652.116 Auto/7
The Chargé in Spain (Johnson) to the Secretary of State
[Received June 5.]
Sir: With reference to the Embassy’s cable No. 27 of May 6, 1 p.m., I have the honor to report that in spite of the 100 percent quota given American automobiles for the present quarter, importations during this period will amount to a very small number of cars. The 100 percent is based on last year’s importations during the same period, and in that time only 141 passenger cars were imported from the United States and 370 passenger cars of American manufacture from Canada—General Motors exported no passenger cars from the United States to Spain during this period of last year and but 142 from Canada.
While the Spanish authorities have not even yet decided on the quota for this quarter to be alloted to cars of Canadian origin, it is almost certain that the quota will not exceed 10 percent. Thus during this quarter only 141 cars can be imported from the United States and 37 from Canada. American companies manufacturing cars in Canada and Belgium have been requesting the Embassy’s good offices, but the Embassy has taken no action, firstly, because it is uncertain as to whether the Department desires it to make representations regarding Canadian and Belgian quotas and, secondly, because any representations would in all probability be futile.
I desire to invite the Department’s attention to the fact that before higher tariffs were levied on American cars than those levied on cars from other countries American export of automobiles to Spain was entirely satisfactory. It was stated in the Department’s cable No. 13 of February 19, 6 p.m. that “passenger automobiles prior to the adoption of Spain’s discriminatory tariff rates were our most important export to Spain with the sole exception of raw cotton”. I, therefore, venture to suggest with reference to the Department’s confidential [Page 710] instruction No. 222, of April 30,13 that we should not ask the lowering of the Spanish duty on American automobiles from gold pesetas per net kilo 2.16 to .55, but should merely request most-favored-nation treatment. Not only is such treatment all that we can expect to obtain, but if we receive it we can compete advantageously with any other country.
With reference to the same instruction, I do not understand why we are asking a reduction of the duty on automobile trucks, since I am informed by the Commercial Attaché that during the first three months of this year the exportation of United States trucks amounted to 71 per cent of all the trucks imported into Spain during that period.
In conclusion, I may add that if we succeed in getting most-favored-nation treatment as regards passenger cars and an adequate quota based on a representative period, our automobile trade with Spain will be in good shape. Moreover, we will export far more American cars from the United States than from Canada since the f. o. b. American prices are considerably lower than the Canadian prices.
Respectfully yours,
- Not printed; it enclosed lists of desiderata exchanged with the Spanish Embassy in Washington.↩