611.3531/579
Memorandum of Conversation, by the Chief of the Division of Trade Agreements (Hawkins)
| Participants: | Señor Don Felipe A. Espil, Ambassador from Argentina; |
| Mr. Francis B. Sayre; | |
| Mr. Laurence Duggan;19 | |
| Mr. Harry C. Hawkins. |
Mr. Sayre referred to the Argentine Government’s memorandum dated December 30, 1937, (copy attached)20 and said that we are not [Page 233] clear as to what is meant by it. He said that our proposal had been to make our preliminary announcement of contemplated negotiations as soon as we had received assurances from the Argentine Government that the latter would abolish its exchange discriminations against the United States on the date of the formal notice of intention to negotiate. He pointed out that the Argentine memorandum referred to does not indicate whether or not the Argentine Government is prepared to give these assurances.
The Ambassador said that it is necessary before removing the exchange discrimination to estimate the probable amount of Argentine exports to the United States which would result from the agreement—not exact figures, of course, but a general estimate. He said the Argentine Government was not trying to trade the removal of the exchange discrimination for tariff concessions by this country. In other words, there is no desire on Argentina’s part to use the exchange discriminations as a bargaining point.
Mr. Sayre replied that he was very glad to be assured of this because the point of principle involved is an important one; that it is a definite part of our policy not to grant tariff concessions in return for the mere removal of discriminations. He said that when the Trade Agreements Act was under consideration in Congress, the question was raised whether it would not cause other governments to take action against American trade in order to create something to offer in return for tariff concessions here; that the effect of this would be merely to bring about reductions in the American tariff without any net gain for the benefit of American exports. Mr. Sayre said that he had assured the Congressional committees that no such situation would be permitted to develop. Hence it is absolutely necessary that we adhere to our position on this point.
In reply the Ambassador again gave positive and definite assurances that the removal of the exchange discrimination would not be used as a bargaining lever to obtain tariff concessions from us; that our concessions to Argentina would be paid for with tariff concessions on American products by Argentina.
Mr. Sayre then referred to the request in the Argentine memorandum for an indication of the nature of concessions which the United States would be in a position to give and pointed out that it would be impossible to foretell what increase in trade would actually result. The Ambassador said that, while the memorandum referred to the need for estimating the increase in the volume of trade which might be anticipated, the idea actually was only to get a general picture of the extent of the concessions contemplated.
Mr. Sayre then referred to the Argentine memorandum with a view to obtaining a clarification of several points, as follows:
[Page 234]With reference to paragraphs 3 and 4, the Ambassador said that the statement that the exchange discriminations were emergency measures necessitated by the treatment of Argentine products by foreign countries, was only inserted for background purposes. It was not to be construed as meaning that the discriminations will be removed only when the American tariff on Argentine products had been reduced.
In regard to paragraph 5, the Ambassador explained that the reference to the availability of exchange resulting from the sale of Argentine products in the United States was not intended to imply that the trade-agreement negotiations would in any sense be on a basis of bilateral balancing; that there was no intent whatever to seek a balance of exports and imports of Argentina’s trade with the United States.
With reference to paragraph 7, the Ambassador said that the reference to the need of maintaining the volume of Argentine imports into the United States through duty reductions on our part did not mean that the concessions by the United States must be such as to permit imports to be maintained at recent abnormal levels, nor that any specific guarantee would be sought that any given volume of imports would result from the agreement.
With reference to our proposal that Argentina give us definite assurances prior to the issuance of the preliminary announcement that the exchange discrimination would be removed when the formal announcement is made, the Ambassador urged that we give to him an indication of the extent of the concessions which we might grant before such assurances were given by Argentina. After extended discussion, it was agreed that if a tentative schedule of concessions were given now, it might lead to detailed discussions of the concessions requested, amounting virtually to negotiations, and thus might defer for a considerable period of time the issuance of the preliminary announcement. This would be extremely unfortunate in view of the pressure of time. It was pointed out that if Argentina should give us the assurances regarding the removal of discriminations at the time of the formal announcement and if the preliminary announcement were immediately made, discussions of the schedules could then go forward and Argentina would then be in a position to get an idea of the probable extent of the concessions to be offered by the United States. If it were dissatisfied, the formal announcement could be held up and along with it the obligation to remove the discrimination. The Ambassador finally agreed to recommend definite acceptance of our proposal and prepared the attached draft telegram21 to his Government which he said he would send immediately.