611.2331/115
The Chargé in Peru (Dreyfus) to the
Secretary of State
No. 712
Lima, October 22, 1938.
[Received October
29.]
Sir: I have the honor to inform the Department
that the Minister of Foreign Affairs apologized to me on Thursday for
the long delay which has occurred in replying to the Embassy’s note No.
219 of September 15, 1938,24 requesting a
statement concerning the nature and extent of the exceptions which his
Government may wish to make with regard to trade with contiguous
countries, in connection with
[Page 856]
the negotiation of the trade agreement with the United States. Dr.
Concha promised to let me have this reply by the end of this week.
Dr. Concha informed me that he had gone over the matter with his advisory
committee and that the decision had been reached to request that trade
with all countries contiguous to Peru should be excepted from the
operation of the most-favored-nation clause. I reminded him that it was
the established policy of the American Government to include in a trade
agreement only such exceptions to unconditional most-favored-nation
treatment as are of a generally recognized nature and long standing. The
Minister then naively explained that it was his policy to ask for the
maximum concessions even if it should develop later that they could not
be obtained. This attitude on the part of the Foreign Minister may well
be worth remembering in any future negotiations with him.
In view of Dr. Concha’s position, and to avoid any misunderstanding of
the attitude I had taken, I decided to send him at once the informal
memorandum, dated October 21st, which Mr. Cochran helped me to prepare
and of which a copy is enclosed.
In our conversation, Dr. Concha explained to me that, largely to protect
himself, he had appointed the consultative committee, which will pass
upon all questions arising in connection with the trade agreement
negotiations. He stated that the committee was a safeguard and a buffer,
as otherwise he might be accused of favoring special interests. For
example, if some concession were secured for Peruvian sugar, it might be
alleged that he had succumbed to influence by the wealthy sugar
producers.
Respectfully yours,
[Enclosure]
The American Chargé (Dreyfus) to the Peruvian Minister for Foreign Affairs
(Concha)
No. 232
Lima, October 21, 1938.
My Dear Mr. Minister: I have been thinking
over our conversation of yesterday evening, with special reference
to the trade agreement negotiations. As I remember it, you indicated
that your Advisory Committee felt that Peru should ask that trade
with all the contiguous countries should be excepted from the
operation of the most-favored-nation clause.
The trade agreements program of the United States has for its sole
object the increase of world trade. This involves the reduction of
tariff barriers to commercial interchange, and the amelioration or
abolition of exchange, quota and other restrictions thereon. The
United States believes that the most practicable—indeed, the only
[Page 857]
satisfactory—method of
obtaining this increase of trade, both bilaterally and
multilaterally, is through the unrestricted and unconditional
application of the most-favored-nation principle.
It is noted that every country in South America except Argentina,
Paraguay, Uruguay and Venezuela, is “contiguous” to Peru. It is also
believed that Peru has never conceded special customs treatment to
any “contiguous” country other than Chile (except for frontier
traffic). If Peru were to request that its trade with all the
neighboring countries should be excepted from the operation of the
most-favored-nation principle, the result would be to increase the restrictions on world trade, and
the discriminations against American commerce in particular, rather
than to reduce them; and the result would be to defeat the primary,
basic purposes of the trade agreements program.
May I invite your attention to that portion of my note dated
September 16 [15], 1938, where the Department
of State indicates that the United States can agree to any exception to the most-favored-nation
clause only with the greatest reluctance; and that it feels such
action could only be justified in the case of special, preferential
treatment which was “of a generally recognized nature and of long
standing”?* Mr. Cochran
informs me that as far as he knows, the only occasion on which the
United States has agreed to any exception whatsoever to the
most-favored-nation clause was in the case of the trade agreement
with Czechoslovakia.25 This country forms part of the
Danube basin, which has been an economic unit for many centuries;
and the United States recognized that Czechoslovakia could not
divorce itself from the mutual inter-dependence of the portions of
the old Austro-Hungarian Empire which had long conceded special,
privileged treatment to each other. Even in acceding to the
Czechoslovak request that her inter-Danubian trade be excepted from
the operation of the most-favored-nation clause, however, the United
States placed definite limitations on the type and amount of
preference granted.
Thus, while I shall of course be glad to transmit to the Department
of State any observations or requests which the Government of Peru
may wish to make relative to exceptions to the most-favored-nation
clause, I feel sure that I correctly interpret the position of my
Government when I state that it will agree to any exception to the unrestricted and unconditional
application of this principle only with extreme reluctance; that it
will feel such a course warranted only
[Page 858]
where preference has long been granted; that
it will wish the preferences limited to articles which are now the
subject of special concessions; that is, to a restricted list of
articles; and that it will wish the preferences to be definitely
specified and limited, both in kind and amount.
With assurances [etc.]
