611.2531/24: Telegram
The Acting Secretary of State to the Ambassador in Chile (Culbertson)
39. We refer to your 97, August 25 and 99, September 1. The Department has given earnest and extended discussion to the suggestion [Page 924] made earlier this year, and now repeated in these telegrams, that in the proposed negotiation of a commercial treaty with Chile our unconditional most-favored-nation principle should be supplemented by an agreement to maintain, or in some other form stabilize, our tariff upon Chilean export products, especially nitrates, for a period of years in return for stabilized or lowered Chilean duties on items of American trade.
We observe now that the Chilean Government desires to join discussion of a commercial treaty embodying this idea with the modus vivendi we have been seeking to obtain in order that the discriminations against American goods now imposed by Chile should be removed. The Department is not prepared to enter even at the instance of Chile, into a new departure in the field of commercial policy. It involves a major shift in American tariff practice which the Department is unwilling to adopt without the most mature consideration and which requires Congressional approval and cooperation. The sense of the Department furthermore, is that in face of a world situation changing as rapidly and significantly as at the present it can formulate no new commercial policy.
The Department still desires you to secure a modus vivendi by exchange of notes in accordance with which American goods would receive the same lowered tariff rates as have been granted to French goods. It sees no objection to including in the exchange of notes a statement of American willingness to enter immediately into negotiations with Chile for a commercial treaty consistent with our traditional unconditional most-favored-nation policy. We trust that by proper explanation to the Chilean Government of the considerations we have set forth above that Government will at once be willing to enter into the modus vivendi. By the very nature of its export products it has a certain degree of assurance that the American Government is not likely to raise new tariff barriers against them.
If the Chilean Government, as you indicate, decides to reverse its commercial policy and abrogate such unconditional most-favored-nation treaties as it has, the United States will continue to expect as favorable treatment as is given to any other country.
The Department approves, therefore, the acceptance of the first note in your telegram number 99 assuming that the only implication of duty on the part of our Government is to proceed actively and in good faith to the negotiation of a treaty consistent with the views expressed above. If the second note, as it seems to the Department, contains any implication or understanding that we can or will by some bargaining agreement guarantee the stabilization or maintenance even of present tariffs, this note should not be accepted.