611.2131/257

The Department of State to the Colombian Embassy 11

Memorandum

The memorandum of the Department of State dated August 28, 1934,12 indicated that the Government of the United States desired to conclude a new trade agreement with the Republic of Colombia, under the authority of the Trade Agreements Act approved by the President on June 12, 1934, to replace the Agreement signed December 15, 1933. It was explained in the memorandum under reference that the [Page 73] Act of June 12, 1934, authorizes the President to enter into trade agreements with foreign countries and to make them effective by proclamation without the necessity of obtaining a special act of Congress in each case, and requires, among other things, that the intention to negotiate any such agreement must be publicly announced in order that interested persons may have an opportunity to present their views.

These requirements having been complied with, in connection with the proposed new trade agreement with the Republic of Colombia, the Government of the United States is now in a position to proceed with the negotiation of an agreement based upon the provisions of the Agreement signed December 15, 1933, and to indicate the changes in the latter instrument which it suggests be incorporated in the proposed new agreement.

With reference to the text of the Agreement signed December 15, 1933, it is necessary to propose a number of changes. There is attached the text of the proposed new agreement as it would appear if the suggested changes were made. For convenience, there is also attached a comparative text of the Agreement signed December 15, 1933, showing proposed omissions and additions.13 The changes indicated are in large part only formal and will doubtless in most cases be found to be self-explanatory. However, certain of them seem to require some explanation and comment.

Article III of the Agreement signed December 15, 1933, provided in effect that the provisions regarding the customs treatment to be accorded by each country to the products of the other should not apply to such special duties as are, or may be required to be, imposed by the laws of either country on importations which are not properly marked to indicate their origin, or to anti-dumping duties. With respect to the latter stipulation, however, the article contained an exception to the effect that anti-dumping duties would not be applied to unroasted coffee imported into the United States from Colombia.

When the Agreement of December 15, 1933, was signed, it was the intention to submit it to the Congress of the United States to be enacted into law. Under this procedure the effect of Article III, if approval of the Agreement by the Congress had been obtained, would have been to modify the Anti-dumping Act by statutory enactment. The situation, however, has been altered by the fact that the proposed new agreement will be brought into force on the part of the United States by Executive action, under the authority of the Trade Agreements Act of June 12, 1934. It becomes necessary, therefore, to make certain that the provisions of the proposed agreement come clearly within the authority of that Act. The exception above referred to regarding the non-application of the Anti-dumping Act to coffee imported from [Page 74] Colombia has been carefully considered by the competent legal officers of this Government, and they have expressed grave doubt whether the Trade Agreements Act authorizes the inclusion of this provision in the proposed agreement. For this reason it is considered necessary to propose that it be omitted. It may be pointed out, however, that in the thirteen years during which the Anti-dumping Act has been in effect there has been no occasion for the application of that Act to green coffee imported from Colombia.

The Government of the United States also desires further that the whole of Article III of the Agreement signed December 15, 1933, be omitted from the new agreement and that the other matters dealt with in that article be provided for in general terms in Articles I and II, as indicated in the attached draft of the new agreement. It is believed that the provisions in Article III of the Agreement signed December 15, 1933, regarding additional duties on articles not marked to indicate the country of origin and regarding anti-dumping duties are adequately dealt with in the general clause proposed for inclusion in Articles I and II, whereby the duty reductions on products specified in the Schedules are confined to ordinary customs duties, and whereby such products are exempted from any other duties, taxes, fees or charges other or higher “than those imposed or required to be imposed by laws … in effect on the date of the signature” of the Agreement.

With reference to Article IV of the Agreement of December 15, 1933, relating to internal taxes, the changes suggested are based on considerations similar to those with respect to the non-application of anti-dumping duties to green coffee imported from Colombia. As in the latter case, there is grave doubt whether the Trade Agreements Act of June 12, 1934, authorizes the inclusion of any provision with regard to the limitation of the amount of state or municipal taxes. For this reason it is necessary to propose that the provisions of the third paragraph of Article IV, whereby such a limitation is imposed, be omitted from the new agreement. It will be observed that in the proposed revision of the text the corresponding obligation on the part of the Republic of Colombia with respect to departmental and municipal taxes has been omitted.

