561.35E1/332: Telegram

The Chairman of the American Delegation (Davis) to the Secretary of State

21. At a meeting of the heads of delegations this morning a supplementary report was submitted by the Negotiating Committee.20 After some discussion the following export quotas were agreed upon tentatively and the Negotiating Committee was authorized to appoint a drafting committee and to proceed with preparation of a complete agreement for subsequent submission to a plenary session of the Conference.

Basic export quotas are as follows: Belgium 20,000 tons; Brazil 60,000; Cuba 940,000; Czechoslovakia 250,000; Germany 120,000; Haiti 32,500; Hungary 40,000; Java 1,050,000; Mozambique 30,000; Peru 330,000; Poland 120,000; Dominican Republic 400,000; Soviet Union 230,000; reserve for countries which have not exported to the free market in 1934–36, that is, France and Yugoslavia, 47,500. Total 3,670,000.

These [are] the basic quotas for the life of the agreement but have been adjusted by increases or decreases for the year 1937–38 resulting in the following changed figures: Belgium 15,000 tons; Czechoslovakia 340,000; Germany 50,000; Hungary 20,000; Poland 100,000; Soviet Union 218,500; reserve for countries like France and Yugoslavia 25,000. Total net quota for 1937–38 3,611,000 tons.

The Sugar Council to be set up by the agreement will be empowered to require in the first 2 years a reduction of quotas by a uniform percentage not exceeding 5% in either year, this percentage being calculated on the net quota figures. The Council will not have power to require any reductions of basic quotas in subsequent years but can make recommendations to the Governments regarding reductions.

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The Negotiating Committee’s report expresses the opinion that free market requirements in the first year may somewhat exceed 3,300,000 metric tons and that considerable amounts of sugar not covered by reductions 1937–38 adjustments will not in fact be exported during that year.

After the first year the following additions to basic quotas are provided for: Czechoslovakia second year 60,000 tons, third year 25,000.

In meeting this morning, United Kingdom in view of increase in total export quotas, reserved the right to transfer to colonies any unutilized difference between actual British production and the maximum production which they had heretofore reserved for themselves.

While there are still subsidiary questions, such as that for setting up appropriate machinery for administering the agreement and provisions as to reserve stocks which will have to be thrashed out, the present indications are that an agreement will be completed on the basis of the above allocation of quotas.

  1. Proceedings and Documents of the Conference, p. 57.