The Nicaraguan Chargé ( De Boyle ) to the Secretary of State
Mr. Secretary: For the reasons which I shall express to Your Excellency below, my Government has followed with the greatest interest the news published with reference to negotiations initiated by the Department of State with certain countries with a view to the celebration, on bases of reciprocity, of commercial agreements contemplating mutual concessions in customs tariff matters.
The ties of every kind between Nicaragua and the United States, developed still further since the celebration of the convention by which the first grants to the second an option for the construction of an interoceanic canal,2 and the closeness of their commercial relations, well illustrated by the fact that the United States has furnished, or has constituted a market for, 62 percent of the total volume of Nicaraguan imports and exports during the last ten years, necessarily impose upon my Government the duty of following with attention those commercial negotiations which might greatly influence the development of Nicaraguan economic life, especially during this period of crisis which my country has not escaped.
By the terms of a convention entered into on January 27, 1912 ,3 Nicaragua and France, granting each other reciprocal concessions with respect to import duties on their respective products, provided in this connection for most-favored-nation treatment; and, in consideration of this treatment by France, Nicaragua conceded analogous treatment to French products and also a specific lowering of 25 percent in the import duties on certain articles especially enumerated in a list known as Table B. These advantages granted to French commerce in a convention of reciprocal concessions, no doubt in consideration of the circumstance that the larger share of Nicaraguan [Page 492] coffee was imported by France, were extended later to the products of the United States by a decree of the President of Nicaragua of August 23, 1911, issued for the purpose of favoring North American commerce, and they have been maintained almost uninterruptedly since then.
With this same tendency to favor imports from the United States, reflecting a natural sympathy of the Nicaraguan people for the people of the United States, the Nicaraguan customs tariff has regularly come to assign to products which are essentially North American substantially reduced import duties. And as a consequence of this and of the preferential treatment to which I have referred above, not only has the commerce of the United States come to occupy first place in my country, comprising more than 62 percent of the total of Nicaraguan imports and exports, but also North American products have come to be consumed in Nicaragua up to 66.6 percent of the total of imports in the last ten years, from January 1, 1923, to December 31, 1932, while the consumption of Nicaraguan products in the United States during the same period has barely reached 57.5 percent of the total of Nicaraguan exports.
In view of the imminence of the commercial arrangements mentioned at the beginning and of the very great interest which Nicaragua has in them, my Government considers it imperative to call Your Excellency’s attention to the circumstances related to the end that Nicaragua’s profound interest in them be taken into consideration, that reciprocally the United States grant to Nicaraguan commerce and products treatment not less favorable than that accorded to any other country of America, and that no greater restrictions than those already imposed be placed on the importation of its products; and my Government has given me instructions to express to Your Excellency at the same time its desire not to remain outside the commercial arrangements which may be celebrated but to take part in them, and that under such arrangements special concessions be given to it in compensation for the continued favorable treatment of the commerce and products of the United States.
In accordance with those instructions, I wish to refer particularly to discussions which are pending in the Department of Agriculture of the United States, in execution of the act approved by Congress May 12, 1932 , (Agricultural Adjustment Act),4 with the object of arriving at an arrangement (Marketing Agreement for Sugar Stabilization) for the production, refinement and distribution of sugar, and which appear to favor although perhaps without an express declaration and only through an agreement creating certain defined production areas and an administrative organism charged [Page 493] with issuing special regulations governing them, the exclusion of sugar produced in Nicaragua from importation into the United States.
Sugar is one of the principal products which Nicaragua exports and which the commerce and industry of the West Coast of the United States, and principally of the States of California, Oregon and Washington, use preferentially, because of the special qualities of the Nicaraguan product, in the preservation and packing of fruits which themselves are generally destined to be exported. While the amount which Nicaragua can supply to the commerce and consumption of the United States, 15,000 to 20,000 tons per year, is perhaps inappreciable as an element of competition with other sugars, and signifies practically nothing alongside of the 6,350,000 tons annually at which the internal consumption of the United States is calculated, this exportation, nevertheless, constitutes for my country one of the great sources of its export trade and, as such, of its capacity to buy, precisely in the same markets of the United States, the products which it must import. The exclusion of Nicaraguan sugar from importation into the United States would seriously affect the economic life of Nicaragua, depriving it of resources which it needs for its importations, and in turn would prejudice the quota which the commerce of the United States has freely had in the Nicaraguan import trade.
As a natural consequence of the present absence of economic equilibrium, the Government of Nicaragua must contemplate the probability of a revision of its customs tariff and of its commercial arrangements and conventions, in the near future; particularly since French merchants have already solicited greater preferences in the regulation of international exchange by invoking the circumstance that, while the greater part of Nicaraguan coffee is imported into France, Nicaragua, nevertheless, obtains the larger part of its imports from other countries. Your Excellency will not fail to appreciate that the commerce of my country, should the United States adopt the proposed restrictions on the importation of sugar and should other countries out of fear of this for the reasons which I have just expressed adopt similar restrictions, would be seriously affected, and that the 66.6 percent of its imports which it has been obtaining in the North American market would necessarily have to be reduced, perhaps obliging it to make greater concessions to those who in such a critical situation should consume a larger portion of its exports or give the latter greater facilities.
My Government, attentive to the request of the producers of my country who are justly alarmed by the possibility that the arrangements and regulations for stabilizing sugar now being discussed in the Department of Agriculture may have the effect of excluding their product from importation into the United States, has instructed me [Page 494] specifically that, in informing you of its point of view and of the interest which Nicaragua has in the commercial arrangements and agreements first mentioned and from which it does not desire to remain apart, I should insist especially on expressing to Your Excellency, in association with the Minister of Finance of Nicaragua, Dr. Salvador Guerrero Montalván, who is now in Washington, the well-grounded fear that without the attention of the State Department the special situation and attitude of Nicaragua with respect to the commerce of the United States and the importance which its sugar exports have in its economic life, may be forgotten, in order that opportune consideration may be given them before definite decisions are made by the Department of Agriculture.
In carrying out these instructions, I suggest to Your Excellency, taking advantage of the presence here of the Minister of Finance of my country, the possibility of an exchange of impressions in the matter between him and the respective officials of the Treasury and Agriculture Departments, if, as I do not doubt, Your Excellency considers it advisable from the point of view of more complete information. Trusting that my Government’s interest in the matter will be sufficiently appreciated by Your Excellency and that the Government of the United States will recognize the basis and justice of its pretensions by giving them immediate attention, I have [etc.]