611.3131/27a
The Acting Secretary of State to the Minister in Venezuela (Cook)
Sir: This Government has, as you are aware, entered upon the policy of negotiating with other countries general treaties of friendship, commerce and consular rights, of which the central principle in respect of commerce is an unconditional most-favored-nation clause governing customs and related matters.1 This policy was inaugurated pursuant to the principles underlying Section 317 of the Tariff Act of 1922;2 it seeks assurances that equality of treatment for American commerce will be maintained in all countries. Besides the provisions relating to trade and commerce these treaties include provisions relating to rights of nationals of each country in the other country, protection of property and rights and immunities of consuls. This Government now desires to enter into such a treaty with Venezuela.
The first treaty to become effective expressing the present policy of this Government was the Treaty of Friendship, Commerce and Consular Rights with Germany, signed December 8, 1923;3 ratifications of which were exchanged October 14, 1925. Similar treaties have been signed by the United States with Hungary, Esthonia and Salvador, of which the one with Esthonia has been brought into force by exchange of ratifications.
Treaties containing the unconditional most-favored-nation clause were signed with Turkey on August 6, 1923, and with Panama on July 28, 1926.3a Several others are in process of negotiation. Modi vivendi, based upon the same principle, entered into with the following countries are in force—Brazil, Czechoslovakia, Dominican Republic, Finland, Greece, Guatemala, Latvia, Lithuania, Nicaragua, Poland, (including Danzig), Rumania and Turkey. A similar agreement [Page 821] entered into with Haiti on July 8, 1926, becomes by its terms operative October 1, 1926.
Two copies of the treaty of December 8, 1923, with Germany are enclosed.4 You are requested, unless you perceive objection, to inquire whether it would be agreeable to the Government of Venezuela to proceed to the negotiation with the United States of a similar treaty. A special draft of treaty will, of course, be prepared for presentation to Venezuela if this proposal is acceptable to the Venezuelan Government. That certain departures from the text of the German treaty should be made is obvious. For instance, Articles XIV and XV would not be necessary in a treaty with Venezuela in view of the existence of the Convention Facilitating the Work of Traveling Salesmen signed by Venezuela and the United States on July 3, 1919,5 ratifications of which were exchanged on August 18, 1920.
It may be useful for you to bear in mind that in adopting the unconditional in place of the conditional most-favored-nation clause the United States has brought its commercial policy into accord with that prevailing among important commercial countries. It would be gratifying if, among its early treaties embodying this principle, the United States could celebrate a general commercial treaty with Venezuela. The lack of a general commercial treaty with Venezuela since the treaty of August 27, 18606 was terminated on October 22, 1870, is a matter of regret to this Government and it hopes that a comprehensive modern agreement may now be entered into. It is glad to note, in the Legation’s despatch No. 263, of December 7, 1922,7 the statement that the Minister of Foreign Affairs was at that time perfectly willing to enter into negotiations for a general commercial treaty. You should keep in mind in this connection, however, that a most-favored-nation clause with a condition such as that contained in Article IX of the Treaty of 1860 would not be acceptable.
Though the Department, in proposing a treaty with Venezuela, is influenced chiefly by its policy of concluding with other countries generally treaties containing the unconditional most-favored-nation clause, you are nevertheless desired to use especial diligence in seeking a favorable response from the Venezuelan Government and so forestalling any efforts that other countries may be planning to make for the purpose of interposing in South America arrangements based upon special privilege—a policy wholly antagonistic to the policy of equality of treatment which the United States is undertaking [Page 822] to promote. You may recall in this connection that in 1923 this Government renounced the preferential customs treatment which certain American products had been receiving in Brazil and requested instead a pledge of equal footing with other countries in the Brazilian market.8
For your strictly confidential information and guidance the Department has been informed of a movement on the part of Spain to seek from the countries of Latin America special commercial concessions in return for certain advantages to be accorded to their commerce in Spain. In this connection see the Department’s circular instruction dated April 19, 1926.9
For your further confidential information the Department has received from the Honorable Felix Cordova Dávila, Resident Commissioner of Porto Rico, a letter to him dated April 30, 1926, from Mr. Manuel V. Domeneck, National Counsellor of the Chamber of Commerce of the United States for Porto Rico, on the subject of Venezuelan discrimination against goods from Porto Rico through the levy of a thirty per centum additional customs duty. A copy of the letter is enclosed.9 You will recall in this connection the Department’s instruction No. 763 of November 18, 1922, the Legation’s despatch No. 263 of December 7, 1922,10 and other correspondence.
It then seemed probable that the removal of the additional duties applicable to shipments from Porto Rico and West Indian colonial areas would operate to the advantage chiefly of Trinidad and Curacao and might injure rather than help continental American trade with Venezuela. It is felt, however, that goods of the United States mainland and of the island of Porto Rico ought to be alike regarded as American goods, regardless of the port from which they are shipped to Venezuela, and that discrimination against such goods, as by means of a thirty per centum additional duty when they are shipped from San Juan, would seem to be actionable under the provisions of Section 317 of the Tariff Act of 1922, which authorizes the President to levy additional duties upon imports from countries that discriminate against the United States.
The Department believes that, if Venezuela should become party to a treaty with the United States containing language such as that of Article VII of the American-German Treaty, the thirty per centum additional duties would become inoperative in respect of Porto Rico and the Virgin Islands of the United States. Since Venezuela appears to be primarily interested in discouraging imports from Trinidad and Curacao, the decree of 1882 might, it would seem, be left in effect except as to the territory to which the treaty would be applicable. [Page 823] Thus it seems possible, through the proposed treaty, not only to carry out, in respect of Venezuela, the general commercial policy of this Government and to obtain for Porto Rico the desired equality of treatment for its products entering Venezuela, but also to accomplish these things without causing Venezuela to alter its attitude toward importation from Trinidad and Curacao.
The Department is of the opinion that goods transshipped at a foreign port without passing through the foreign customs retain their character so far as the country of origin is concerned. Hence, under the most-favored-nation clause, it would neither relinquish the claim of its own goods for most-favored-nation treatment when shipped indirectly nor ask for foreign goods such treatment when merely transshipped at San Juan, St. John or any other of its ports.
The Department either has transmitted or expects at an early date to transmit instructions similar to the present instruction to the American missions in the other South American capitals except Panama, with which as stated a treaty has been signed, and Ecuador, the political régime now functioning in which is not recognized by the United States.
I am [etc.]
- See Foreign Relations, 1923, vol. i, pp. 121 ff.↩
- 42 Stat. 858, 944.↩
- For treaties and modi vivendi referred to in this instruction and not cited therein, see footnotes to similar instruction, No. 1162, Aug. 21, 1926, to the Ambassador in Brazil, Foreign Relations, 1926, vol. i, p. 569.↩
- The treaty with Panama, however, does not contain the unconditional most-favored-nation clause.↩
- Foreign Relations, 1923, vol. ii, p. 29.↩
- Ibid., 1919, vol. i, p. 45, footnote 47.↩
- Malloy, Treaties, 1776–1900, vol. ii, p. 1845.↩
- Not printed.↩
- See Foreign Relations, 1923, vol. i, pp. 453 ff.↩
- Not printed.↩
- Not printed.↩
- Neither printed.↩