Foreign Relations of the United States, 1955–1957, American Republics: Central and South America, Volume VII

547. Memorandum of a Conversation, Department of State, Washington, October 3, 1955¹

Washington, October 3, 1955

SUBJECT

• U.S. Countervailing Duty on Uruguayan Wool Tops

PARTICIPANTS

• Ambassador Mora, Embassy of Uruguay
• Señor Bermúdez, Minister Counselor, Embassy of Uruguay
• Mr. Lyon, Acting Assistant Secretary
• Mr. Havemeyer (OSA)

Ambassador Mora handed an aide-mémoire, dated October 3, to Mr. Lyon.² The Ambassador stated that he had also given an identical aide-mémoire to Mr. de Beers in Treasury earlier in the day. Mr. Bermúdez said that the new aide-mémoire included the new exchange rates which apply to wool and other export and import commodities. Furthermore, the Embassy, in this case, was not using the “adicionales” or subsidies on the three items including wheat and meat in the effective exchange rate of Uruguay. This problem had been an item of difference between the Embassy and the officials of the Treasury Department since delivery of the June aide-mémoire to the Treasury.³

Mr. Lyon thanked the Ambassador for the aide-mémoire and said that it would be given strong consideration in the Department and that he would endeavor to assist the Treasury Department⁴ in any way in its computation which might result in the removal of the countervailing duty on Uruguayan wool tops. He added, that he hoped that the duty could be removed prior to the visit of the President of Uruguay in early December.

(After the above meeting, Mr. Havemeyer spoke to Mr. Hendricks in Treasury⁵ who said that Mr. de Beers had left for two years work in Porto Rico, and Mr. George Willis would assume the responsibility of handling the Uruguayan countervailing duty in Treasury at the working level. Mr. Hendricks said he hoped Treasury can take Uruguay “off the hook”.⁶ Mr. Havemeyer is to phone Mr. Hendricks later this week for further information with respect to the restudy of the effective exchange rate system of Uruguay as it affects Uruguayan wool tops and the U.S. countervailing duty.)

1. Source: Department of State, Central Files, 411.334/10–355. Limited Official Use. Drafted by Havemeyer.
2. This aide-mémoire presented the case for removal of the U.S. countervailing duty on Uruguayan wool tops. (Ibid.)
3. Not printed. (Ibid., 411.334/8–855)
4. In a letter of October 14, Secretary Dulles informed the Secretary of the Treasury as follows: “The Department of State has a particular interest in the possible removal of the United States countervailing duty on Uruguayan wool tops because of the impending visit of the President of Uruguay to the United States in early December. The United States countervailing duty, since it was imposed, has been a source of strain on the economic and political relations between Uruguay and the United States.” (Ibid., 411.334/9–2155)
5. James Hendricks, Assistant to the Assistant Secretary of the Treasury.
6. In his letter of February 7, 1956, to Secretary Dulles, Assistant Secretary of the Treasury David W. Kendall suggested that the Department answer the Uruguayan Government by stating that the 6 percent rate of countervailing duty then in effect continued to represent an appropriate estimate of the bounty available to Uruguayan exporters of wool tops under the exchange practices in Uruguay. The Treasury Department’s decision was not reached until after the most careful analysis of the presentation made by the Uruguayan Embassy, and after informal consultation with the Uruguayan Embassy. (Department of State, Central Files, 411.334/2–756)