611.5231/933
Memorandum by the Assistant Chief of the Division of Western European Affairs (Hickerson)
The Spanish Ambassador came in today to continue the general conversations respecting trade agreement negotiations. The Ambassador said that he’d be gratified with the list of products which Mr. Sayre handed him on the 24th but he observed that this list covers only a fractional part of the list of products on which Spain has asked for concessions. It was pointed out to him that the list which was handed him the day before yesterday covers nearly all Spain’s principal exports to the United States, and that Spain has requested concessions on a number of products where she is a minor source of supply. At the same time it was added that as stated the day before yesterday, it may be possible to consider additional concessions to Spain during the negotiations and that the list which was handed him was by no means intended to be a complete list.
The Ambassador commented on our note of January 16 which enclosed our desiderata, and said that he was not sure that his Government could acquiesce in some of the general provisions which we referred to in that note. He mentioned particularly the quota article and the article respecting internal taxation. He also commented that Spain has in no way discriminated against the United States in the allocation of foreign exchange, adding that if we visualized a general provision providing against discrimination in the allocation of exchange his Government would probably have no difficulty in accepting it, but that they would have difficulty in acquiescing in any provisions for stipulated quantities of exchange to be allocated. It was suggested to the Ambassador that we defer discussing these matters until our standard general provisions could be communicated to him some time next week. The Ambassador concurred in this.
The Ambassador again stressed the undesirability from the standpoint of both Spain and the United States, of concluding an agreement which would increase American exports to Spain more than it would stimulate Spanish exports to this country. He continued that such an agreement would bring about exchange difficulties so great that it would probably break down in a few months, even if Spain could be persuaded to sign it.