622.116/122: Telegram
The Secretary of State to the Minister in Ecuador (Long)
128. Your 191, August 23, 6 p.m. An analysis by the Department of the Ecuadoran control system under discussion reveals, to the extent that applications for exchange for American products are refused or delayed, an apparent conflict with the provisions of Article [Page 873] X of the trade agreement. The agreement contemplates the granting of exchange for all permitted imports from the United States; without delay or restriction, any necessary control of the inflow of such imports to be exercised by means of quotas established and administered in accordance with the provisions of Articles VII and VIII.
Please bring the foregoing to the attention of the appropriate officials, referring to the discussion some weeks ago leading to our acquiescence in the imposition of quotas on schedule products, and to the increases in duty on a number of other items, and state that it was our understanding that those measures would be sufficient to relieve the exchange situation; that although our attitude of sympathy with Ecuador’s exchange difficulties, as shown in those discussions, remains unchanged, we naturally regret the adoption of any measures which conflict with the agreement.
You may say, further, that in view of the exchange difficulties we are not disposed at present to invoke formally the trade agreement provisions mentioned above for the purpose of claiming exemption for American products from the present regulations. However, we trust that steps will be taken at an early date to bring the Ecuadoran regulations into harmony with the trade agreement provisions, and we will be glad to consider sympathetically any proposals which the Ecuadoran officials may wish to submit with this in view.
Pending further discussions, please keep the Department currently informed regarding the administration and effects of the control system on our trade. Also, amplify the final paragraph in your 191. Are the authorization documents to be transmitted to exporters by importers directly, or by the Ecuadoran Government to consuls, or by what other method?
For your own information, the Department is considering the possibility of revising the exchange control article of the agreement with a view to giving it more flexibility. Please ascertain discreetly, without revealing the purpose in mind, whether such a change could be effected in Ecuador without congressional action.