The Ambassador in Peru ( Dearing ) to the Secretary of State
[Received May 27.]
Sir: I have the honor to refer to the Embassy’s despatch No. 4360 of January 10, 1936, reporting a conversation with Dr. Carlos Concha, the Foreign Minister at that time, regarding the possibility of the inauguration of negotiations for a trade agreement between Peru and the United States.
On my visit to the Foreign Office on May 9th, I spoke to Dr. Ulloa, the present Foreign Minister with regard to the possibility of exploratory conversations to prepare the way for a trade agreement. Dr. Ulloa said that the question was one of obvious interest for the present because he was on the point of closing up the negotiations for the trade treaty with Great Britain,52 which was Peru’s best [Page 930] market for her exports. He said the Trade Treaty with Great Britain would be signed here in Lima and that he expected the ceremony would take place within a month’s time. After that and after Peru knows what her situation is vis-à-vis Great Britain, the Minister indicated he would be prepared to have an informal talk with me about trade arrangements with the United States.
I suggested to Dr. Ulloa, as I had to his predecessor, that sugar was not the only thing in the world and that while I could appreciate the Peruvian Government’s attitude in the matter, there were many other things that could be traded and that I hoped we could talk about them and leave sugar until some time when some change in the situation would offer a prospect of doing something to assist the issue there.
I pointed out to the Minister that while the situation of the Peruvian sugar producers was distressing, that that of a good many sugar producers in the west and in the south of the United States was equally so, and that our Government had exactly the same motive for protecting its sugar producers that the Peruvian Government had for protecting its own.
The Minister seemed to understand the nature of the case and of the difficulty constituted by the Jones-Costigan Act53 and the administration of the Act by the Agricultural Department.
Mr. Iglehart, President of W. E. Grace & Company, who called at the Embassy a few days ago, mentioned the importance of the sugar and the trade treaty questions for the Grace line and expressed the opinion that our Government might be giving almost too much consideration to the Cuban situation. This, of course, is a large subject about which there could be a lot of difference of opinion. He also added that President Benavides had informed him Peru could do better in servicing the National Debt, if it could sell more of its products in the United States. While the President’s statement is quite obvious, it is certainly not quite an adequate excuse for Peru’s poor performance on the debt obligation.