611.3531/1416: Telegram
The Ambassador in Argentina (Armour) to the Secretary of State
[Received 5:54 p.m.]
301. Confirming my conversation over the telephone with Hawkins37 yesterday afternoon, our full proposals based on telegraphic instructions from the Department were handed to Cantilo shortly before 8 o’clock Monday evening under cover of (1) a formal note enclosing the schedules, the general provisions and proposed exchange of notes regarding subsidies, etc. and (2) a personal note, based on the Secretary’s personal telegram to me, explaining the situation and inviting understanding and sympathetic consideration of our proposals.
[Page 277]The Minister read the personal note in my presence and his attitude was not discouraging. The following noon, however, presumably after he had talked with the experts, he appeared very much discouraged and told me that he saw no basis for a trade agreement in our proposals. He stated that he had already instructed Torriani to give him a detailed statement at the earliest practicable date. I gained the impression that he felt the principal trouble lay in Schedule II.
Just after my conversation with Hawkins, Ravndal called on Torriani with a view to obtaining a more precise indication of the reaction to our proposals. Torriani and Bonfante who was with him gave the impression of being extremely discouraged. Torriani like Cantilo said that he saw no basis whatsoever for a trade agreement in our proposals. With reference to the customs quota on flaxseed, he asserted that, with the increase in flaxseed production in the United States, Argentina probably would be unable to export much if any in excess of the customs quota with a rate as high as 75 cents a bushel. He said that our offers on canned beef were unsatisfactory and that the alternative proposal, involving a global customs quota, did not represent any worth while improvement because Argentina’s share in our canned beef imports averaged less than 50% which meant that Argentina could not look forward to a duty reduction on more than 65,000,000 pounds per annum, an amount which would not permit of any appreciable expansion of Argentina’s total exports to the United States. He added that the situation possibly would have been somewhat less hopeless if the United States had offered to remove the customs quota on dead turkeys, to give a reasonable customs quota on corn, a reduction on hides, and improved treatment on fresh fruits other than grapes. As for the general provisions he reiterated that he personally saw no way of accepting them on the basis of our Schedule II proposals, and the Government of the United States apparently would not change its general provisions requirements, particularly with respect to articles III, IV, and XI. He stated with reference to clause A of article IV that Argentina will not assume exchange under obligations which it might not be able to fulfill. He concluded by expressly stating that he was merely giving his personal views, the inter-Ministerial committee having concluded its appraisal. Asked when there would be a subcommittee meeting to discuss the proposals, he said they would reply to our proposals in writing and that he perceived no occasion for a meeting in the interim.
Following this conversation we prepared a brief memorandum, indicating the 1938 trade coverage of our proposed schedules and the increase in Argentina’s exports to the United States in the first 11 months of 1939 and suggested that under the proposed trade agreement [Page 278] Argentina’s exports to the United States in 1940 and subsequent years would be far greater than they will be if no agreement is signed.
- Harry G. Hawkins, Chief, Division of Trade Agreements.↩