The Secretary of State to the Chargé in Ecuador (Sparks)

No. 186

Sir: With further reference to the Department’s telegram No. 18, of June 9, 1936 (1 p.m.), concerning a trade agreement with Ecuador, you are now informed that the Trade Agreements Committee has approved the initiation of preliminary conversations with the Government of Ecuador for the purpose of determining whether there exists a basis for proceeding with detailed negotiations. I enclose an excerpt23 from the minutes of the meeting of September 9, 1936, at which the Committee reached this decision. You will observe from them that the Committee attaches particular importance to obtaining concessions on wheat flour and hog lard in a possible agreement with Ecuador. I am also enclosing a copy23 of a preliminary trade study dated September 5, 1936, prepared by the Country Committee on Ecuador.

You are instructed to take this matter up on the first favorable opportunity with the Foreign Minister and to report results promptly, using the telegraph for important developments. In your interview, you may point out that in line with this Government’s sincere desire to continue to work for liberalized international trade it wishes to give at this time sympathetic consideration to a review of trade relations between the United States and Ecuador. If this review, which should be treated in a confidential way to avoid premature publicity, discloses substantial agreement in the positions of the two Governments, the Government of the United States will be disposed to make public announcement of intention to negotiate a trade agreement with Ecuador and to proceed with such negotiations.

In order that this Government’s position may be clearly defined in advance, you may inform the Foreign Minister that the Government of the United States wishes the agreement to be predicated on the unconditional most-favored-nation principle, and, so far as the general provisions are concerned, to follow the trade agreements recently concluded by this Government with Guatemala,24 Honduras,25 and Nica[Page 505]ragua.26 Copies of these agreements are enclosed herewith and may be provided the Foreign Minister for his information.

As regards the concessions which this Government might wish to obtain from the Ecuadoran Government, you may advise the Foreign Minister that it attaches special importance to substantial reductions of the present duties on wheat flour and hog lard. There will be requests on other products as well, of course, but this Government is particularly interested at this time in ascertaining what the Ecuadoran Government is prepared to do with reference to flour and lard. For your own confidential information, it would be desirable to obtain 50 percent reductions on each.

In return, this Government will be prepared to consider reducing the duty on handwoven palm leaf hats, (for your confidential information, by 50 percent), binding on the free list Ecuador’s principal exports to the United States, such as annatto, bananas, cascarilla, cacao, coffee, kapok fibre, reptile skins, tagua nuts, and balsa wood. In connection with the last-named item, this Government will also consider binding against increase the present import tax of $1.50 per M feet on sawed balsa lumber. If there are any other products now being exported to the United States in which Ecuador is interested, full data thereon should be supplied.

In connection with naranjilla juice, which was mentioned in your despatch No. 565 of October 13, 1936, it will be necessary, before a decision can be reached, to furnish further details, such as data on actual shipments to the United States and to whom consigned, in order to determine how this product is classified under the United States Tariff.

The Department believes both Governments should have a clear-cut understanding in advance with regard to the scope and content of the trade agreement, in order that they may be assured that subsequent negotiations could be successfully held.

You should emphasize the desirability of keeping confidential the conversations which you are authorized to hold.

There will be no objection to incorporating the pertinent portions of this instruction in a confidential memorandum to be left with the Foreign Minister. You should make it clear to the Foreign Minister, however, that your preliminary negotiations will of course have an ad referendum basis.

If you have any suggestions to propose on any phase of this matter you are requested to acquaint the Department with them by telegraph.

Very truly yours,

For the Secretary of State:
Francis B. Sayre
  1. Not attached to file copy.
  2. Not attached to file copy.
  3. Signed April 24, 1936; for text, see Department of State Executive Agreement Series No. 92. For correspondence, see post, pp. 584 ff.
  4. Signed December 18, 1935; for text, see Executive Agreement Series No. 86. For correspondence, see Foreign Relations, 1935, vol. iv, pp. 729 ff.
  5. Signed March 11, 1930; for text, see Executive Agreement Series No. 95. For correspondence, see post, pp. 782 ff.