611.2231/54

The Department of State to the Ecuadoran Legation

Memorandum

Careful consideration has been given to the Spanish text of the proposed commercial modus vivendi between Ecuador and the United States, which was handed to the Chief of the Division of Latin American Affairs by the Minister of Ecuador on April 20, 1936, and the Department of State desires to suggest two changes in that text.

The English text of the proposed agreement submitted for the consideration of the Ecuadoran Government reads in part as follows:

“2. Accordingly, it is understood that with respect to customs duties or charges of any kind imposed on or in connection with importation or exportation…”

The Spanish text reads as follows in the corresponding part:

“2. En consecuencia, queda entendido que, con respecto a los derechos de aduana existentes o que tienen relación con la importación y exportation…”

The first change suggested is that the Spanish text of Article 2 be made to read as follows:

“2. En consecuencia, queda entendido que, con respecto a los derechos o tasas de aduana de cualquier clase o que tienen relación con la importación y exportation…”

This change is deemed desirable because the word “existing” in English might be construed to mean that the Article relates only to customs duties or charges in force on the day of the signature of the agreement. Since it is understood that the Ecuadoran and American Governments are in agreement upon the sense and interpretation of this part of Article 2, the change is one of language and not of intent. The suggested change in the Spanish text also makes the language of Article 2 correspond to that of Article 1.

The second and more important change suggested is that Article 3 of the Spanish text be omitted entirely. The deletion of this Article is desired for the reason that it might be subject to misinterpretation in the United States and by other countries as a restriction upon the application of the most-favored-nation principle. Such a misinterpretation would be unfortunate at a time when the American Government is engaged upon a broad program of trade restoration on the basis of the unconditional most-favored-nation principle.

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The policy of the Government of the United States in this respect is in accord with the resolution adopted at the Seventh International Conference of American States, which reads in part:

“The subscribing governments undertake, moreover, that their aim will be substantial reductions of basic trade barriers and liberalization of commercial policy as aforesaid and not merely the removal of temporary and abnormal restrictions and increments imposed for bargaining purposes.”

The Government of Ecuador also subscribed to the policy set forth in the resolution, only making the reservation indicated in the following quoted vote of the delegate of Ecuador:

“La Delegatión del Ecuador simpatiza profundamente con los propósitos de liberatión de la política comercial universal, mediante la reductión substantial de las barreras aduaneras y la eliminatión de las restricciones y prohibiciones actualmente en vigencia, enunciados por el Presidente de la Delegatión de los Estados Unidos de Norte América en la proposición en debate.

“Declara expresamente que no renuncia al derecho de pactar con los demás Estados Hispanoamericanos convenios por los que se otorguen entre sí un tratamiento de ventajas exclusivas, cuyos beneficios o favores especiales no podrán ser reclamados por otras naciones en virtud de la cláusula de la natión más favorecida, a que se hace referenda en la aludida propositión.”

It is hoped that the Ecuadoran Government can meet the desires of the Government of the United States in this regard in a way which will satisfy the requirements of Ecuadoran law and commercial policy.