Foreign Relations of the United States Diplomatic Papers, 1937, The American Republics, Volume V

611.3531/547

Memorandum of Conversation, by the Chief of the Division of Trade Agreements (Hawkins)

[ Washington ,] October 30, 1937.

Participants:	Ambassador Espil of Argentina
	Mr. Sayre8
	Mr. Hawkins

Mr. Sayre inquired of Mr. Espil whether any information had been received regarding the removal of Argentine exchange discrimination. Mr. Espil said that he had no information from his Government on this subject and went on to say that he thought there was a good deal of misunderstanding regarding this matter. He said that the removal of the exchange discriminations was not a simple problem that could be easily and quickly solved; that he felt that it could only be dealt with in relation to trade agreement negotiations. He was not very explicit as to exactly what he meant by this, but said, among other things, that at the time of announcement of trade agreement negotiations, at least something could be done about removing the discrimination, and that a complete solution of the question could be worked out in the course of the negotiations.

Mr. Sayre stated that failure of the Argentine Government to remove the discriminations at an early date would greatly increase the difficulty of trade agreement negotiations from our standpoint. He explained that the negotiation of an agreement with Argentina involved sufficient difficulties in view of the fact that it would have to provide for concessions on agricultural products, and that it is highly important that we should not go into those negotiations with the additional handicap of continued discrimination by Argentina against American trade. Mr. Sayre made it clear that he did not now lay down any condition, but that it is highly important from our standpoint that the exchange problem be adjusted at an early date, and in any event prior to any public announcement of trade agreement negotiations.

The discussion then turned to the program for further discussions on the terms of a trade agreement. Mr. Sayre emphasized that any discussion of the products involved could not of course involve any definite commitments on our part as this is not legally possible prior to a public announcement and hearings. Mr. Espil said he quite understood this. Mr. Sayre inquired whether the Argentine Government would like to add to the lists of concessions to be requested of the United States which were presented in 1933⁹ and at Buenos Aires last December.¹⁰ Mr. Espil thought it would be unnecessary to add anything to the list of requests at this time and asked whether we could not in the course of our studies consider any products which might occur to us in which the Argentine Government might be interested. Mr. Sayre told Mr. Espil that our studies on products for consideration in the trade agreement negotiations are virtually completed and that our proposals, in as definite form as they can be made prior to public hearings, would be available in a week or 10 days, or two weeks at the very latest. These proposals as to the possible terms of the agreement would include our proposals as to the text of the general provisions.

Mr. Espil indicated that the foregoing arrangement is entirely satisfactory to him. He said that a Mr. Garcia Arias who is an expert on trade matters and is now stationed in London, will be assigned to the staff of the Argentine Embassy here. Mr. Arias has not yet sailed from London and presumably will not be here before our studies have been completed. However, when the proposals are completed, they could be discussed tentatively with Mr. Espil pending the arrival of Mr. Arias. The real purpose of Mr. Arias assignment would of course be kept confidential. It will be given out that he is assigned as a regular member of the Embassy staff.

Mr. Espil then referred to the Sanitary Convention¹¹ and said that apparently there is no chance of its receiving Senate approval. In view of this he raised the question whether Section 306 of the Tariff Act¹² could not be modified by the trade agreement. He said his study of the Trade Agreements Act¹³ indicated that this can legally be done. Mr. Sayre replied that he thought it would be extremely unwise to connect the Sanitary Convention with the trade agreement as it would cause an emotional reaction against the trade agreement. He said that he had been giving some thought to the question and while he had not mentioned it to the Secretary, he was inclined to the personal view that consideration might be given to a statutory amendment of Section 306. He said that this only represented his personal thought on the subject and he was not sure whether this would be feasible.

Mr. Espil said that he had under consideration the question whether Argentine beef might not be brought into the free port at New York and distributed from there to Caribbean countries and elsewhere, and also sold to ships as ships stores. He said there was a legal question whether landing the beef at the free port would be considered “importation” within the meaning of Section 306 of the Tariff Act. Mr. Sayre offered to look into the question for him. Mr. Espil expressed his appreciation but did not press the point.

H[arry] H[awkins]

8. Francis B. Sayre, Assistant Secretary of State.
9. See memorandum from the Argentine Embassy, October 5, 1933, Foreign Relations, 1933, vol. iv, p. 661.
10. See memorandum by the Argentine Government, ibid., 1936, vol. v, p. 179.
11. Signed May 24, 1935, Foreign Relations, 1935, vol. iv, p. 296.
12. Approved June 17, 1930; 46 Stat. 590, 689. Section 306 prohibited in certain cases the importation of cattle, sheep, swine, and meats.
13. Approved June 12, 1934; 48 Stat. 943.