Office of the Historian

440. Telegram From the Department of State to the Embassy in the Philippines1

Washington, October 5, 1959—5:38 p.m.

1045. Your 1177.2 Believe Embassy should proceed deliver aide-mémoire along lines G–32.3

Philippine sugar situation not considered particularly burdensome here. Philippine concept that burdensome surplus exists unless all sugar from each crop sold before next harvest begins differs markedly from other large producers. Carryover of reasonable stocks to meet unexpected market demands and to assure filling commitments in event poor harvest is more normal custom among other producers. Witness inability Philippines fill 1957 US quota when shortfall was 74,000 tons. Also fact International Sugar Agreement4 requires exporters to carry stocks amounting to 12.5 percent of basic export tonnages.

No possibility exists of offering Philippines our support for increased sugar quota in return for more liberal treatment tobacco. US tobacco interests consider they already gave Garcia quid pro quo in 1955 when they supported ratification Laurel-Langley Agreement particularly provision for duty-free quota on Philippine tobacco. Department informed these interests will make serious effort reduce Phil sugar quota next session. It is recalled that a provision whereby Secretary Agriculture would reduce Philippine sugar quota if Philippines reduced imports of US tobacco was included in sugar bill reported out [Page 932] by House Agriculture Committee in 1955. Provision was removed on House floor by Chairman of Committee evidently as result of assurances given by Philippines.

Herter
  1. Source: Department of State, Central Files, 411.9641/9–2459. Confidential. Drafted by Paul E. Callanan of the Office of International Resources, cleared with SPA and CPT and the Department of Agriculture, and approved by Robert M. Carr.↩
  2. In telegram 1177 from Manila, September 24, Bohlen maintained that the U.S. proposal concerning tobacco would not be attractive to the Philippines unless an increase in the Philippine sugar quota was offered as a quid pro quo. (Ibid., 411.9641/9–2459)↩
  3. Supra.↩
  4. International Sugar Agreement of 1958, December 1, 1958; entered into force for the United States October 9, 1959. (TIAS 4389; 10 UST (pt. 3) 2189)↩