Memorandum by the Assistant Chief of the Treaty Division (McClure)

Colombia: Reciprocity Negotiations—First Meeting of the Experts

A proposal for a reciprocity agreement having been submitted by the United States to Colombia, and a counterproposal having been received and replied to, the reply of the United States, consisting of a draft agreement with annexed schedules, became the basis for further discussion. The first meeting of experts for this purpose took place in the conference room (No. 277), Department of State, Tuesday, October 31, 1933, 10:00 a.m.

The Colombian experts requested that, prior to the discussion of details article by article, there should be general consideration of certain points. These were— [Page 239]

Their inability to reduce duties on agricultural products.
Their desire to continue certain minor charges collected in their customs houses in addition to ordinary customs duties.
Their insistence that there should be no internal revenue duties in the United States upon roasted coffee.
The inability of their cities to dispense with octroi, falling solely on imported goods.
Their preference for the conditional most-favored-nation clause.

This request was at once agreed to.

(1) the agricultural schedules

In their counterproposal, submitted following the original American proposal, the Colombians eliminated the duty reductions upon agricultural products. The American reply restored these with certain changes. The Colombians stated that the domestic agricultural situation, the desire for self-sufficiency in foodstuffs during these troubled times, and the general understanding that the agreement was to deal only with non-competitive products, made it necessary for them to remove all agricultural products from the list of goods upon which reductions in the Colombian tariff would be made. They stated with much positiveness that this was an absolute requirement.

The United States experts answered that, in entering upon a program of reciprocity agreements, of which the one under consideration was to be the first, their government considered that one of its two or three fundamental policies consisted in obtaining, by virtue of each agreement, some provision that would encourage the exportation of agricultural products; that this was necessary for reasons both economic and political; that such agreements would hardly obtain the approval of Congress should any one fail to include agricultural concessions; that agriculture was the greatest industry of the United States; that the principal single item in the treaty would be free trade in the leading Colombian agricultural product, and that an instrument designed so fundamentally to safeguard the markets of Colombian farmers must promise a market for farmers of this country.

It was agreed that each side would consider this proposition further with the idea of endeavoring to work out a basis acceptable to both.

(2) minor duties collected in colombian customs houses

The second point raised by the Colombians was concerned with Article I of the draft agreement. They stated that there were certain incidental duties leviable in the Colombian customs houses which would fall within the definition of “customs duties”, as the expression is used in Article I, but with which it had not been intended to interfere as a result of the agreement. These duties are very small and [Page 240] apparently this Government can be content if they are kept stationary, though in addition to the duties named in the schedules. Accordingly, the Colombians were informed that an endeavor would be made to draft the agreement so as to meet their wishes in the matter.

(3) united states internal revenue duties on roasted coffee

The third point raised by the Colombians grew out of the provision of Article IV which accords national treatment with reference to internal duties. The Colombians were concerned, in the first place, with the question whether the green coffee imported into the United States, when roasted and placed on sale, might not be subject to duties, levied by the states or otherwise, which would seriously reduce the benefit of the original free importation.

They were informed that this Government would give sympathetic consideration to this point and would examine into the legal aspects of the case with a view to finding out what could be agreed to.

(4) colombian municipal octroi

With respect to municipal duties on goods entering cities, the Colombians stated that it would be very difficult indeed to accord national treatment, as required by Article IV, because of the fact that these duties were important to various municipalities from the revenue standpoint and because for a long time there had been levies upon Colombian imported products.

It was insisted on the part of the United States that such duties were out of line with modern treaty provisions and that the Colombian system ought to be changed. Should it not be changed the benefits of reductions in the customs houses might be entirely obliterated by discriminating local taxes.

The eventual attitude of Colombia in regard to this point may be influenced by the reply of the United States with reference to internal duties on roasted coffee.

(5) the most-favored-nation clause

The final point raised by the Colombians dealt with the most-favored-nation clause. They stated, as was to be expected in view of the provisions of their counterproposal, that the most-favored-nation clause should be conditional. They intimated that they would be very glad to set up a preferential regime with the United States and stated that they did not wish to be bound to European countries by most-favored-nation treaties; those existing might in due time be terminated. In this connection, it may be noted that one of the agricultural duty reductions asked for by the United States, namely, rice, comes into Colombia in larger quantities from Germany than from this country.

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While expressing due appreciation for the Colombian attitude in the foregoing matter, it was stated on behalf of the United States that this Government was bound by many treaties with different countries in all parts of the world and that it held as a fundamental conception that equality is the most appropriate basis for commercial treaties. Accordingly, it would necessarily insist upon the maintenance of the unconditional most-favored-nation clause in the agreement under consideration and in its treaties generally. It was apparent that the Colombians would not hold out in their opposition, but would agree to the unconditional most-favored-nation clause.

The following were present as representatives of Colombia:

Sr. Miguel López Pumarejo, Representative in New York of the National Association of Coffee Growers (of Colombia);

Dr. Francisco Restrepo Plata, President of the Supreme Customs Tribunal of Colombia;

Dr. Arturo Hernández, Member of the Supreme Customs Tribunal of Colombia;

General Alfredo de León, Secretary.

Mr. McClure, Mr. Matthews, Mr. Hawkins and Mr. Leap, of the Department of State, and Mr. Donnelly of the Department of Commerce were present as experts for the United States.

The next meeting will occur in Room 277 on Friday morning, November 3, at 10:00 o’clock.

W[allace] Mc[Clure]