811.20 Defense (M)/1544

The Ambassador in Mexico (Daniels) to the Secretary of State

No. 12463

Sir: I have the honor to refer to the Department’s confidential telegram No. 101 of March 13, 7 p.m., 1941, requesting that I discuss with the Minister of Foreign Affairs of the United Mexican States the question of an export control by the Mexican Government. I also have the honor to refer to my despatch No. 12398 of March 17, 1941,37 in answer to the Department’s forementioned Telegraphic Instruction No. 101. At the request of the Under-Secretary of Foreign Affairs, Lic. Jaime Torres Bodet, I, accompanied by the Commercial Attaché,38 called on the Under-Secretary on the morning of March 26th, and received from him an informal memorandum regarding the question of establishing an export control. As enclosures hereto, you will find the Spanish text and translation of the informal memorandum in question.37 I would like to point out to the Department the very friendly tone of the memorandum as well as the wholesome desire expressed therein to cooperate with us.

In a nutshell, the essence of the informal note in question is as follows:

1.
—The Mexican Government is willing and has the legal means to exercise an export control, but, prior to doing so, it feels that it is [Page 405] indispensable to receive from the United States the assurance that it could sell the products under control in the American market under conditions favorable to its economy and that the prices of such products would not be inferior to those prevailing in North American markets.
2.
—If the above assurance can be given, then, the Mexican Government will enact the laws necessary for the export control of some articles.
3.
—The Mexican Government feels that the above agreement could be made by a simple exchange of notes and that discussions between the Mexican Department of Foreign Relations and the Embassy could determine the characteristics of the agreement and the products to be included.
4.
—The Mexican Government will not find it inconvenient to prohibit the re-exportation from Mexico of articles imported from the United States and which are subject to United States export control.
5.
—However, the Mexican Government points out its need for continuing to receive with regularity and promptness many articles which are on the United States Export Control List with particular reference to iron (ingots and scrap) and machinery and would welcome the assurances of the American Government in this respect.

Apart from the contents of the informal memorandum from the Foreign Office, the Sub-secretary brought up the question of petroleum. He said that shipments to Japan had been completely discontinued since last December and that the only existing outlet for Mexican petroleum of any consequence is now in the United States. Mr. Bodet said that the Mexican quota under the Venezuelan Treaty was increased only 1,000,000 barrels for this year over last year. He said that his Government felt that in view of the very close cooperation between our Governments, it was hoped the United States would reconsider the oil quota to Mexico and enlarge it materially. The Under-Secretary emphasized quite strongly the necessity for Mexico to find a larger petroleum market in the United States.

The Under-Secretary also said that any suggestions from the American Government in reference to the characteristics of an export control would be welcome.

In summary, the informal memorandum from the Under-Secretary means that Mexico is ready to exercise an export control after the products are agreed upon and assurances have been given to the effect that the United States will absorb the controlled products under favorable conditions and at prices prevailing in the North American markets. I await your further advice in this matter.

Respectfully yours,

Josephus Daniels
  1. Not printed.
  2. Thomas H. Lockett.
  3. Not printed.