On the other hand, a further study of the legal considerations involved has led to the conclusion that it would be possible, in conformity with constitutional provisions, to include in the proposed new agreement a provision for national and most-favored-nation treatment with respect to state and municipal taxes. The provisions of the second paragraph of the proposed revised text of Article IV have been modified in accordance with the above considerations. The Government of the United States requests that, reciprocally, the provision for national and most-favored-nation treatment in Colombia regarding departmental and municipal taxes likewise be revised so as to be [Page 75] made applicable to all articles enumerated and described in Schedule I. This would, of course, involve the omission of Schedule III of the Agreement signed December 15, 1933.

Article IV as thus revised would provide (a) for national and most-favored-nation treatment with respect to national or federal internal taxes on all articles, whether or not included in the appended Schedules; (a) a limitation on the absolute amount of national or federal internal taxes on articles enumerated and described in the Schedules; and (c) reciprocal national and most-favored-nation treatment with respect to state or departmental, and municipal taxes on all articles enumerated and described in the Schedules.

With reference to the tariff concessions set forth in Schedule II of the Agreement signed December 15, 1933, the Government of the United States is prepared to add the following articles to the list of products on which customs concessions would be granted by the United States to Colombia:

(1)
Paragraph 10 (Tariff Act of 193014)—Tolu balsam, natural and uncompounded, not containing alcohol; present duty 10% ad valorem; proposed new duty, 5% ad valorem.
(2)
Paragraph 35 (Tariff Act of 1930)—ipecac, natural and uncompounded, but advanced in value or condition by any process or treatment whatever beyond that essential to proper packing and the prevention of decay or deterioration pending manufacture, and not containing alcohol; present duty 10% ad valorem; proposed new duty. 5% ad valorem.
(3)
Paragraph 762 (Tariff Act of 1930)—castor deems; present duty one-half of 1 cent per pound; proposed new duty, one-fourth of 1 cent per pound.

With reference to the proposed tariff concessions by Colombia on products of the United States included in Schedule I of the Agreement signed December 15, 1933, the Government of the United States invites attention to the fact that certain of the rates of duty in the Colombian tariff, particularly those on agricultural products, are extremely high and would remain so even if they were reduced as provided for in Schedule I of the Agreement signed December 15, 1933. Therefore, the Government of the United States would appreciate such consideration as the Government of the Republic of Colombia may be disposed to give to the possibility of granting some further reductions in such duties.

With reference to the matter of foreign exchange control, the Government of the United States proposes that there be included in a separate exchange of notes, to be entered into concurrently with the proposed trade agreement, provisions on this subject designed reciprocally to protect the interests of the two countries.

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[Enclosure]

Proposed New Reciprocal Trade Agreement With Colombia

The President of the United States of America and the President of the Republic of Colombia, desiring to promote trade between the two countries, have arrived at the following reciprocal Agreement.

Article I

Articles the growth, produce or manufacture of the United States of America, enumerated and described in Schedule I annexed to this Agreement and made a part thereof, shall, on their importation into the Republic of Colombia, be exempt from customs duties in excess of those set forth in the said Schedule. For purposes of this article the term “customs duties” means the duties set forth in the Tariff Schedule of Colombian law 62 of 1931,14a as modified and in effect on the day of the signature of this Agreement.

No other or higher duties, taxes, fees, or charges of whatever denomination, other than customs duties, shall be imposed on or in connection with the importation into the Republic of Colombia of articles the growth, produce or manufacture of the United States of America enumerated and described in Schedule I, than those imposed or required to be imposed by laws of the Republic of Colombia in effect on the day of the signature of this Agreement.

Article II

Articles the growth, produce or manufacture of the Republic of Colombia, enumerated and described in Schedule II annexed to this Agreement and made a part thereof, shall, on their importation into the United States of America, be exempt from ordinary customs duties in excess of those set forth in the said Schedule and from all other duties, taxes, fees, charges or exactions, imposed on or in connection with importation, in excess of those imposed or required to be imposed by laws of the United States of America in effect on the day of the signature of this agreement. The provisions of this article shall not apply to coffee imported into Puerto Rico.

Article III

All articles the growth, produce or manufacture of the United States of America or the Republic of Colombia, shall, after importation into the other country, be exempt from national or federal internal taxes, fees, charges or exactions other or higher than those payable on [Page 77] like articles of national origin or any other foreign origin; and articles the growth, produce or manufacture of the United States of America, or the Republic of Colombia enumerated and described in Schedules I and II, respectively, shall, after importation into the other country, be exempt from all internal taxes, fees, charges or exactions other or higher than those payable on like articles of national origin or any other foreign origin.

