The Ambassador in Peru (Dearing) to the Secretary of State
[Received June 16.]
Sir: I have the honor to refer to my despatch No. 4559 of May 18th regarding possible exploratory conversations looking to the negotiation of a trade agreement between Peru and the United States, and to [Page 931] inform the Department that I have recently discussed this matter both with the President and with the Minister for Foreign Affairs.
During a luncheon on board the U. S. S. Louisville tendered to the President on June 1st by Admiral Snyder, officer in command of the naval units recently visiting Peru, I sat next to the President and we had an opportunity to talk, among other things, about the advantages that would arise from a trade treaty between Peru and the United States similar to the trade treaties we have negotiated with other countries.
Recalling the President’s great emphasis upon the situation of Peruvian sugar planters, I spoke to him in the same way that I have reported having spoken to Dr. Ulloa, the Minister of Foreign Affairs, in my despatch No. 4559 of May 18th, but added that although nothing could be done now, some day in the future the situation might change and it might be possible to do something for sugar. I remarked to the President, however, that the case of American sugar producers was actually no less painful than that of the Peruvian sugar planters.
I then went on to say to the President that many other things were traded in between the two countries and that it seemed to me it ought to be possible to find a way to do something advantageous in the case of a number of articles, or at least to assure ourselves, for a reasonable length of time, that nothing more disadvantageous than the present situation would develop. I stressed the fact that under the most favored treatment Peru stood to benefit, not only by what might be achieved in the direct exchanges, but by concessions made in a number of other treaties.
The President seemed to be interested in what I had to say, remarked that he thought exploratory conversations would be advantageous, and told me I might initiate conversations to this end with the Foreign Minister.
Heretofore the President has been reluctant even to talk about a trade treaty, hoping by emphasizing the sugar situation, to oblige us to include sugar in any conversations we might have. He seems now to realize at last that the Embassy has been sincere in what it has had to say regarding sugar, and that notwithstanding the fact that his wishes cannot be met for the present, it would be worth while, and a start in the right direction, to consider the remainder of the commerce between the two countries and see what can be done to benefit it.
I have followed up my conversation with the President by sending him a purely personal note in which I enclose to him an article by Walter Lippmann which undertakes to do away with some misconceptions about the effect of imports. It was published in the New York Herald Tribune about the middle of May and is entitled “Topsy Turvydom”.[Page 932]
When I was speaking to the Minister of Foreign Affairs on the afternoon of June 8th, I mentioned the conversations I had had with President Benavides. The Minister said the President had spoken about them and I got the impression that the Minister had also been shown the personal note I had sent to the President. I repeated to Dr. Ulloa once more what I have set out in my despatch No. 4559 of May 18th and what I have said to the President.
The Minister seemed quite prepared to initiate the exploratory conversations but told me that he wished to prepare himself technically to a certain extent. I said to him that I thought it would be advantageous if he could let me know what Peru would like to obtain in a trade treaty such as we had in mind. To this the Minister replied that Señor Pedro Paulet, of the Commercial Division of the Foreign Office, would be back in Lima on Saturday, June 13th, and that he would have Señor Paulet take up the matter and give us some sort of an initial statement or memorandum.
I said to Dr. Ulloa that the sort of agreement we were seeking was, of course, one which would be mutually advantageous, but with some definite information in hand as to what Peru would like to obtain, the exploratory conversations could begin.
In this connection may I inquire whether the Department as a matter of tactics prefers to await an expression of Peru’s wishes or whether it would care to inform the Embassy what our own Government would like to have and whether it is prepared to make certain concessions?
Since the outstanding fact in the whole situation is that our tariff rates bar practically all of Peru’s major products from the American market, there may be some advantage in our making an initial move and in offering some concessions as a starter.
I shall greatly appreciate as much guidance from the Department as possible in this matter of the exploratory conversations, and I shall be obliged for specific instructions as to whether, in view of the other work falling upon the trade treaty officials of the Department it is desired that this matter shall now be vigorously followed up.
The Department has doubtless been informed that Señor Pedro E. Paulet of the Foreign Office, together with Señor Guillermo Salinas Cossio and Señor Juan Chávez Dartnell, have been in Chile to straighten out various questions arising under the Chilean-Peruvian treaty of commerce. The Communiqué of the Chilean Foreign Office—published in Lima this morning—states that the Peruvian-Chilean delegates have just completed twelve conferences initiated the 11th of May, and that all of the questions between the two countries have been quite satisfactorily settled.[Page 933]
I enclose herewith a clipping54 quoting the Chilean Foreign Office’s communiqué which the Department also has doubtless received from our Embassy in Santiagó.
I have the honor to await the Department’s specific instructions.55