The Secretary of State to the Ambassador in Cuba (Caffery)
Sir: Reference is made to your despatch No. 399 of May 4, 1934,56 enclosing a memorandum from the American technical advisers concerning the form of the proposed trade agreement with Cuba.57 This memorandum suggests that the new trade agreement be limited primarily to changes in percentages of preference and to the binding of maximum United States rates on specified articles, which would be made possible if the Cuban Government, immediately prior to the signature of the new agreement, should put into effect by Executive decree changes agreed upon in tariff numeral, nomenclature and United States rates of duty.
Since the trade agreement is to be the basic instrument governing the commercial intercourse between the two countries, I believe that the annexed schedules, a draft of the form of which is attached hereto,56 should be prepared along the following lines.
- All items having a percentage of preference of 20 percent (unless bound as to rate or involving change in nomenclature) will not appear in the schedules, said items being covered by basket clauses inserted appropriately in the general provisions.
- All items having a percentage of preference of more than 20 percent will appear in the schedules, as 20 percent for which bound rates are pledged or whose nomenclature has been amended. The tariff numeral, nomenclature and preference, will be stated for each item. In the case of those items for which bound rates are pledged, such rates will appear in the schedules. Unbound rates will not be listed.
- The preference and rate columns will be parallel, column 1 showing the percentage of preference, and column 2, the rates which are bound as to maxima.
- Schedules should be prepared in both English and Spanish.
It is realized that this procedure will necessitate long schedules, but the detail involved seems preferable to misunderstandings and confusion in the future.
At the same time the prior decree law by the Cuban Government is not only desirable but necessary to accomplish the following ends:
- To put into effect increases in general rates.
- To secure the elimination of subsection (1) Section (a) and Sections (g) and (h) of Article 7 of the General Provisions of the Cuban Customs Tariff of 1927, which refer to table of valuations.
- To secure amendments to Rules 1, 6, 7, and 9 of Provision 3 for the application of the Cuban Customs Tariff of 1927 in order specifically to except the application of these rules to containers of all kinds for merchandise subject to ad valorem duties.
- To secure an amendment to the Cuban Customs Tariff and pertinent laws and regulations providing that import duties shall be quoted and payable only in pesos. This is contingent upon the inclusion in the general provisions of an article regarding compensatory surtaxes offsetting currency depreciation.
- To secure the inclusion of a note to 260–A providing that all seed potatoes must be imported cut in pieces. It will be recalled that the Cuban authorities have indicated a willingness to do this (your despatch No. 76 of March 14, 193458).
Very truly yours,