The Acting Secretary of State to the Peruvian Ambassador ( Beltrán )

The Acting Secretary of State presents his compliments to His Excellency the Ambassador of Peru and has the honor to bring to his attention a matter which has for several months been of considerable concern to the United States Government.

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As His Excellency is aware, the Peruvian Government in January of this year felt it necessary to institute import and exchange control regulations. This decision was observed with regret by the United States Government not only because Peru had hitherto served as an outstanding and inspiring example to other nations of the world of a country which had kept its foreign trade free of controls but also because these controls were instituted at a time when many other countries, including the United States, were relaxing their wartime trade restrictions and were planning to make every effort to end the remaining wartime controls at the earliest possible moment in the interest of the world trade expansion which is so necessary to the prosperity and peace of the world.

At the time the Peruvian system of import and exchange control was instituted, it was announced that the import permits were required in order to impede the entry into the country of de luxe articles, unnecessary articles, or articles which exceed the necessities of consumption. However, American exporters have complained that, in the operation of this import control, licenses for necessities such as pharmaceuticals have been refused while licenses for some luxuries have been granted. In addition, it has been reported by United States exporters that there has been discrimination in favor of Peruvian importing firms as compared with American and other foreign importing firms, and that licenses have been denied for the importation of products, not on the basis of a scarcity of exchange but because of competition with Peruvian products. It is understood also that imports have been impeded by delays in the granting of import licenses; import licenses have been denied without explanation of the reason therefor, and no lists of luxury or unnecessary goods have ever been published. Importers have therefore never known in advance whether or not their application for import licenses would be rejected, which has added to the expense of importers in placing orders abroad.

In addition to regretting the restrictive effect of such controls on the trade of the United States and other countries at a time when it would seem more appropriate for measures to be taken looking toward an expansion of world trade, the United States Government believes that the import restrictions should be considered by the Peruvian Government in the light of the pertinent provisions of the trade agreement between the United States and Peru.

Since the United States Government has accepted the proposal of the Peruvian Government that preliminary and confidential discussions regarding a new or revised trade agreement be undertaken soon, the question of the Peruvian exchange and import controls is of especial interest at this time, and it is hoped that the system of controls [Page 1354] may be considerably relaxed and that the import control, as distinguished from exchange control, may be removed before such discussions reach the end of the preliminary stage. The subject of exchange control will also necessarily have to be considered during the preliminary discussions.

Since it is understood that His Excellency’s Government is now giving consideration to revising its system of import control, the Acting Secretary of State would appreciate it if His Excellency would convey to his Government the sentiments set forth above.