611.2231/237
The Minister in Ecuador (Long) to the Secretary of State
[Received May 24.]
Sir: I have the honor to report that, judging from his attitude, Dr. Banda is now favorably disposed toward concluding a Trade Agreement with us, but not precisely as we would like it.
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At the conference held yesterday with Dr. Banda, at which Mr. McDonough and Mr. Gade were present, Schedules I and II of the proposed Trade Agreement were discussed informally. Dr. Banda, it developed, is of the opinion that Schedule I should be confined almost altogether to the articles upon which special concessions were offered by the Ecuadorian Government in a memorandum, a copy and translation of which were forwarded to the Department as enclosures to the Legation’s despatch No. 911 of September 27, 1937,6 on the subject of “Concessions Offered by Ecuador in the Proposed Trade Agreement”. He does not wish to discuss any special concessions on the articles upon which that memorandum states that the United States will enjoy the 30% reduction in duties under the Preferential Tariff. He hopes that, by so limiting the discussions, possible objections by the National Economic Council and the Ministry of Hacienda can be avoided.
Dr. Banda states that the recommendations which he would make to his Government, and which he believes would be approved by it, include reductions of 50% in the import duties on hog lard and pure wheat flour and substantially larger reductions in the import duties on passenger automobiles, on omnibuses, and on parts and replacement parts for passenger automobiles, omnibuses, trucks, etc., than were offered last year.
The concessions by Ecuador would be based on the new Ecuadorean Import and Export Tariff (Ley Arancelaria de Aduanas) dated March 30, 1938, which is now in force (with certain exceptions). Copies of a pamphlet containing that tariff law were forwarded as [Page 515] an enclosure to despatch No. 690 of April 15, 1938,7 of the American Consulate General, Guayaquil, on the subject of “Revision of Ecuadorean Import and Export Tariff”.
Dr. Banda is willing to recommend a reduction in the import duty on only one item upon which a special concession was not offered by Ecuador in its memorandum of September 25, 1937. That item is that of “sewing machines, with or without covers, called table or cabinet machines, for seamstresses and tailors”. The duty on each machine under paragraph 647 of the old tariff is 20.00 sucres plus 10 percent, less the 30 percent reduction under the Preferential Tariff, but the duty under paragraph 650 of the new tariff will be 50.00 sucres plus 10 percent, less the 30 percent reduction under the Preferential Tariff. He agreed with the argument that sewing machines are the tools of trade of working people.
A preliminary and tentative statement of the approximate Ecuadorean import duties which might be applicable to the products of the United States under the proposed Schedule I is as follows:
[Here follow proposed tariff schedules.]
In spite of the increases in the duties on the automotive vehicles and parts dutiable under tariff items 687–a, 687–b, 687–c, 687–d, and 687–e (684–a, 684–b, 684–c, 684–d, and 684–e of the old tariff) by the Tariff Law of March 30, 1938, the proposed duties are appreciably lower than the proposals made by the Government of Ecuador in September, 1937. Dr. Banda considers that these additional reductions are the principal new concessions now being tentatively proposed, but is not sure that he can get his Government to agree to them.
Ecuador would grant to the United States the benefits of the Preferential Tariff.
Schedule II has been discussed with Dr. Banda in only a preliminary manner but it is believed that the proposals will be acceptable to Ecuador.
Statistics were supplied to Dr. Banda showing that the importations into the United States of the products of Ecuador to be included in the proposed Trade Agreement amounted during 1935 to more than $3,000,000 and that the same was true of 1936. Dr. Banda was surprised to learn that the amounts were so large and asked that similar figures be obtained for 1937 so that he can exhibit them to the Ministry of Hacienda, the National Economic Council, and other interested Ecuadorean officials. Telegram No. 49 of May 13, 4 [3] p.m.,7 has been sent to the Department requesting the statistics.
Respectfully yours,
- Foreign Relations, 1937, vol. v, p. 508.↩
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