711.342/4

The Minister in Paraguay ( Kreeck ) to the Secretary of State

No. 227

Sir: With reference to the possibilities of a new commercial treaty;with Paraguay, the Department will recall that I had the honor, on October 5th, 1926, to advise by cable such was possible, cautioning that the text should be forwarded to me quickly, while the attitude was most favorable. Upon January 1st, 1927, by cable,17 I again asked for the treaty.

With today there comes the public declaration of the National Chamber of Commerce of its opposition to new treaties incorporating “the most favored nation clause”, and urging that the Government demand the exclusion of such, or the modification of the clause, or to refuse to enter the negotiations. It is contended that Paraguay must, for economic reasons, have from Argentina special consideration, which must be protected.

There is set forth, in the argument against the inclusion of such a clause, the action of Uruguay in its treaties with France, Germany and England, modifying the clause, interpreting it to exclude “any advantages by treaties, of whatever date, entered into between Paraguay, Argentina and Brazil.” Likewise they set forth the action of Chile in refusing to enter such treaties, without special consideration being given to those nations upon whom its economic life is somewhat dependent.

It is regretted the text is so late in arriving, for without a doubt, active opposition from the Paraguayan National Chamber of Commerce will enter into the negotiations.18

I have [etc.]

Geo. L. Kreeck
  1. Not printed.
  2. No draft treaty was presented to the Paraguayan Government and negotiations were discontinued.