611.2231/84
The Minister in Ecuador (Gonzalez) to the Secretary of State
[Received November 19.]
Sir: With reference to my despatch No. 161 of October 28, 1935, concerning the preferential tariff at present enjoyed by France on its imports into Ecuador, I have the honor to report that I left yesterday with the Under Secretary for Foreign Affairs a copy of the provisions of the American law authorizing the President, in the event of discrimination by foreign countries, to establish new or additional duties on the products of those countries entering the United States (The Code of the Laws of the United States of America in force January 3, 1935, Title 19, Section 1338). The Under Secretary was not aware of the existence of this authorization and remarked that it appeared to be a violent measure. I pointed out that it was the policy of the United States Government to avail itself of this provision only in case of a palpable discrimination and an indisposition upon the part of the authorities to remove it.
In discussing the situation with the Under Secretary I recognized that trade with France leaves a very favorable balance for Ecuador (exports to France during 1934, 21,117,112 sucres; imports from [Page 511] France, 2,383,040 sucres). However, I pointed out that the fact must not escape the attention of the Ecuadorean Government that the bulk of its exports during that period was sold to the United States (exports, 48,716,381 sucres, imports, 21,153,826 sucres), and that the balance in favor of Ecuador had been in excess of 27 million sucres. Therefore, it was incumbent upon his Government to take immediate steps to remove the existing discrimination against American products.
The Under Secretary stated that his Government had already indicated its desire to conclude a new Commercial Treaty with the United States and that provision could be made therein to remove the discrimination. In compliance with the Department’s instruction No. 52 of September 4, 1935, I expressed our appreciation of this interest and explained our inability to initiate the negotiation of a permanent treaty at this time. I added that his Government should experience no great concern over a delay in concluding a commercial treaty since such delay was not prejudicial to the interests of Ecuador. In this connection I explained that the advantages conceded in our bilateral agreements to other countries, particularly Colombia and Brazil, on exports identical to those of this country, are extended under our most-favored-nation treatment to articles of Ecuador exported to the United States. I cited that the two principal articles in which Ecuador is interested, namely, coffee and cacao, and also bananas and vegetable ivory, have already been the subject of treaty negotiations with Brazil7 and/or Colombia,8 that the United States has agreed with those countries to maintain these articles on the free list, and that these concessions are extended to Ecuador as and when they become effective for the countries immediately concerned.
In view of the inability to initiate discussion of a definitive Commercial Treaty at this time and in order to remove the discrimination referred to, I submitted for the consideration of the Under Secretary a copy of the communications exchanged between the American Embassy at Santiago, Chile, and the Chilean Government on September 28, 1931, and I suggested that a modus vivendi to the same effect would appear to offer a solution of the present problem pending the conclusion of a definitive commercial treaty. I explained that the purpose of this exchange of notes had not been to obtain any special concession for American exports to Chile, but simply to remove discrimination similar to that which is now occurring in Ecuador. The Under Secretary referred to the fact that the French-Ecuadorean modus vivendi grants to all French imports a reduction of 30 percent. Under these circumstances, were this same advantage extended to the United States, it would mean that a reduction of 30 percent would be accorded [Page 512] not only on the imports from the United States identical to those imported from France, but also on all other American imports. Therefore, an arrangement on this basis would go far beyond that contemplated in the Chilean-American modus vivendi under reference. I admitted that this would be the result but that the underlying cause was the very generous treatment which Ecuador had formally accorded to France, and it was the desire of my Government now to remove the existing discrimination by extending the same concessions to imports from the United States. The Under Secretary stated that he would study the matter and after consultation with the Minister, make a suggestion of an arrangement which would correct the present situation. In this latter connection I feel that if a proposal is not made within a week or ten days, I should be authorized to lodge a formal complaint and insist upon the immediate removal of discrimination.
Respectfully yours,