611.5231/993: Telegram
The Acting Secretary of State to the Ambassador in Spain (Bowers)
45. Your 47, July 12, 2 p.m. Last week the Spanish Ambassador informed us that Spain was prepared to give the United States an automobile quota of 2,488,148 kilograms, equal to about 1737 cars or 17% of the global quota. We had previously told the Ambassador that we felt that it would be almost impossible for us to justify in this country less than 5,800,000 kilograms, equal to about 4118 cars or 41% of the total quota; 41% represents our average share of the Spanish trade from 1929–1933 inclusive, a period which includes a little over two years when American cars were virtually out of the market because of discriminatory tariff treatment.
As you know what we really want is the abolition of this recently established quota on motor cars or, if Spain feels that she must because [Page 715] of economic conditions limit the number of cars entering the country, an unallocated quota. In other words, all we are asking for American motor cars is equality of treatment and the abolition of artificial restrictions. We told Calderón that in view of the large number of real tariff reductions which we have offered Spain, his offer is very disappointing and unacceptable.
Aside from motor cars the Spanish offers in the negotiations have been confined to small reductions on products covering only 19% of the value of our exports to Spain. Most of these reductions (17%) are merely most favored nation rates; in other words, reductions already granted to products of other countries and heretofore withheld from American goods. Only 2% of the value of our exports to Spain have been covered by Spanish offers of reductions other than most favored nation rates. On the other side of the picture, we have offered to Spain very substantial reductions on goods which account for approximately 50% of the value of Spain’s exports to this country.
We are giving the whole situation very thorough consideration to try to find a way out of the present impasse. We shall keep you informed of all developments. In the meantime, we shall appreciate any comments and recommendations which you may wish to make.