Articles the growth, produce or manufacture of the United States of America or the Republic of Colombia enumerated and described in Schedules I and II, respectively, shall, after importation into the other country, be exempt from any national or federal internal taxes, fees, charges or exactions other or higher than those imposed or required to be imposed by laws of the United States of America and the Republic of Colombia, respectively, in effect on the day of the signature of this Agreement.

In so far as rates and charges for transportation services within the United States of America or the Republic of Colombia are imposed or controlled by the Government of the respective country, goods which are grown, produced or manufactured in the territory of either country shall pay within the territory of the other country transportation rates and charges which are not discriminatory as compared with the rates and charges on like goods of domestic origin transported under like circumstances and conditions.

Article IV

No prohibition or restriction on importations shall be imposed by the United States of America or the Republic of Colombia on articles the growth, produce or manufacture of the other country with respect to which obligations have been assumed under Articles I or II of this Agreement: Provided, That the foregoing provision shall not apply to prohibitions or restrictions relating to public security; imposed on moral or humanitarian grounds; designed to protect human, animal, or plant life; applying to prison-made goods; relating to the enforcement of police or revenue laws; or designed to extend to imported products a regime analogous to that affecting like or competing domestic products.

Article V

Laws, regulations of administrative authorities and decisions of administrative or judicial authorities of the United States of America and the Republic of Colombia, respectively, pertaining to the classification of articles for customs purposes or to rates of duty shall be published promptly in such manner as to enable traders to become acquainted with them.

[Page 78]

Unless otherwise provided under constitutional requirements, no administrative ruling by the United States of America or the Republic of Colombia effecting advances in duties or charges applicable under an established and uniform practice to imports, from the territory of the other country, or imposing any new requirement with respect to such importations, shall be effective retroactively or with respect to articles either entered for or withdrawn for consumption prior to the expiration of thirty days after the date of publication of notice of such ruling in the usual official manner. The provisions of this paragraph do not apply to administrative orders imposing antidumping duties, or relating to sanitation or public safety, or giving effect to judicial decisions or decisions of customs courts.

Article VI

It is agreed that the United States of America and the Republic of Colombia will grant each other unconditional and unrestricted most-favored-nation treatment in all matters concerning customs duties and subsidiary charges of every kind and in the method of levying duties, and, further, in all matters concerning the rules, formalities and charges imposed in connection with the clearing of goods through the customs.

Accordingly, natural or manufactured products having their origin in the United States of America or the Republic of Colombia shall in no case be subject, in the other country in regard to the matters referred to above, to any duties, taxes or charges other or higher, or to any rules or formalities other or more burdensome, than those to which the like products of any third country are or may hereafter be subject.

Similarly, natural or manufactured products exported from the territory of the United States of America or the Republic of Colombia and consigned to the territory of the other country shall in no case be subject with respect to exportation and in regard to the above-mentioned matters, to any duties, taxes or charges other or higher, or to any rules or formalities other or more burdensome, than those to which the like products when consigned to the territory of any third country are or may hereafter be subject.

Any advantage, favor, privilege or immunity which has been or may hereafter be granted by the United States of America or the Republic of Colombia in regard to the above-mentioned matters, to a natural or manufactured product originating in any third country or consigned to the territory of any third country shall be accorded immediately and without compensation to the like product originating in or consigned to the territory of the Republic of Colombia or the United States of America, respectively.

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Without prejudice to the provisions of Article IV of this Agreement, neither the United States of America nor the Republic of Colombia shall establish any prohibition or maintain any restriction on imports from the territory of the other country which is not applied to the importation of any like article originating in any third country. Without prejudice to the provisions of Article IV of this Agreement, any abolition of an import prohibition or restriction which may be granted even temporarily by the United States of America or the Republic of Colombia in favor of an article of a third country shall be applied immediately and unconditionally to the like article originating in the territory of the Republic of Colombia or the United States of America, respectively.

In the event of rations or quotas being established by the United States of America or the Republic of Colombia for the importation of any article otherwise restricted or prohibited, it is agreed, without prejudice to the provisions of Article IV, that in the allocation of the quantity of restricted goods which may be authorized for importation, the other country will be granted a share equivalent to the proportion of the trade which it enjoyed in a previous representative period.

Nevertheless, the advantages now accorded or which may hereafter be accorded by the United States of America or the Republic of Colombia to adjacent countries in order to facilitate frontier traffic, and advantages resulting from a customs union to which either country may become a party shall be excepted from the operation of this Agreement; and this Agreement shall not apply to police or sanitary regulations or to the commerce of the United States of America with the Republic of Cuba, or to commerce between the United States of America and the Panama Canal Zone, the Philippine Islands, or any territory or possession of the United States of America or to the commerce of the territories and possessions of the United States of America with one another.

