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

No. 70

Sir: Reference is made to your despatch No. 190, of March 6, 1936, in which you question the advisability of including in the note to be submitted to the Foreign Office an implied protest against privileges [Page 946] granted by a recent treaty to Brazilian pine lumber over similar American lumber.

While the Department appreciates your comment, it is still of the opinion that mention of these privileges should be included in the proposed note. The tariff preference in question cannot be considered as falling within the class of privileges accorded to traffic between limited frontier zones nor to customs unions, exceptions frequently admitted to the principle of equality of tariff treatment. Nor can it be held to possess any special status or justification simply because Brazil and Uruguay are contiguous countries. No customs union exists between these two countries, nor is this tariff preference a part of an extensive reciprocity arrangement between countries closely united by ethnic, historical or economic ties of such special significance as to make it possible for the United States to acquiesce in unequal treatment to its trade.

The Department has a sympathetic appreciation of the difficulties which confront Uruguayan trade. It does not wish to criticize nor to interpose itself in Uruguay’s efforts to solve its trade problems in its own way. The Department, however, regards the maintenance of the principle of equality as a condition essential to the success of the endeavors which are being made to free and restore international trade. Obviously, if all countries should seek exclusive preferences or advantages merely on account of geographical situation or some other special circumstance, it would not be possible to proceed with any program to reduce trade barriers and thereby restore international trade.

Reports of extensions of the practice of exclusive customs preferences and bilateral trade relationships, which has developed during the depression in international trade, are used by certain elements in this country as arguments against the practicability of the liberal commercial policy, with its basis of equality of treatment, which this Government desires to pursue. This opposition hinders and retards the progress of the program of reciprocal trade agreements through which this policy is being put into effect. It would strengthen the position of this Government with respect to its trade agreements program if it could be announced that Uruguay intended to pursue a policy of strict equality of customs treatment, in accordance with the principles of the resolution on economic, commercial and tariff policy adopted by the Seventh International Conference of American States held in Montevideo in 1933.12

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In any conversations you may have in the matter with the Uruguayan authorities, you may informally express the foregoing observations.

Very truly yours,

For the Secretary of State:
Sumner Welles
  1. Report of the Delegates of the United States of America to the Seventh International Conference of American States, Montevideo, Uruguay, December 3–26, 1988 (Washington, 1934), p. 196.