The Department encloses a set of general provisions with the request that
you discuss these informally with the appropriate officials of the
Venezuelan Government as a basis for a trade agreement. You should,
however, make it clear that these proposed general provisions are of a
tentative nature and that this Government may desire to modify them at a
later stage of conversations. There is now being prepared a new draft of
an article on foreign exchange transactions for use in future trade
agreements. When this article has been completed, the Department will
send it to you as Article X of the proposed general provisions.
The remainder of this instruction is for your strictly confidential
information.
Article XI of the general provisions provides for complete and
unconditional most-favored-nation treatment. No exception has been made
to the provisions of that Article whereby the 30 percent surtax could be
levied by Venezuela on articles imported from Puerto Rico and the Virgin
Islands. The Department is giving careful study to the subject of the 30
percent surtax and will instruct you further with regard thereto at a
later date.
The desirability of binding Venezuelan national internal taxes on certain
or all of the products which may be contained in Schedule I is likewise
receiving consideration in the Department. In the event it is decided
that such taxes, on one or more products contained in Schedule I, should
be bound to the United States, it will be necessary to specifically
provide for such binding in the trade agreement, as Article V of the
general provisions, which is the only article pertaining to taxes, fees,
charges or exactions imposed on imports after
their importation, provides only for national and most-favored-nation
treatment. You are requested to transmit to the Department your views
and recommendations with respect to the desirability of requesting a
binding of Venezuelan national internal taxes on cigarettes and on any
other commodity whether or not included in the tentative Schedule I
contained in the preliminary report of the country committee on
Venezuela enclosed with the Department’s instruction No. 150 of February
10, 1937.8
You are also requested to transmit to the Department your views
concerning the addition of a clause to Article IX of the enclosed
general provisions which would insure equitable treatment to either
party to the Agreement with respect to Government purchases of foreign
products other than purchases made by a Government monopoly or licensed
agency.
The Department requests that you keep it informed by telegraph concerning
the progress of the conversations on the general provisions of the trade
agreement.
[Enclosure]
Text of General Provisions of Trade Agreement as
Proposed by the Department of State
The President of the United States of America and the President of
the United States of Venezuela, desiring to strengthen the
traditional bonds of friendship between the two countries by
maintaining the principle of equality of treatment as the basis of
commercial relations and by granting mutual and reciprocal
advantages for the promotion of trade have decided to conclude a
trade agreement and for that purpose have appointed their
Plenipotentiaries as follows:
The President of the United States of America:
The President of the United States of Venezuela:
Who, after having exchanged their full powers, found to be in good
and due form, have agreed upon the following Articles:
Article I
Articles the growth, produce or manufacture of the United States of
America, enumerated and described in Schedule I annexed to this
Agreement and made a part thereof, shall, on their importation into
the United States of Venezuela, be exempt from ordinary customs
duties in excess of those set forth in the said Schedule.
The said articles shall also be exempt from all other duties, taxes,
fees, charges or exactions, imposed on or in connection with
importation, in excess of those imposed on the day of the signature
of this Agreement or required to be imposed thereafter under laws of
the United States of Venezuela in force on the day of the signature
of this Agreement.
Article II
Articles the growth, produce or manufacture of the United States of
Venezuela, enumerated and described in Schedule II annexed to this
Agreement and made a part thereof, shall, on their importation [Page 751] into the United States of
America, be exempt from ordinary customs duties in excess of those
set forth in the said Schedule. The said articles shall also be
exempt from all other duties, taxes, fees, charges or exactions,
imposed on or in connection with importation, in excess of those
imposed on the day of the signature of this Agreement or required to
be imposed thereafter under laws of the United States of America in
force on the day of the signature of this Agreement.
Article III
The provisions of Articles I and II of this Agreement shall not
prevent the Government of either country from imposing at any time
on the importation of any product a charge equivalent to an internal
tax imposed in respect of a like domestic product or in respect of a
commodity from which the imported product has been manufactured or
produced in whole or in part.
