611.3131/59a: Telegram

The Secretary of State to the Minister in Venezuela (Nicholson)

46. Your despatch No. 470 of September 25, 1936,19 and telegram No. 67 of October 1, 4 p.m. For a number of considerations to be mentioned hereafter the Department attaches great importance to the suspension by Venezuela of the imposition of decisive increases in its customs tariff. You are requested to seek an immediate interview with the Foreign Minister, the Minister of Finance, and with the President if in your judgment this would be advisable, and to them vigorously and forcefully set forth the Department’s point of view as set forth in its telegram No. 44 of September 22, and hereafter.

On a number of occasions the Venezuelan Government has stated its willingness to conclude a trade agreement with the United States in order, presumably, to safeguard the flow of its commerce to the United States. Although it has not been feasible for this Government to proceed with the negotiation of an agreement with Venezuela, [Page 975] this Government desires to make it clear that it is not for lack of interest or desire that it has not been possible thus far to proceed to negotiate an agreement. On the contrary, it is this Government’s hope that in the near future it will be in a position to give consideration to proceeding with the negotiation of an agreement. However, these proposed tariff increases which the Venezuelan Government is now considering would narrow the scope of any trade agreement between the two countries in a degree that might preclude negotiations. The full exercise of the authority of the Executive, mentioned by the Foreign Minister, to lower tariff rates by 25 per cent would in the case of several important items, still leave the proposed rates far above present rates. This Government is not in a position to state at this time that the proposed increases, if adopted, would preclude negotiation. It has no hesitation in stating, however, that it has invariably followed the rule of basing reciprocal concessions on the tariff rates of other countries in effect prior to any possibility of negotiations being considered. For this reason it would appear that if the Venezuelan Government is still desirous of exploring the possibilities of an agreement with the United States serious consideration should be given to this aspect of the proposed revision of the Venezuelan tariff.
You should inquire of the Venezuelan Government whether it has fully considered what the effect would be in this country were Venezuela at this time to increase its tariff on important American goods. The Venezuelan Government cannot be unaware of various measures which have been introduced into our Congress which would have the effect of greatly increasing import charges on Venezuelan products. Although none of these measures, which are earnestly desired by certain groups in this country, thus far has been adopted by Congress, it is believed that the possibility of their enactment would be greatly enhanced were the proposed tariff increases on prime American export products to become law in Venezuela. Proponents of the legislation introduced into our own Congress would be able to point to the Venezuelan tariff treatment as ground for laying new burdens on Venezuelan products.
As the Venezuelan Government is fully aware, this Government has taken the lead in endeavoring to expand the sum total of international trade as necessary and essential to the healthy economic life of this country and every country, and to the peace of the world itself. Every day there are fresh evidences of the fundamental validity of this policy, and every day there are fresh evidences of its recognition by statesmen and governments. Within the last fortnight the Economic Committee of the League of Nations has come out squarely in support of the necessity for relaxing trade restrictions of all kinds. [Page 976] The steps which have been taken to reduce trade barriers have had their beneficial effect, but they must be followed by others if trade is to attain its full measure of recovery.

It would be regrettable indeed were a country of Venezuela’s importance and traditionally moderate tariff policy to deviate from a course so generally recognized as beneficial in the long run to every country; particularly were it to act in this sense at this time, on the eve of the forthcoming conference at Buenos Aires.

  1. Not printed.