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

No. 90

Sir: The receipt is acknowledged of your despatch No. 332 of September 5, 1934, reporting that the Guatemalan Minister for Foreign Affairs, in discussing with you the proposed trade agreement between the United States and Guatemala, stated that a concession which the United States might make would be to impose a duty on chicle and exempt Guatemala from its effect.

In its negotiation of trade agreements under the Trade Agreements Act of June 12, 1934,10 the Department does not contemplate departing from its policy of unconditional and unrestricted most favored nation treatment, subject to the usual exception regarding Cuba, and other generally recognized exceptions. Moreover, the authority conferred upon the Executive by the Trade Agreements Act does not extend to transferring tariff items from the free to the dutiable list, nor to effecting any tariff reductions on dutiable items in excess of fifty per cent. Inasmuch as chicle in its natural state is on the free list, it is evident that the only concession that could be granted would be one providing that this product should continue to be admitted free of duty. Furthermore, under the policy of most favored nation treatment this Government would not discriminate in favor of the product of one country as against the product of another unless the latter discriminated against the trade of the United States or unless the acts or policies of such country were such as to defeat the purposes of the Act.

In your conversations with officials of the Guatemalan Government on the subject of the proposed trade agreement you may make such use of the foregoing information as you may consider desirable.

Very truly yours,

For the Secretary of State:
Francis B. Sayre
  1. 48 Stat. 943.