611.2131/264: Telegram

The Secretary of State to the Chargé in Colombia (Washington)

74. Your 112, December 26, 1934. For your confidential information trade agreement negotiations with Brazil are nearing completion and it is desired to conclude the Colombian negotiations without delay in order that the two agreements may be brought into force simultaneously. Accordingly, you are requested to urge discreetly that the proposals be acted upon promptly.

It is especially desired that Colombia agree to the proposed changes relating to state and municipal taxes. Since the Secretary of the Foreign Office has expressed an interest therein it is suggested that [Page 84] you discuss the matter orally and informally with him pointing out that inasmuch as this Government now is offering to accord to the products of Colombia enumerated in Schedule Two unqualified and unrestricted national and most favored nation treatment with respect to such taxes, the request that the same treatment be accorded to all of the products of the United States enumerated in Schedule I is fair and reciprocal. In this connection it will be recalled that in the agreement of December 15, 1933, the pledge on the part of this Government insofar as national treatment relating to state and municipal taxes is concerned is restricted to such taxes “affecting interstate or foreign commerce.” Further, the new proposal would place no limitation on the amount of such taxes, whereas the agreement of December 15, 1933, does limit the amount thereof.

Also, it may be said that in the view of this Government the new proposal relating to state and municipal taxes is the only change of importance in the agreement of December 15, 1933, which has been definitely proposed (for this Government does not consider elimination of the provision suspending application of the anti-dumping act to green coffee to be of any practical importance to Colombia).

This Government might have definitely proposed deeper tariff reductions and reductions on additional important American exports to Colombia in view of the fact that many of the rates of duty in the Colombian tariff, particularly those on agricultural products, are extremely high and a number of the tariff concessions accorded by Colombia are little more than nominal. Instead, as regards the tariff concessions accorded by Colombia, this Government has confined itself merely to a statement that it would appreciate such consideration as the Colombian Government may be disposed to give in respect of further tariff reductions.

Concerning Article X, you may inform the Secretary of the Foreign Office that this is a typical article which we plan to include in all our trade agreements. Its purpose is to reserve to each government the unqualified right to apply control measures to the export or sale for export of arms, munitions, or implements of war to any country whether or not such export control measures are applied to any other country. However, you may point out informally that it has not been the policy of this Government, when Latin American countries are at war, to apply control measures to such exports to one belligerent and not to the other.

Please report promptly by cable.