Subject to the reservations set forth in the preceding paragraph, the provisions of this article shall apply to articles the growth, produce or manufacture of any region under the sovereignty or authority of the United States of America or the Republic of Colombia imported from or exported to any region under the sovereignty or authority of the Republic of Colombia or the United States of America, respectively. It is understood, however, that the provisions of this paragraph do not apply to the Panama Canal Zone.

Article VII

In cases in which any penalty or additional duties shall be imposed in the United States of America or the Republic of Colombia in [Page 80] respect of customs regulations or customs formalities on merchandise arriving from the territory of the other country, a period of at least sixty days will be granted the importer or other party in interest, or the agent of either of them, in which an appeal may be taken to an appropriate authority competent to review the matter: Provided, That in the case of merchandise liable to perish or to waste or to become greatly reduced in value by keeping, or when the expense of preserving the merchandise is out of proportion to the value thereof, such merchandise may be sold, and the net proceeds obtained from such sale shall be considered merchandise within the meaning of this paragraph and shall be accorded all the privileges of appeal as provided herein.

Greater than nominal penalties will not be imposed in the United States of America or the Republic of Colombia upon importations of products or manufactures of the territory of the other country because of errors in documentation obviously clerical in origin or where good faith can be established.

The Government of each country will accord sympathetic consideration to such reasonable representations as the other Government may make regarding the operation of customs regulations, the observance of customs formalities, and the application of sanitary laws and regulations for the protection of human, animal, or plant life.

Article VIII

Except as provided in Article VI the provisions of this Agreement relating to the treatment to be accorded by the United States of America and the Republic of Colombia, respectively, to the commerce of the other country, shall not apply to the Philippine Islands, the Virgin Islands, American Samoa, the Island of Guam, nor to the Panama Canal Zone.

Article IX

On and after the day on which this Agreement comes into force, articles the growth, produce or manufacture of the United States of America and articles the growth, produce or manufacture of the Republic of Colombia previously imported into the other country shall be subject to the provisions of this Agreement, if entry therefor has not been made, or if they have been previously entered without payment of duty and under bond for warehousing, transportation, or any other purpose, and without any permit of delivery to the importer or to his agent having been issued: Provided, That when duties are based upon the weight of merchandise deposited in any public or private warehouse, the said duties shall, except as may be otherwise specially provided in the tariff laws of the respective countries [Page 81] in force on the day of the signature of this Agreement, be levied and collected upon the weight of such merchandise at the time of its entry.

Article X

The United States of America and the Republic of Colombia retain the right to apply such measures as they respectively may see fit with respect to the control of the export or sale for export of arms, munitions, or implements of war, and in exceptional circumstances of other material needed in war.

Article XI

Nothing in this Agreement shall be construed in any way to affect any of the provisions of the treaty signed at Bogotá, April 6, 1914, by the United States of America and the Republic of Colombia.

Article XII

The Governments of the United States of America and the Republic of Colombia declare that the purpose of this Agreement is to grant mutual and reciprocal concessions and advantages for the promotion of commercial relations between the two countries; and that each and every one of the provisions contained herein shall be complied with and interpreted in accordance with this spirit and intention.

Article XIII

The present Agreement shall come into full force on the thirtieth day following proclamation thereof by the President of the United States of America and the President of the Republic of Colombia, or should the proclamations be issued on different days, on the thirtieth day following the date of the later in time of such proclamations, and shall remain in force for the term of two years thereafter. The Government of each country shall notify the Government of the other country of the date of its proclamation.

Unless at least six months before the expiration of the aforesaid term of two years the Government of either country shall have given to the other Government notice of intention to terminate the Agreement upon the expiration of the aforesaid term, the Agreement shall remain in force thereafter until six months from such time as the Government of either country shall have given notice to the other Government.

In witness whereof the respective Plenipotentiaries have signed this Agreement and have affixed their seals hereto.

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Done in duplicate, in the English and Spanish languages, both authentic, at the City of Washington this . . . . . day of . . . . . . . ., 193 …

For the President of the United States of America;

For the President of the Republic of Colombia:

  1. Handed to the Colombian Chargé on December 10, 1934, by Francis B. Sayre, Assistant Secretary of State.
  2. Memorandum missing from Department files.
  3. Not printed.
  4. 46 Stat. 590.
  5. Colombia, Diario Oficial, May 22, 1931, p. 401.