633.113/21

The Secretary of State to the Minister in Uruguay ( Lay )

No. 54

Sir: The Department acknowledges the receipt of your despatch No. 148, of January 9, 1936, with respect to Uruguayan customs discriminations on certain American products, and enclosing a draft of a note on this subject which you propose to address to the Uruguayan Minister of Foreign Affairs.

The Department is of the opinion that your observations should not be confined to the discrimination resulting from the practice of converting that portion of Uruguayan customs duties payable in gold at differential rates according to the origin and nature of the importation, but that you should also discuss the question of the tariff preference given Brazilian pine over American pine lumber reported in your despatch No. 128 of December 6, 1335,9 and the tariff preference accorded imports from Spain of sardines and oil and other products reported in your despatch No. 139 of December 27.9 If you believe that it is desirable to submit your observations in writing in order to insure their careful consideration by the proper Uruguayan authorities, you are authorized to address a note to the Minister of Foreign Affairs along the lines of the draft note herewith enclosed.

You will note that some revision has been made of the draft submitted in your despatch under acknowledgment. The Department deemed it desirable to eliminate the fourth paragraph of your note as it would seem to imply that tariff discrimination was more objectionable than discrimination resulting from exchange control and [Page 944] quantitative restrictions on trade and might therefore be interpreted as conveying some measure of acquiescence in these latter restrictions.

In connection with the tariff preferences accorded Brazilian pine there is transmitted for your information and comment a table prepared by the National Lumber Manufacturers Association, contrasting Uruguayan tariff treatment of lumber from South American countries and from the United States. Your comments as to whether the official valuation of American hardwoods has the same relation to their actual market price as the official valuation of the South American hardwoods has to their local selling price would be appreciated.

Very truly yours,

For the Secretary of State:
William Phillips
[Enclosure]

Draft of a Note To Be Presented, to the Uruguayan Minister for Foreign Affairs

Excellency: I have the honor to refer to my note of August 10, 1935,11 with reference to the practice of Uruguayan Customs in levying on certain merchandise customs duties lower than have been levied on like merchandise from the United States of America, and to Your Excellency’s reply dated December 23, 1935,11 embodying an opinion of the Bank of the Republic to which the question was referred.

It appears that the Bank of the Republic is not clear as to the basis of the discrimination which was alleged in my note. The bank has explained the manner of determining the rates of liquidations of duties applied against the numerous products of the United States and other countries, but the reason for establishing varying rates or the mechanics involved in obtaining these variations do not appear to affect the issue. My Government has also instructed me to bring to Your Excellency’s attention the fact that Brazilian pine is now admitted free of duty when entering Uruguay through land or river ports, whereas American pine lumber is subject to the payment of customs duties. My Government has also been informed that imports from Spain into Uruguay of sardines in oil, and tuna fish in oil, are exempted from the payment of twenty-five per cent of the Uruguayan customs duties in gold or its equivalent, and that such exemption is apparently not accorded to like American products.

I therefore earnestly request Your Excellency to give this question early consideration, with a view to restoring to the American products affected the equality of treatment which my Government extends to Uruguayan products.

I avail myself of this occasion to renew to Your Excellency the assurances of my highest consideration.

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