831.24/6–2644
The Ambassador in Venezuela (Corrigan) to the Secretary of State
[Received June 29.]
Sir: I have the honor to transmit herewith as enclosure No. 1 a list of products39 which the Venezuelan Government, by appropriate Resolution of the Ministry of Finance published in the Official Gazette No. 21,441 of June 23, 1944, has exempted from the requirement of a “previous permit” (Licencia Previa) on importation into Venezuela; the list became effective on publication. It is comprehensive in character, thus including all products hitherto exempt from the import permit requirement and which are to be continued on the so-called “free list”.
The extension of the Venezuelan “free list” to include a considerable number of articles hitherto subject to import permit was incidental to the Venezuelan acceptance of our proposal (see Embassy’s telegram No. 627, June 1639) to eliminate the “Import Recommendation” for all imports from the United States except the “positive list” of products still in short supply, as enumerated in the Department’s circular airgram of May 25.40
The present enlarged Venezuelan list represents a compromise between the desire of Venezuelan industrial and other elements to retain control of virtually all imports, and the importers and their supporters desiring the greatest possible relaxation of trade restrictions. This question of relaxing controls was very actively discussed both in the public press as well as in business and government circles, from the latter part of May when our “rollback” proposal was submitted to the Minister of Finance, until the pertinent ministerial decree was published on June 23 as transmitted herewith. The alignment of interest, pro and con, was the same as hitherto since the question became active,—i.e., practically all importers and business interests associated with them, practically all chambers of commerce, and the majority of daily newspapers, favoring the removal of trade restrictions, while local manufacturers, their industrial associations and interests dependent on them, were generally in opposition to such a move; in the government, the Minister of Finance (Sr. Rodolfo Rojas) continues to favor extensive removal of restrictions, while the Import Control Commission—a subsidiary of the Ministry—in principle opposes removal of restrictions. It is understood that President Medina, who last year approved the introduction of import permits, has moderated his views somewhat since the restrictions were first applied.
[Page 1660]The official explanation for maintenance of the import permit system remains virtually unchanged,—(1) that national economy must be protected from sudden changes in international commodity markets that may develop as the end of the war approaches, (2) that Venezuelan authorities must continue to supervise the distribution of imported products which are subject to export control in the country of origin, (3) that Venezuelan control as to essentiality of commodities must be maintained so long as the shipping situation remains uncertain, and (4) that national industry must be protected and promoted. In actuality, the last mentioned reason undoubtedly is the most important, and it is believed that protection of local industry—present and prospective—was the principal criterion used in determining whether or not to eliminate the import permit on specific products.
Indicative of the widely-held views of those favoring the elimination of import restrictions, the translation of an editorial appearing in the influential Caracas daily La Esfera of June 23 is transmitted as enclosure No. 2.41 This question also will be very actively debated at the first national meeting of chambers of commerce, industry and agriculture to be held in Caracas during the coming month.
It may be hoped that the “free list” as now established will prove flexible and may be susceptible to frequent extension as a result of the agitation going on in the country centering around the fight against the high, and steadily increasing cost of living.
Any important changes in this situation indicating progress toward more normal trade conditions will be reported promptly.
Respectfully yours,