710.G Commercial Agreement/88

The Chargé in Uruguay (Dominian) to the Secretary of State

No. 778

Sir: I have the honor to acknowledge the receipt of the Department’s instruction No. 285 of September 29 with reference to the agreement set forth in Resolution 81 of the Montevideo Conference whereby the contracting parties agree to refrain from invoking the obligations of the most-favored-nation clause in respect to certain multilateral conventions. The Department calls my attention to the language of Article I, which states that the High Contracting Parties, with respect to their relations with one another, will not invoke the obligations of the most-favored-nation clause. It may, therefore, be inferred that Uruguay would not be bound to refrain from invoking the most-favored-nation clause in any treaty unless the other party to the treaty, by virtue of its participation in the agreement under consideration, were so bound to refrain from the use of the clause.

A favorable opportunity presented itself yesterday to bring the text of Article I above mentioned to the attention of the Under-Secretary [Page 26]for Foreign Affairs, who is now at the head of the Ministry of Foreign Relations because of the absence on leave until the end of this month of the Minister of Foreign Affairs. I, therefore, availed myself of the authorization to discuss this matter further with the Uruguayan Government, contained in the Department’s instruction under acknowledgment, and expressed at the same time the appreciation of the Government of the United States for the cooperation of Uruguay in instructing its delegate at Geneva to support the action taken by the Belgian Delegation before the Second Committee of the Assembly of the League of Nations in bringing the subject of Resolution 81 of the Montevideo Conference before this Committee.

I pointed out to Dr. Ferreiro, the Under-Secretary, that the language of Article I enabled Uruguay to act with perfect freedom in dealing with other nations with respect to the most-favored-nation clause since the obligation not to invoke this clause was restricted to the contracting parties only in their relations with one another. I pointed out to Dr. Ferreiro, furthermore, that my understanding of the economic policy recently followed by Uruguay would lead one to suppose that the signing of the Montevideo agreement by Uruguay would be in perfect accordance with the position taken by his country in its recent treaty negotiations.

Señor Ferreiro appeared to agree completely. He pointed out that Uruguay favored mutual agreement to refrain from invoking the obligations of the most-favored-nation clause. All that his country desired, he said, was to have a free hand in its commercial negotiations with other countries because Uruguay disposed only of meat and some wool as the country’s products.

I told him once more that the signing of the Montevideo agreement could not change Uruguay’s position in respect of non-signatory nations or restrict its treaty bargaining power with them. He then said that he would give closer attention to the subject. As stated in my despatch No. 762 of September 27, 1934,19 Dr. E. E. Buero, the legal adviser on League of Nations affairs of the Ministry of Foreign Affairs, had been consulted on the subject of Uruguay’s position in the matter. This, Señor Ferreiro said, would have to be done again although he now felt sufficiently familiar with the subject to realize that the signing by Uruguay of the convention was entirely in keeping with the present commercial policy of Uruguay. He stated that he would not be able to give me a definite answer before the return of the Minister of Foreign Affairs, who was expected back at the Ministry sometime after the 20th of this month. In the meanwhile, he intended going over the matter with Dr. Buero again. I asked him to consider me as prepared to explore with him or with Dr. Buero [Page 27]any special point or phase of the subject which might arise in the course of his conversations with Dr. Buero. I doubt, however, that the matter can be taken up again before the end of the month as, in addition to the Minister of Foreign Affairs’ absence, Dr. Buero is now in Buenos Aires to attend the Eucharistic Congress in that city.

Before leaving, I made it a point to mention to Under-Secretary Ferreiro that it would be gratifying to count Uruguay among the first of the signers of the Montevideo agreement.

Respectfully yours,

Leon Dominian
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