711.162/6
The Chargé in Salvador (Muse) to the Secretary of State
[Received October 9.]
Sir: I have the honor to refer to the Department’s instruction No. 125, of August 28, 1924, directing that I endeavor to effect an exchange with the Minister of Foreign Affairs of notes, similar to a draft enclosed in the instruction, establishing unconditional most-favored-nation treatment as between the United States and Salvador in commercial matters.
I have discussed the matter with the Minister of Foreign Affairs and left with him a copy of the draft. He informed me that the matter would have to be studied by the Department of Finance before the Government could decide as to its willingness to enter into such an agreement. At this writing the Department of Finance has not yet reported the result of its examination and the matter is still in suspense.
In further conversations with the Minister of Foreign Affairs he has advanced several objections to the arrangement on the part of Salvador. In the first place, he desires to have the modus vivendi concluded for a definite period and desires to have extended the period which must elapse after the notification of a desire to terminate before the actual termination shall take effect. This he bases upon the fact that, whereas the United States will, upon the conclusion of the arrangement, begin to enjoy at once certain most-favored-nation privileges in the way of tariff reductions on imports into Salvador, Salvador will not at first enjoy any special privilege and will risk having the arrangement terminated one month after the first tariff reduction which may be made in her favor by the United States. He suggests concluding the modus vivendi for a period of two years or more, denunciable six months after notification which may be made after the termination of the period fixed.
I have informally expressed my opinion that the Department possibly would not object to changes in the wording of the notes with regard to the duration of the arrangement and the mode of termination, and that I might possibly secure the permission of the Department to proceed in this sense.
The Minister of Foreign Affairs objects very strongly to the provision of the note which excludes Cuba from consideration among the most-favored-nations as regards imports into the United States. He states that his Government is very desirous to secure equal treatment with Cuba for its large competitive export of sugar. I have, of course, pointed out that the note reciprocally excludes the commerce of Guatemala, Honduras, Nicaragua, and Costa Rica from [Page 917] consideration in determining the treatment to be accorded American imports into Salvador.
The Minister of Foreign Affairs notes that Salvador has no most-favored-nation treatment at present to be gained from the United States, while the exchange of such notes would give American imports into Salvador certain special privileges now accorded by treaty to France. This treaty of 1903, amended by an exchange of notes in 1923, grants certain reductions on the imports of French perfumes, toilet articles, etc., into Salvador in exchange for special treatment accorded the Salvadorean export of coffee, cotton, and sugar into France. It appears that the principal interest of the Department of Finance in its present study of the proposal is to ascertain the extent of the possible decrease in the customs revenue of Salvador which might result in making the tariff reductions accorded to French imports applicable in like matter [manner?] to the imports from the United States.
I should add that my conversations hitherto have been entirely informal, and that the above-mentioned observations and suggestions of the Minister of Foreign Affairs are not to be taken as an official reply of the Salvadorean Government.
I have [etc.]