The Acting Secretary of State to the Chargé in Guatemala ( Lawton )

No. 9

Sir: Reference is made to your despatch 1024, September 9, and the Department’s instruction 303, September 26, 1933,1 regarding the desire of Guatemala to open conversations with the United States with a view to concluding a commercial treaty.

This Government is now prepared to enter into exploratory conversations regarding the possibility of negotiating a reciprocal trade agreement. The Department desires that these conversations take place at Guatemala and accordingly you are requested to take up the matter with the Minister of Foreign Affairs. You may suggest to him that these conversations might proceed on the following basis:

Since over 90 percent of the imports into the United States from Guatemala consist of coffee and bananas, which are admitted free of duty, the agreement might fairly provide that this Government would continue to accord free entry to these products in return for concessions by Guatemala on products imported from the United States. It is possible that in the course of the exploratory conversations Guatemala may wish to bring to the attention of the United States other products in addition to bananas and coffee on which concessions would be desired. While sympathetic consideration would be given to any such proposals, it is believed that in view of the importance of coffee and bananas in Guatemala’s trade with the United States a guaranty of continued free entry of these products would be equivalent in value to concessions by Guatemala on the principal products imported from the United States.

With reference to the Foreign Minister’s suggestion regarding sugar this Government is not at this time in a position to indicate whether any provision could be made regarding the treatment of this product. In regard to his suggestion concerning a loan or credit facilities as a quid pro quo by the United States, this Government could not entertain any proposals of this kind.

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In addition to provisions of the character indicated above, the trade agreement might provide for unconditional and unrestricted most favored nation treatment, subject to the usual exception regarding Cuba, and other generally recognized exceptions; provision against quantitative restrictions (quotas) on imports of products respecting which tariff concessions are granted by each party under the agreement; provision against increased internal taxes on such products; and national treatment with respect to internal taxes on all products.

If the Foreign Minister is prepared to begin exploratory conversations along the general lines indicated the Department will send you as soon as possible a statement regarding the concessions which would probably be requested by the United States.

You should make it perfectly clear that the intention of this Government is solely to explore the situation to determine whether negotiations, if undertaken, would be likely to meet with success.

Very truly yours,

For the Acting Secretary of State:
Francis B. Sayre
  1. Neither printed.