The Chargé in Portugal (Magruder) to the Acting Secretary of State

No. 1015

Sir: In pursuance of the Department’s telegraphic instruction No. 9 of July 29, 2 P.M.,4 directing me to prepare a report containing specific suggestions regarding tariff reductions or similar concessions which might profitably be requested of Portugal by the United States, as well as suggestions regarding like concessions which might be expected of the United States by Portugal, I have the honor to submit the following report.

The abandonment in principle of the policy of levying discriminatory duties announced by the Portuguese Government under the terms of [Page 642] Decree No. 20, 304 of September 12, 1931,5 affords ground for asking Portugal to render effective in fact the abolition of discriminatory rates to which she is committed. In this connection, reference is made to the Legation’s despatch No. 783 of January 4, 1933,6 and to previous despatches on the subject of flag discrimination, particularly despatch No. 496 of November 7, 1931,7 despatch No. 515 of December 1, 1931,6 and despatch No. 524 of December 17, 1931.6 At the same time, there is ground for making an effort to bring about the abolishment of flag discrimination on the part of the Portuguese colonies, in accordance with the desire expressed by the United States Shipping Board, as set forth in the enclosure to the Department’s instruction No. 177 of February 1, 1933.6

Inasmuch as the United States now enjoys unrestricted Most Favored Nation Treatment in Portugal, any concessions sought of Portugal on the basis of reciprocal concessions will presumably be in the nature of a reduction in the rates applicable to specific items or in the nature of a reclassification affecting certain items. Reductions might profitably be requested in respect of cotton, wheat and machinery, while a reclassification in respect of automobiles so as to favor the importation thereof rather than that of light-weight French, British, and Italian cars would appear to be most desirable, particularly, inasmuch as the foreign cars in question have been enjoying the benefit of a classification on the basis of weight which has enabled them to compete with American cars on advantageous terms. On the other hand, the United States has accorded very favorable customs treatment to Portugal, as is well shown by the memorandum by the Commercial Attaché which accompanied the Legation’s despatch No. 546 of January 18, 1932.6 It may be worth the Department’s while to refer to this memorandum.

With regard to the concessions which Portugal may be expected to request of the United States, I do not hesitate to express the opinion that the first and foremost of these will relate to the wine industry. Portugal is committed to a commercial policy wherein paramount importance is attached to the protection of her wine trade. During the course of the past three and a half years, there have been concluded no less than thirteen commercial agreements between Portugal and other countries providing special protection for Portuguese wines. Reference to the Legation’s despatch No. 720 of October 1, 1932,6 will show that in one of the most recent of these agreements Cuba undertook to permit the importation, [Page 643] consumption and sale of all Portuguese wines of an alcoholic content not exceeding twenty-one degrees and to extend thereto most favored nation treatment, aside from that enjoyed by the United States. She recognized “Porto”, “Madeira”, “Moscatel de Setubal” and “Carcavelos” as marks of origin belonging exclusively to the wines produced in the Portuguese regions indicated and prohibited the importation, storage, exportation, manufacture, transportation, sale or offer for sale of wines so designated other than those originating in the aforesaid Portuguese regions. Furthermore, she undertook to apply these provisions even though the foregoing marks of origin were followed or preceded by an indication of the true place of origin or by such expressions as “type”, “kind” or “quality”. If the United States is not prepared to concede to Portugal protection for her wines as ample as this, there would appear to be little likelihood of obtaining from Portugal any concessions worth while. The existing commercial dispute between Portugal and France has virtually closed the French market to Portugal, with the result that it is the more essential that she should find an outlet for her wines elsewhere, particularly inasmuch as the wine trade has a vital bearing on the prosperity of the country. That the United States is likely to become more addicted to wine-drinking than ever before is a consideration which might well serve as an inducement to Portugal to make additional concessions.

Cork is another commodity for which Portugal may conceivably ask favorable treatment. Reference to the Legation’s despatch No. 47 of May 13, 1930,8 will show how deeply concerned Portugal is over any proposed increase of the customs duties levied on cork and on articles manufactured therefrom, regardless of the circumstance that, on January 6, 1930, the Portuguese Government promulgated a new customs tariff by virtue of which the customs duties on practically all of the most important articles of export from the United States to Portugal were very materially increased.

Finally, the importance of the Portuguese sardine packing industry and the difficulties it has recently encountered may possibly lead Portugal to request concessions in respect of the duties levied on preserved sardines.

I have the honor to enclose herewith a copy of a letter from the Consul General in Lisbon8 covering a memorandum containing such pertinent information on the subject in question as he has been able to submit. I can add nothing further, other than the doubtless superfluous suggestion that any concessions obtained from Portugal with regard to her colonial possessions be embodied in specific commitments incapable of varied interpretation and the suggestion that it may be well to ask for a guarantee [Page 644] against quotas and similar restrictions, particularly in respect of automobiles.

Respectfully yours,

Alexander R. Magruder
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  2. Foreign Relations, 1931, vol. ii, p. 967.
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  4. Foreign Relations, 1931, vol. ii, p. 972.
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