611.3531/407: Telegram

The Acting Secretary of State to the Secretary of State

139. Your letter December 12th. Questions presented have been discussed by Trade Agreements Committee and following represents their unanimous views, in which all in this Department concur. Sayre15 laid matter before Secretary Wallace16 this afternoon. Wallace entirely concurs in following conclusions. Henry Grady17 who happens to be in Washington has also been consulted and expressed full agreement.

1.
On the question of immediate formal announcement of negotiations, we share fully the apprehensions set forth in your letter under reference. Such announcement would tend to prejudice renewal of Trade Agreements Act. Principal opposition to renewal is likely to come from agricultural interests who feel that negotiations thus far have been too largely with agricultural countries involving benefits to industry at expense of agriculture. A formal and definite announcement of intention to negotiate would aggravate this criticism and [Page 183] tend to solidify opposition to renewal of Act. Moreover, immediate announcement would not expedite negotiations as some time will be required to complete the preparatory work which must be done before negotiations can proceed. There now appears to be good prospect of renewal of Act early in the session. If that happens, announcement could be made if agreeable to both Governments and negotiations could at once go forward some time in the early part of 1937. In any event, preparatory work is being speeded up to make this possible.
2.
In regard to possible concessions by United States studies thus far made indicate probability that some concessions or bindings on principal Argentine products could be made if adequate quid pro quo obtained. The usual thorough preparatory work is now being done and is well under way by Tariff Commission and Agriculture. Much work has been done on flaxseed and data have been submitted in usual manner to country committee. Latter is agreed that concession of some kind should be recommended on this product. Reduced duty with customs quota is under consideration but committee has not yet been able to formulate definite recommendation.
3.
With reference to our requests for concessions by Argentina we would normally ask for some tariff reduction or binding on all products of which we have been chief source of Argentine imports. Whether we should request concessions on all products of which we have been the chief source would depend, however, on the schedule of concessions which we can offer. In light of decision on latter schedule it might be considered necessary in order to bring the schedules into approximate balance to eliminate from our requests some of the products of which we have been the chief supplier. In advance of decision on this point it may do more harm than good to present to Argentine Government even a tentative list of requests.
4.
In view of the fact that our studies have not gone far enough to support other than the general and highly tentative indications set forth above, we are inclined to think that even informal conversations regarding specific commodities at this time might result in confusion and misunderstanding and thus delay rather than facilitate the conclusion of an agreement.
5.
For the reasons given above we consider it desirable that the usual thorough preparatory work be completed before discussions proceed and that any formal public announcement of intention to negotiate be deferred until renewal of the Act is definitely assured. If some sort of announcement by the Secretary appears desirable before he leaves Buenos Aires we suggest a statement to the effect that the bases of a trade agreement between Argentina and the United States are being actively studied.
Moore
  1. Francis B. Sayre, Assistant Secretary of State.
  2. Henry Wallace, Secretary of Agriculture.
  3. Henry F. Grady, Chief of the Division of Trade Agreements.