The Secretary of State to the Minister in Honduras (Lay)

No. 592

Sir: With a view to improving the opportunities for trade between the United States and Honduras, consideration is being given to the possibility of concluding a mutually advantageous trade agreement between the two countries. Some seventy-five per cent of Honduran exports to the United States consist of bananas. In the proposed agreement, therefore, the United States might undertake that this product should continue to be admitted free of duty in return for reductions in duties by Honduras on important products of the United States. It is possible that in the course of exploratory conversations Honduras might wish to bring to the attention of the United States other products, in addition to bananas, on which concessions would be desired. Sympathetic consideration would be given to any such proposals, although it is believed that in view of the importance of bananas in Honduran trade with the United States a guarantee of continued free entry of this product would be equivalent in value to concessions by Honduras on the principal products imported from the United States.

The trade agreement might also contain a provision 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.

Please communicate the above to the Government of Honduras and inform it that if it is prepared to begin exploratory conversations along the lines above indicated the Department will send you very shortly a statement regarding the concessions which would probably be requested by the United States.

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

It is desired that no publicity be given this matter for the time being.

Very truly yours,

For the Secretary of State:
Francis B. Sayre