611.3931/59

The Minister in the Dominican Republic ( Schoenfeld ) to the Secretary of State

No. 3588

Sir: Referring to my despatch No. 3579 of October 23, 1936, reporting a conversation with the Minister for Foreign Affairs regarding [Page 418] the threatened denial by the Dominican Government of most-favored-nation treatment to certain American products similar in character to those granted reductions of and exemptions from so-called internal revenue taxes in this country by virtue of the recently concluded Franco-Dominican trade agreement, I have the honor to inform the Department that I asked the Minister for Foreign Affairs this morning whether a decision in this matter had been taken, reminding him of his statement to me last week that he hoped during the current week to inform me of the Government’s decision.

The Minister for Foreign Affairs answered that a report which had been solicited from the Consultative Commission of the Foreign Office had not yet been received. A final decision had not been taken nor did the Minister indicate when the decision might be expected. He went over much of the ground already covered, principally with emphasis upon the alleged fact that the specification in the Franco-Dominican trade agreement of certain factory brands of French products which were to be given preference here had been a proposal of the French Government. On this point, I intimated to the Minister my belief that the specification of manufacturers’ names in an agreement of this kind appeared to establish a new precedent in international commercial relations. I suggested further that the explanation he had given of the origin of the French proposal, namely, the French Government’s desire to protect strictly French manufacturers as against manufacturers of foreign nationality established in France, seemed to involve an extension of an essentially internal French policy to the foreign field in a manner to which foreign governments making trade agreements with the French Government could hardly be expected to lend themselves.

In a manner which again seemed to leave no doubt of the close connection of the two matters in the mind of the Dominican Government, the Minister referred once more to the possibility of negotiating an American-Dominican trade agreement. I intimated again that, in my opinion, any effort on the part of the Dominican Government to seek to bring pressure to bear on our Government looking to a trade agreement by withholding most-favored-nation treatment from American goods could not but be unfortunate. The Minister denied explicitly any intention on the part of the Dominican Government to connect the matter of most-favored-nation treatment under the American-Dominican Modus Vivendi of 1924 with the matter of an American-Dominican trade agreement and, indeed, he said that, despite the inconveniences for the Dominican Government of the American-Dominican Modus Vivendi of 1924, this Government intended to abide by it so long as it remains in force. Nevertheless, I am persuaded that there has been some thought in the Dominican [Page 419] Government’s mind of using as a lever in behalf of an American-Dominican trade agreement the issue presented by the threatened denial of most-favored-nation treatment to American goods similar to those specified in the Franco-Dominican trade agreement.

It should soon appear more definitely whether this surmise is warranted, for the Minister indicated this morning that President Trujillo favored the idea apparently submitted to him by the Minister of communicating to our Government a statement of the Dominican Government’s views regarding an American-Dominican trade agreement. If such a statement should be forthcoming prior to a decision here on the question of most-favored-nation treatment for American goods, the inference would be palpable that it was intended to use an eventual concession in this respect to obtain a consideration from the United States.

Respectfully yours,

H. F. Arthur Schoenfeld