822.51/857: Telegram

The Acting Secretary of State to the Minister in Ecuador (Long)

23. Your 32 and 35, April 26 and 27. It is hoped that the Ecuadoran authorities will not take any precipitate action which would jeopardize the trade agreement or which would have the effect of causing the panic conditions they wish to avoid. The action suggested of doubling import duties, even temporarily, would be a clear violation of Article I of the trade agreement if applied to products imported from the United States included in Schedule I. The Department assumes that the Foreign Minister has reference to terminating the entire agreement when he speaks of the possibility of dispensing with notice required. Such action would be most unfortunate and would not seem necessary in order to meet a temporary emergency.

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If the Ecuadoran authorities are absolutely determined to take some action to restrict imports other than permitting the sucre to depreciate, you may suggest the possibility of temporarily increasing import duties or imposing quotas on articles not included in Schedule I of the trade agreement. Such action would not contravene the agreement. It should only be suggested by you in order to prevent more drastic action.

If the Ecuadoran authorities should consider it necessary to restore quantitative import control, you should stress the importance of doing it in conformity with the provisions of the agreement, and if it should be proposed to limit imports of any Schedule I products, attention should be called to the requirement of written notice.

If the Ecuadoran authorities consider that the provisions of paragraph (a) of Article X of the agreement are too restrictive under present circumstances, you may state that this Government would be willing to consider the possibility of modifying that portion of the article.

Please continue to report new developments by telegraph.

Welles