Foreign Relations of the United States, 1949, The United Nations; The Western Hemisphere, Volume II

560.AL/6–949: Telegram

The Acting Secretary of State to the Embassy in Chile

confidential
niact

Washington, June 10, 1949—8 p. m.

183. Dept has given careful attention urtels 291 and 298.¹ Chile’s financial difficulties fully appreciated and Dept has no intention disregard them.

Dept of opinion Chil measures under discussion violate GATT. Much more than technical violation involved, since Dept’s view such measures and Chile’s unwillingness to have CPs² consider them threaten viability GATT Charter program and basic principle adjustment differences by international consultation. Apparent to Dept if any CP by threat withdrawal is allowed avoid consideration differences by CPs as group and avoid fulfillment of commitment, GATT will become meaningless.

Like Chile, Dept would prefer resolve difficulties on bilat basis and during such discussions we would at all times consider most sympathetically Chile’s financial and other difficulties and would endeavor work out arrangements to meet them.

If such bilat discussions fail of mutually acceptable arrangement, we propose submission differences to CPs. Even in such case we would wish to have question submitted jointly, thus avoiding even appearance alignment US against Chile. Should, in such case, CPs confirm US view, we would be prepared support before other CPs a temporary modification of what we consider Chile’s present obligations under GATT, in order assist Chile meet financial difficulties which could not be solved without such modification. GATT Article XXV makes possible waiver by CPs if facts justify. GATT provisions are sufficiently flexible so that adjustments can be made to meet Chile’s current difficulties. Chil of course is free without violating GATT to increase its revenues by applying increased taxes on imported goods, including scheduled items, provided equivalent taxes are applied on like domestic products.

Dept feels strongly that the solution, whether reached by bilat discussions or by reference to CPs as group, must be consistent framework GATT which was basis US position Deptel 181³ from which we see no clear way deviate without violating GATT itself.

Pls discuss above with appropriate Chil officials and request that Chil Del Annecy be sent instructions which will permit full discussion with our Del with view to bilat solution if possible or, alternatively, a joint reference to CPs as group.

Webb

1. Neither printed. These telegrams conveyed Ambassador Bowers’ strong recommendations that the Department heed the concern expressed by Chilean officials, especially Finance Minister Alessandri, over the apparent intent of the United States to refer to the contracting parties of the General Agreement on Tariffs and Trade (GATT), then meeting in Annecy, France, a U.S. complaint against Chilean increases in certain tariff surcharges which the United States considered violative of the GATT (560.AL/6–849, 6–949).

   The text of the GATT is contained in TIAS 1700, or 61 Stat. (pts. 5–6). Documentation on U.S. participation is contained in volume i.

2. Contracting parties.
3. Not printed.