611.3831/44
The Secretary of State to the Minister in Haiti (Armour)
Sir: There is enclosed a copy of a memorandum which was today handed to the Minister of Haiti,26 in regard to the exploration of the possibility of concluding a mutually advantageous trade agreement between the two countries. In accordance therewith you are instructed to explore the situation in consultation with the Haitian authorities with a view to submitting recommendations regarding the terms of such an agreement.
In considering the terms of a reciprocal trade agreement with Haiti it is necessary to keep in mind the relation of such negotiations to similar negotiations between the United States and other countries. In conformity with the principle of unconditional most favored nation treatment a concession by the United States on any given product [Page 311] of one country must be extended freely to the like product of other countries. Consequently it is necessary as a general rule in carrying out a reciprocity program to confine the concessions made to each country to products of which that country is an important source of imports into the United States. It is evident that if a concession were granted to one country on a product which is of outstanding importance to another, and if the latter by virtue of the most favored nation principle obtained the benefit of the concession freely, the basis for later negotiations with such other country would be impaired. Normally in such negotiations concessions will be confined to products of which each country is the chief source of imports into the United States. Statistical studies indicate that under such a plan an ample basis for bargaining with the most of the important countries of the world could be maintained.
However, a preliminary survey indicates that the only important product of which Haiti is the chief source of imports into the United States is logwood, which is at present free of duty. This Government might therefore undertake in the proposed agreement that no duty shall be imposed on this product. With respect to such products as coffee and bananas on the other hand, the situation is different. Other countries are far more important as sources of imports of these products than is Haiti and if the United States undertook in an agreement with Haiti that coffee and bananas should continue to be free of duty the basis for bargaining with Brazil, Honduras and other countries might be impaired. Consequently if such products as coffee and bananas were dealt with in the proposed agreement it would probably be necessary to postpone actually bringing the agreement into force until agreements have been negotiated with other countries interested in these products.
In view of the foregoing considerations two alternatives present themselves as follows:
- 1)
- The proposed agreement might contain commitments by the United States respecting only those products of which Haiti is the chief source of importations into the United States. Such an agreement could be brought into force independently of agreements to be negotiated between the United States and other countries. If an agreement along these lines were decided upon a careful study should be made of Haiti’s production and trade with a view to determining whether there are any special products, other than logwood, of which Haiti is, or is likely to be, the chief foreign source of importations into the United States. While such an agreement would probably directly benefit only one Haitian product this Government would be prepared to renew in the proposed agreement the provision for general unconditional most favored nation treatment contained in the Executive Agreement signed July 8, 1926.27 Thus, Haiti would be assured [Page 312] of the benefit of concessions or commitments on other products of interest to Haiti which the United States may make under agreements negotiated with other countries (other than Cuba).
- 2)
- The proposed agreement might contain provisions of the kind indicated under 1) above and also provision for the continued free entry of coffee, bananas and possibly concessions on certain other products. Such an agreement could not be brought into force until agreements had been negotiated by the United States with certain other countries which are more important as a source of such imports into the United States than is Haiti.
In considering the concessions to be granted by Haiti to the commerce of the United States due regard must be had for the value of the concessions which the United States is likely to be in a position to offer in return; and for the effect of any concessions by Haiti on the revenues of that country. Any concessions or commitments requested of Haiti should be confined to products of which the United States is clearly the chief source of imports into that country. This is desirable because, if a concession were made by Haiti to the United States on a product of which another country is the chief source of Haiti’s imports and to which Haiti accords most favored nation treatment, such other country would be the principal beneficiary of any such concession and Haiti’s bargaining position in any negotiations which might later be entered into with the country concerned would be unnecessarily impaired.
Very truly yours,
- Supra.↩
- By exchange of notes, Foreign Relations, 1926, vol. ii, pp. 403–406.↩