The Secretary of State to the Ambassador in Cuba (Caffery)
Sir: With reference to your despatch No. 421 of May 8, 1934,38 transmitting a memorandum from the American Technical Advisers,39 requesting that they be authorized to accept increased preferences in those cases where the Cuban authorities are disinclined to reduce general rates, and to your telegram No. 298 of May 1838 on the same subject, the Department desires to offer the following comments:
1. The trade in each tariff item has been considered individually, and in each case the Department has suggested, after consideration of all factors involved, the treatment best calculated to bring about the desired expansion of trade between the United States and Cuba. In the greater number of cases increased preferences have been suggested, and in only a comparatively few cases decreased general rates. As a general rule the Department has been disinclined to accept increased preferences in cases where the United States enjoys a strong trade position. In such cases, and where the existing duties appear to be excessive, the best approach would seem to lie in decreased general rates.
2. There is attached hereto a copy of the reciprocal trade bill as amended by the Senate Committee on Finance.38 Your attention is [Page 139] directed to Subsection (b) of Section 350, as amended, reading as follows:
“(b) Nothing in this section shall be construed to prevent the application, with respect to rates of duty established under this section pursuant to agreements with countries other than Cuba, of the provisions of the treaty of commercial reciprocity concluded between the United States and the Republic of Cuba on December 11, 1902, or to preclude giving effect to an exclusive agreement with Cuba concluded under this section, modifying the existing preferential customs treatment of any article the growth, produce, or manufacture of Cuba: Provided, That the duties payable on such an article shall in no case be increased or decreased by more than 50 per centum of the duties now payable thereon.”
This amendment was carefully drafted in order that Cuban products entering the United States might be favored by decreased rates of duty, by increased preferences or by a combination of both. The form of the requested concessions is, of course, for the Cuban authorities themselves to determine. On its part, the Department will examine each request with the criteria previously mentioned in mind. You may find it desirable to call the above quoted provision to the attention of the Cuban authorities, making it clear to them, however, that the bill has not yet received Congressional approval. Once the Cuban authorities understand the Department’s approach, they may be more inclined to grant the reduced general rates requested.
As stated in the Department’s telegram of today’s date,40 the wisest course of procedure would seem to lie in maintaining our original proposals unchanged, at least until we have ascertained the Cuban reaction to all our requests. If the Cuban authorities remain inflexible in their decision not to grant reduced general rates in certain instances, we shall then have to reconsider our position and make the necessary adjustments.
Very truly yours,