mexican Government is in agreement with the American Government in the sense that each of the two countries shall concede most-favored-nation treatment to the vessels and the raw or manufactured products of the other.

“This agreement, effective for one year, shall become operative after one month from the date of the present note and may be extended by tacit renewal.

“In the event of tacit renewal, this agreement may be denounced at any time by either of the contracting parties, with three months’ advance notice.”

Of course, any editing of the modus vivendi that would lead to the end sought by my Government would be acceptable to us, and in order to save time it could be discussed, if so desired, with our Embassy in Washington which now has instructions for this purpose.

I avail myself [etc.]

Puig

7. Not printed.
8. Treaty signed October 8, 1924, League of Nations Treaty Series, vol. xxxvi, p. 259.
9. Notes exchanged July 31, 1934, Mexico, Tratados y Convenciones Vigentes entre los Estados Unidos Mexicanos y Otros Paises, 1930–1938, vol. vi, p. 151.
10. Treaty signed July 10, 1888, British and Foreign State Papers, vol. lxxix, p. 144; modified by convention signed May 4, 1934, Tratados y Convenciones, vol. vi, p. 65.
11. Treaty signed March 29, 1890, British and Foreign State Papers, vol. lxxxii, p. 689; modified by notes exchanged February 15, 1934, and May 5, 1934, Tratados y Convenciones, vol. vi, p. 61.
12. Not printed.
13. File translation revised by the editors.