The Chargé in Argentina (White) to the Secretary of State
[Received January 4, 1932.]
Sir: I have the honor to refer to the Department’s instruction No. 517 of November 13 (635.003/189)3 directing me to bring to the attention of the Argentine Government that Article 2 of the Argentine decree of October 6, which exempts from increase of duties rough sawn South American white pine lumber in planks and boards from the increased duties applied to other kinds of lumber, appeared to constitute a discrimination against American lumber not justified by the pertinent provisions of the treaty of amity and commerce between Argentina and the United States of 1853.
As of date December 7, I visited the Minister for Foreign Affairs and left with him a memorandum setting forth the terms of the decree, the pertinent portions of the treaty, and requesting that the discrimination be removed. The Minister promised to give me an answer.
Meantime certain events have occurred which might seem to give this matter a more serious aspect. As reported on page 9 of the Embassy’s despatch No. 14355–G, of December 18,4 the Provisional Government has issued a decree dated December 9 (see enclosures 1 and 1–A)5 supplemented by customs decree of December 11 (enclosures 2 and 2–A) according a fifty per cent rebate to birch ply wood of Finnish origin on the ground that Finland gave exemptions from duties to Argentine bran and derivatives. The Consul has reported in his despatch No. 538, of December 18,4 that this agreement is considered to be principally directed against the U.S.S.R. Other countries, however, are much affected, as, for instance, Germany. Article 4 of the German treaty of 1857 appears to be identical, as regards the unconditional most favored nation clause for imports, with Article 4 of our treaty of 1853, so that Germany should be entitled to invoke that clause, if so minded. According to my German colleague, the Government of that country has not yet sent him any instructions in regard to this matter. I also enclose an editorial from La Prensa, which is strongly free trade and which I suspect to have been partially inspired from German sources, that declares the decree to be of considerable and undesirable importance.[Page 382]
My German colleague seems disposed to see in this apparent disregard of the unconditional most favored nation clause a reflex of the condition created for the Argentine by the prospect of the application of a quota in Great Britain to imported wheat. This had also occurred to me as a possibility. He expressed his opinion in the course of a casual conversation that the Argentines hoped to obtain similar favors to those accorded the British Dominions, a supposition which finds confirmation in the remarks attributed to the Minister for Foreign Affairs in La Nación of December 22, copy and translation of which I enclose herewith, and more forcefully in the interview with The Standard.
Today I saw the Minister for Foreign Affairs and enquired of him whether he had any answer as yet to the memorandum in regard to South American pine above mentioned, which I had presented December 7. He replied in the negative, adding that the matter had been referred to a committee and that he hoped to have an answer for me possibly by Monday next. I then called his attention to the decree on ply wood and to its possible bearing on the subject of the most favored nation clause, as also to the remarks attributed to him by La Nación in regard to the treaty with Great Britain and asked him whether this portended any change in the Argentine interpretation of the treaty. Dr. Bioy said that the action contemplated by Great Britain was extremely serious. Great Britain was the leading customer of the Argentine and his Government had to satisfy both public opinion at home and also British public opinion, that they were desirous of doing their utmost to maintain the good commercial relations which had existed with that country for so many years. He said that the Argentine really was in a difficult position. I replied that I quite agreed with him, the more so in view of the terms of the reciprocity treaties. He assured me, however, that no change was contemplated for the present in regard to these.
My German colleague, who has been in London, does not believe that the Argentine will stand a chance of obtaining the same measure of preference as the British colonists, which seems likely enough …
In view of the situation as regards England, in which the Argentine finds itself, it would not at all surprise me if the attempt made by the Irigoyen Government in the case of artificial silk to accord the British preferential tariffs might not be renewed. At any rate, this is a possibility which must be kept in view. Further any concessions in favor of Argentine products, such as the lowering of the duty on caseine which might be accorded by the United States would seem to me to be distinctly timely.[Page 383]
The Argentine, it would appear, has had another blow to its exports in the matter of the French super tax of ten per cent on imported corn. I am informed that the Argentine Embassy in Paris had reported that the French Government was willing to remove this tax in favor of the Argentine (see despatch No. 1455–G of December 18, page 7) but that it later turned out that this was not the case.