611.2331/103
Memorandum of Conversation, by Mr. H. Gerald Smith of the Division of Trade Agreements
| Participants: | Ambassador Steinhardt |
| Mr. Hawkins15 | |
| Mr. Sparks, RA16 | |
| Mr. Sappington17 | |
| Mr. Smith |
Ambassador Steinhardt called at the Trade Agreements Division today to discuss the question of a possible trade agreement with Peru, [Page 845] preliminary conversations regarding which have been proceeding for some months in Lima.
With respect to the general provisions of a trade agreement with Peru, the Ambassador noted that he had received from the Peruvian Foreign Minister, just prior to his departure for the United States, an assurance that Peru would negotiate upon the basis of the unconditional most-favored-nation clause but that the Foreign Minister had indicated that he would desire to discuss the question of making certain exceptions to that clause in the case of trade between his country and Chile. The Ambassador felt that there were no other insurmountable obstacles to a trade agreement as concerns the general provisions.
With respect to possible concessions by both Governments, the Ambassador pointed out two developments which had not been previously reported, first, that the President of Peru had expressed a strong personal interest in “having something done” for Peruvian silver, specifically in the way of purchases of that commodity by the United States Government. The Ambassador was informed that this was a question which would have to be discussed with the Treasury Department. The second development concerned cotton, a trade agreement concession for which he believed the Peruvians would press most strongly, even possibly to the extent of making a concession on that commodity a sine qua non for an agreement. The Ambassador was informed that a further investigation would be made immediately into the possibility of providing a separate tariff classification for Peruvian cotton, although he was also reminded that this would involve the question of our trade relations and a possible trade agreement with Egypt.
With respect to other possible concessions to Peru in a trade agreement, of which sugar would probably be the most important, the Ambassador indicated with respect to this commodity that, while the Peruvians would probably appreciate anything which might be done to improve the quantitative or price position of Peruvian sugar in the United States market, he did not believe that a concession on this commodity is absolutely essential in a trade agreement.
In view of the relatively satisfactory position of United States trade in the Peruvian market at the present time, and in view of the absence of such factors as exchange control, quotas, et cetera, in Peru, it was agreed that it would be desirable to negotiate a trade agreement as soon as possible in order to assure the maintenance of these conditions. The principal question, therefore, concerned the timing of an agreement and it was suggested that perhaps the best period would be during the latter part of the autumn.