611.2231/33
The Minister in Ecuador ( Gonzalez ) to the Secretary of State
[Received November 7.]
Sir: I have the honor to report that the Minister for Foreign Affairs at the regular diplomatic reception on October 11, 1935, referred to the preferential tariff at present enjoyed by France (see despatch No. 97 of September 27, 1935, of the American Consulate General at Guayaquil2). He explained that the latter had insisted upon this [Page 508] concession in view of the favorable trade balance enjoyed by Ecuador and that his Government had been obliged to accede in order to retain its market in that country for coffee and cacao. He added that it was not his policy to accord concessions of this kind to European countries. Rather it was his conviction that such trade advantages should be granted to the United States which is the principal market for the bulk of Ecuadorean products.
I took advantage of this opportunity to point out to the Minister that the existing agreement with France is definitely discriminatory against the United States in principle as well as in fact, and I expressed the hope that his Government would take immediate steps to correct this situation. I suggested as a possible solution the conclusion of a modus vivendi providing for most-favored-nation treatment similar to that concluded by the United States with Chile on September 28, 1931,5 whereunder the concessions granted to imports from France would be extended to imports from the United States during the life of the Ecuadorean-French modus vivendi.
The Minister replied that unfortunately the agreement with France is so worded that the advantage resulting therefrom can not be extended to other countries merely by virtue of a most-favored-nation clause, and that in order to obtain these or similar concessions it is necessary to conclude a special treaty on the subject. It is true that the agreement in question is in the nature of a conditional advantage, but the fact must not be lost sight of that the trade relations of the United States with Ecuador are almost identical to those of France and Ecuador in that we purchase more from this country than we sell. However, there is a most important exception in our favor in that the value of Ecuador’s exports to the United States is more than double that to France. Moreover, I do not necessarily agree with the Minister that the advantages in question are not susceptible to extension to the United States under the provisions of a most-favored-nation clause. It is possible that he has taken this position in an endeavor to expedite our giving serious consideration to the immediate negotiation of a Commercial Treaty wherein a solution for this particular difficulty would also be provided. In view thereof I feel that the question of discrimination by Ecuador against the United States in favor of France should be considered jointly with the desire of the Government of Ecuador to conclude a trade agreement which I have discussed in my despatch No. 162 of this same date and to which I respectfully invite the attention of the Department.
Respectfully yours,
- Not printed.↩
- Foreign Relations, 1931, vol. i, pp. 926–927.↩