The Acting Secretary of State to the Ambassador in Peru (Dearing)
28. Your 36, June 19, noon.
(1) With reference to the reported impending agreement between Peru and Great Britain please ascertain definitely whether the report is correct that the proposed agreement will accord exclusive preferences to Great Britain. If so, take up the matter orally with the Foreign Minister in the following sense: You should express the deep regret with which this Government would view the conclusion of an exclusive bilateral agreement by such an important trading nation as Peru, which, whatever the apparent temporary advantages, would be deleterious to the broader interests of trade as a whole. Such action by the Peruvian Government would be a departure from the principles set forth in the Resolution on Economic, Commercial and Tariff Policy33 which was unanimously adopted by the governments of this hemisphere at the Seventh International Conference of American States at Montevideo. In that Resolution the subscribing governments declared “that the principle of equality of treatment stands and must continue to stand as the basis of all acceptable commercial policy. Accordingly, they undertake that whatever agreements they enter into shall include the most-favored-nation clause in its unconditional and unrestricted form, to be applied to all types of control of international trade, limited only by such exceptions as may be commonly recognized as legitimate, and they undertake that such agreements shall not introduce features which, while possibly providing an immediate advantage for the contracting parties, might react disadvantageously upon world trade as a whole”.
In accordance with this policy the United States Government has extended to Peru the benefits of all duty reductions and concessions granted under its trade agreements with other countries. This Government assumes that the Government of Peru will no doubt wish to consider whether it desires to enter into an agreement which would deviate from the broad principles set forth in the resolution unanimously adopted at Montevideo, particularly since any such step would be at variance with the purposes of the forthcoming Inter-American Conference at Buenos Aires34 as set forth in the proposed agenda, one of which is the adoption of measures to promote closer economic relations [Page 913] among the American republics based upon the broad principle of equality of opportunity.
(2) With reference to your despatch No. 4592, June 9,34a the Department is making a careful study of the possibilities of a trade agreement and of the various questions which will arise in connection therewith. This study will give direction to the exploratory conversations with the Peruvian authorities. Until the results of this study are known, it seems advisable to avoid if possible any further discussions of this matter except in the most general terms.