The Minister in Guatemala ( Hanna ) to the Secretary of State

No. 258

Sir: With reference to the Department’s telegram No. 24 of July 17 expressing its desire to begin exploratory conversations with regard to the conclusion of a reciprocal trade agreement between the United States and Guatemala, I have the honor to report that the Minister for Foreign Affairs in conversation with me this morning confirmed my previous impression reported in my telegram No. 47 of July 18, 10 a.m., and my despatch No. 247 of July 16, 1934, that it would be agreeable to this Government to begin such conversations.

I informed Licenciado Skinner Klee of the Department’s readiness to enter into exploratory conversations and its desire that they should commence not later than September 1st. The Minister expressed himself as being heartily in favor of opening such conversations and informed me that he is only waiting some more definite advice concerning the real intentions of Germany relative to the threatened imposition of a coffee quota before committing his Government to a definite date for the opening of conversations. He added, however, that in all probability September 1st would be a satisfactory date.

In the course of our conversation, Dr. Skinner Klee stated that he felt that regardless of the difficulties which had arisen recently with Germany and France as well as other trade complications to the disadvantage of Guatemala, he was strongly of the opinion that Guatemala should have a special trade agreement with the United States which would intensify their commerce and especially give to Guatemala a larger market for its products in the United States. He said that Guatemalan imports from Japan were now at the rate of approximately $70,000 per month and that Japan purchased practically nothing of Guatemala. He said this was a condition which should not be permitted to continue indefinitely. He added that the merchandise being imported from Japan is of decidedly inferior quality but that it would take Guatemalan consumers sometime to learn this and that the absurdly low prices for this merchandise are a tremendous inducement to the purchaser.

The Minister then went on to observe that Guatemalan coffee, bananas and chicle enter the United States free of duty and he seemed to think that there is not much probability that a duty will be imposed on them. At the same time he appeared to recognize that an assurance that these products would continue to enter the American market free of duty would furnish a guarantee for the future which would be of value to Guatemala. I told him that it is to be presumed [Page 285] that my Government would endeavor to negotiate trade agreements with the other Latin American countries and that, although it may not be probable, it is possible that circumstances would arise in such negotiations which would make it desirable for my Government to offer special inducements to some other coffee producing country for the importation of its coffee into the United States. I told him that I was saying this without any information from my Government to that effect, and that I was sure he would understand that I was not implying anything in the nature of a threat but was merely pointing out a common sense view of the matter which Guatemala should not overlook. I told him that I felt confident that it is the desire of my Government, and that certainly it is my own, that any special trade arrangement with Guatemala should be for the mutual benefit of both countries, and that he could count on our effort to make the arrangement of benefit to Guatemala.

In connection with the foregoing Dr. Skinner Klee told me that Dr. López3 when here had not seemed to be pleased with the proposed trade arrangement between the United States and Colombia4 and had expressed doubt as to whether it would be acceptable to his Government when it is inaugurated.

The Minister, as on former occasions recently, expressed himself as being unqualifiedly of the opinion that a special trade agreement should be and can be made between Guatemala and the United States which would be to their mutual advantage. As heretofore, he expressed himself as strongly of the opinion that Guatemala should broaden the market for its products in the United States and should purchase a greater percentage of its importations in the market of the United States.

Respectfully yours,

Matthew E. Hanna
  1. President of Colombia.
  2. See pp. 66 ff.