Article IV
The United States of America and the United States of Venezuela agree
that the notes included in Schedules I and II, respectively, are
hereby given force and effect as integral parts of this
Agreement.
Article V
Articles the growth, produce or manufacture of the United States of
America or the United States of Venezuela, shall, after importation
into the other country, be exempt from all internal taxes, fees,
charges or exactions, other or higher than those payable on like
articles of national origin or any other foreign origin.
Article VI
In respect of articles the growth, produce or manufacture of the
United States of America or the United States of Venezuela,
enumerated and described in Schedules I and II, respectively,
imported into the other country, on which ad valorem rates of duty
or duties based upon or regulated in any manner by value, are or may
be assessed, it is understood and agreed that the bases and methods
of determining dutiable value and of converting currencies shall be
no less favorable to importers than the bases and methods prescribed
under laws and regulations of the United States of Venezuela and the
United States of America, respectively, in force on the day of the
signature of this Agreement.
Article VII
The United States of Venezuela will not impose any prohibition,
import or customs quotas, import licenses or any other form of
quantitative regulation, whether or not operated in connection with
any [Page 752] agency of centralized
control, on the importation or sale of any article the growth,
produce or manufacture of the United States of America, enumerated
and described in Schedule I, nor will the United States of America
impose any prohibition, import or customs quotas, import licenses or
any other form of quantitative regulation, whether or not operated
in connection with any agency of centralized control, on the
importation or sale of any article the growth, produce or
manufacture of the United States of Venezuela, enumerated and
described in Schedule II.
The foregoing provision shall not apply to quantitative restrictions
in whatever form imposed by the United States of America or the
United States of Venezuela on the importation or sale of any article
the growth, produce or manufacture of the other country, in
conjunction with governmental measures operating to regulate or
control the production, market supply or prices of like domestic
articles, or tending to increase the labor costs of production of
such articles. Whenever the Government of either country proposes to
establish or change any restriction authorized by this subparagraph,
it shall give notice thereof in writing to the other Government and
shall afford such other Government an opportunity within thirty days
after receipt of such notice to consult with it in respect of the
proposed action; and if an agreement with respect thereto is not
reached within thirty days following receipt of the aforesaid
notice, the Government which proposes to take such action shall be
free to do so at any time thereafter, and the other Government shall
be free within fifteen days after such action is taken to terminate
this Agreement in its entirety on thirty days’ written notice.
Article VIII
- 1.
- If the Government of the United States of America or the
Government of the United States of Venezuela establishes or
maintains any form of quantitative restriction or control of the
importation or sale of any article in which the other country
has an interest, or imposes a lower import duty or charge on the
importation or sale of a specified quantity of any such article
than the duty or charge imposed on importations in excess of
such quantity, the Government taking such action will:
- (a)
- Give public notice of the total quantity, or any
change therein, of any such article permitted to be
imported or sold or permitted to be imported or sold at
such lower duty or charge, during a specified
period;
- (b)
- Allot to the other country for such specified period a
share of such total quantity as originally established
or subsequently changed in any manner, equivalent to the
proportion of the total importation of such article
which such other country supplied during a previous [Page 753] representative
period, unless it is mutually agreed to dispense with
such allotment; and
- (c)
- Give public notice of the allotments of such quantity
among the several exporting countries, and at all times,
upon request, advise the Government of the other country
of the quantity of any such article the growth, produce
or manufacture of each exporting country, which has been
imported or sold or for which licenses or permits for
importation or sale have been granted.
- 2.
- Neither the United States of America nor the United States of
Venezuela shall regulate the total quantity of importations into
its territory or sales therein of any article in which the other
country has an interest by import licenses or permits issued to
individuals or organizations, unless the total quantity of such
article permitted to be imported or sold during a quota period
of not less than three months shall have been established, and
unless the regulations covering the issuance of such licenses or
permits shall have been made public before such regulations are
put into force.
