The Ambassador in Peru (Dearing) to the Secretary of State
[Received October 10.]
Sir: I have the honor to refer to the Department’s instruction No. 800 of August 9, 1935, directing me to carry out an exchange of views of a purely informal character with the Peruvian Government with a view to determining whether there is a basis for the conclusion of a satisfactory trade agreement with Peru within the scope of the present trade agreements program and the commercial policy of our Government.
Mindful of the Department’s desire that this exchange of views should be restricted to general consideration of policy, I spoke to the Foreign Minister in a preliminary sense on the 24th of August. He was not prepared, without some previous consideration, to give me much of an indication as to his Government’s attitude. He nevertheless declared his great interest in the fact that our Government is considering the possibility of the eventual negotiation of a trade agreement between the Government of Peru and the United States and said that he would be glad to have from me a memorandum outlining the [Page 934]salient features of the commercial policy of the United States and the nature of my immediate instructions. I told the Minister I should be delighted to give him this information and he promised to study it and let me know when he could talk to me more to the point. He was impressed by the fact that my instructions had come directly from Secretary Hull and that they were an outgrowth of and in harmony with the resolution on the economic, commercial and tariff policy approved by the Seventh International Conference of American States at Montevideo in December 1933, which resolution, he felt, was so much the work of Secretary Hull.
Commenting in a general way upon the present trade situation, the Foreign Minister recalled that while there are no material bars to the sale of American products in Peru, practically all of Peru’s products are prevented, by tariff rates and other restrictions, from entering the United States market. I suggested that although under the circumstances it would seem logical for the United States to offer lower rates on certain Peruvian products in order to initiate the negotiations, it would greatly help the psychology of the situation and the future success of negotiations if Peru could indicate, in some striking way, how exports from the United States to Peru might be benefitted and augmented so that this could be presented as a reason for the celebration of a reciprocal trade treaty and as an offset to the desirability of our making concessions in order to remove the prohibitive tariff rates existing at present.
Without committing himself on this point, the Minister mentioned Cuba’s favored position and the fact that under present circumstances Peru cannot market any of her sugar in the United States. I endeavored to show the Minister that the special relationships between the United States and Cuba was based upon the historic circumstances of the case and said to him that the matter of the sugar quotas was an extremely difficult question for us in which our Congress and the Department of Agriculture had established conditions which might not be subject to any control on the part of the Department of State. I added that while I sincerely regretted the fact that under present conditions Peru could not market some 100,000 tons of her sugar in the United States, I feared I could not hold out any hope that much could be done to relieve this particular situation.
Believing that it was best to be frank and that it was entirely within the sense of the Department’s instructions No. 800 of August 9, 1935, I supplied the Foreign Minister on August 25th (copy of my note herewith enclosed)4 with a copy of the instruction and its accompanying papers.
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