The Chargé in Guatemala (O’Donoghue) to the Secretary of State

No. 885

Sir: With reference to the Department’s telegram No. 2 of February 4, 12 Noon, in connection with the exceptions taken to certain articles and notes of the proposed Trade Agreement, I have the honor to transmit herewith a copy and translation of a note from the Minister for Foreign Affairs, No. 1581, of February 11, 1936, wherein he transcribed a note dated February 10 from the Minister of Hacienda and Public Credit.

It will be observed that the Government of Guatemala finds itself unable to agree to the exception taken with regard to Article VIII and, in reply to an inquiry upon my part, the Foreign Minister stated that it would be necessary to eliminate the article in question unless the exception proposed is acceptable to the Department.

With regard to Article IX it will be remarked that the Minister agrees to the elimination of the concluding paragraph in the Spanish text provided that it be stated in the Agreement and at the end of Article IX that “For non-commercial transactions the control of foreign exchange shall be applied in a non-discriminatory manner as between citizens of the United States and nationals of another country.”

As to the phrases included in the Notes 1 and 2 of the proposed agreement the Foreign Minister assures me verbally that the Sanitary Regulations now in force throughout the Republic were enacted some years ago and have been applied without discrimination to any and all imports of food and drug products without having received any complaints from local merchants. Consul General Marsh confirms this.

Respectfully yours,

Sidney E. O’Donoghue

The Guatemalan Minister for Foreign Affairs (Skinner Klee) to the American Chargé (O’Donoghue)

No. 1581

Mr. Chargé: I have the honor to transcribe to Your Honor, for your information, the note which I have received from the Ministry of Hacienda and Public Credit, dated yesterday:

Mr. Secretary: With your courteous note number 1308, dated the 6th of the present month, I was pleased to receive a copy of the valued communication which was addressed to you the preceding day by His Excellency the Minister of the United States of America, containing [Page 588] the objections which his Government raises as to Articles VIII and IX and the two first notes added to the draft of the Trade Agreement which is about to be entered into between the two countries.

After studying and considering in detail the objections made in this request, I have the honor to express to you the opinion of this Ministry in order that you may please decide that which you deem most convenient;

The final paragraph of Article VIII, included by the Government of the Republic m the Spanish text of the draft of the Agreement, tends to exempt from the provisions of favored commerce matches, wax matches and automatic lighters in view of the fact that the laws which govern the monopoly of said products and the lease contracts entered into with the “Svenska Tandstiks Aktiebolaget” of Stockholm, Sweden, approved by decrees of the National Legislative Assembly, maintain suspended official action insofar as the organization, administration and management of that industry is concerned. With that idea in mind and in accordance with the abovementioned provisions, the Government of the Republic cannot obligate the monopoly company to give preference over its own articles manufactured in Sweden to the same kind of North American articles, especially since that company has free entry for the importation, re-exportation and sale of its products.

On the other hand, according to sections 6 and 7 of the Contract under reference, the Government is obliged not to manufacture, import, export, re-export, retail or permit transit through the territory of the Republic of matches, automatic lighters and similar products which do not belong to the Company or which are not transported duly protected by a bill of lading issued by that company.

Under such adverse conditions, imposed by the lack 01 foresight or generosity of prior administrations, the present Government cannot enter into an agreement with any country or corporation on favored trade of this kind, notwithstanding the pleasure with which it would be disposed to negotiate with the illustrious North American Government.

The fears expressed that there may exist in Guatemala certain sanitary laws which, if enforced, in conformity with notes I and II added to the draft would defeat the purposes in view, has no basis because in the Republic there are no other laws on the subject than the law governing the importation, trade, manufacture and elaboration, storage and use of medicinal products and narcotic drugs, which has been fully applied since August 12, 1932, and the Sanitary Code which has been in force since May 14 of that same year.

Aside from these laws, well known and accepted favorably by all importers and merchants—including those of the United States by the warrant stamp printed on their products—there are no other laws or orders in Guatemala which limit the entry or sale of drugs and medicines, there being required of course for the entry of food products a certificate from the Laboratory of the General Bureau of Customs in which the good condition and purity of the products is guarantied.

The original purpose of the notes added, as was explained in this Ministry by the Chargé d’Affaires and Consul of the United States, was that in Guatemala certificates from federal agencies would not be demanded as said federal agencies do not exist in their country, and, in that sense, this Office made the pertinent clarifications to the [Page 589] Ministry for Foreign Affairs in note number 16295 of October 7, 1935, stating that the objections of the Bureau of Public Sanitation had not been interpreted in the right sense given to them by the distinguished American officials.

This Ministry is of the opinion that, as the above mentioned additional notes are now drawn up, they comply with the purpose then set forth by the American Legation and protect the sanitary interests of the country, the Government of which, supervising the health and life of the inhabitants, cannot, without failing in its high and important duties as the guardian of the physical and moral welfare of the Guatemalan people, lessen its supreme vigilance in this sense.

The General Bureau of Public Health has on repeated occasions exposed that there are current cases of having to refuse toxic, stale or adulterated products, some of them of North American manufacture—the Minister understanding clearly that in all countries of the world there are merchants who pay more attention to the economic welfare of their companies than to the interest and health of their consumers. The laws which are in force in Guatemala on the subject are universally applied just as in the United States exist severe restrictions on retail selling which protect the health of that great nation.

As to the statements as to Article II of the draft and in view of the explanations of the Minister the Ministry under my charge believes that it can well agree to the elimination of the paragraph included in the Spanish text provided that it be stated in the Agreement and in the final part of Article IX, that “for non-commercial transactions, the control of foreign exchange shall be applied in a nondiscriminatory manner as between citizens of the United States and nationals of another country” as that distinguished representative so states literally.

I avail myself of this opportunity to renew to the Minister the assurances of my highest and most distinguished consideration.

(s) J. González Campo.

I avail myself [etc.]

A. Skinner Klée