Article IX
In the event that the Government of the United States of America or
the Government of the United States of Venezuela establishes or
maintains a monopoly for the importation, production or sale of a
particular commodity or grants exclusive privileges, formally or in
effect, to one or more agencies to import, produce or sell a
particular commodity, the Government of the country establishing or
maintaining such monopoly, or granting such monopoly privileges,
agrees that in respect of the foreign purchases of such monopoly or
agency the commerce of the other country shall receive fair and
equitable treatment. To this end it is agreed that in making its
foreign purchases of any product such monopoly or agency will be
influenced solely by those considerations, such as price, quality,
marketability, and terms of sale, which would ordinarily be taken
into account by a private commercial enterprise interested solely in
purchasing such product on the most favorable terms.
Article X
(The text of this Article pertaining to foreign exchange, will be
furnished later.)
Article XI
With respect to (1) customs duties or charges of any kind imposed on
or in connection with importation or exportation; (2) the method of
levying such duties or charges; (3) all rules and formalities in
connection with importation or exportation; and (4) all laws or
regulations affecting the sale or use of imported goods within the
country, any advantage, favor, privilege or immunity which has been
or [Page 754] may hereafter be
granted by the United States of America or the United States of
Venezuela to any article originating in or destined for any third
country, shall be accorded immediately and unconditionally to the
like article originating in or destined for the United States of
Venezuela or the United States of America, respectively.
Article XII
Laws, regulations of administrative authorities and decisions of
administrative or judicial authorities of the United States of
America or the United States of Venezuela, respectively, pertaining
to the classification of articles for customs purposes or to rates
of duty shall be published promptly in such a manner as to enable
traders to become acquainted with them. Such laws, regulations and
decisions shall be applied uniformly at all ports of the respective
country, except as otherwise specifically provided in statutes of
the United States of America relating to articles imported into
Puerto Rico.
No administrative ruling by the United States of America or the
United States of Venezuela effecting advances in rates of duties or
in charges applicable under an established and uniform practice to
imports originating in the territory of the other country, or
imposing any new requirement with respect to such importations,
shall be effective retroactively or with respect to articles either
entered for or withdrawn for consumption prior to the expiration of
thirty days after the date of publication of notice of such ruling
in the usual official manner. The provisions of this paragraph do
not apply to administrative orders imposing anti-dumping duties, or
relating to regulations for the protection of human, animal, or
plant life, or relating to public safety, or giving effect to
judicial decisions.
Article XIII
In the event that a wide variation occurs in the rate of exchange
between the currencies of the United States of America and the
United States of Venezuela, the Government of either country, if it
considers the variation so substantial as to prejudice the
industries or commerce of the country, shall be free to propose
negotiations for the modification of this Agreement or to terminate
this Agreement in its entirety on thirty days’ written notice.
Article XIV
There will not be imposed in the United States of America or in the
United States of Venezuela, on importations of articles the growth,
produce or manufacture of the other country, greater than nominal
penalties because of errors in documentation, made in the country of
export, provided it can be established by the importer or other
party [Page 755] in interest to the
satisfaction of the customs authorities that the errors were
clerical in origin or were made in good faith.
The Government of each country will accord sympathetic consideration
to such representations as the other Government may make with
respect to the operation of customs regulations, quantitative
restrictions or the administration thereof, the observance of
customs formalities, or the application of sanitary laws and
regulations for the protection of human, animal, or plant life; and
upon request it will afford adequate opportunity for consultation
regarding such representations.
Article XV
- 1.
- Except as otherwise provided in paragraph 2 of this Article,
the provisions of this Agreement relating to the treatment to be
accorded by the United States of America or the United States of
Venezuela, respectively, to the commerce of the other country,
shall not apply to the Philippine Islands, the Virgin Islands,
American Samoa, the Island of Guam, or to the Panama Canal
Zone.
- 2.
- Subject to the reservations set forth in paragraphs 3, 4, and
5 of this Article, the most-favored-nation provisions of this
Agreement shall apply to articles the growth, produce or
manufacture of any territory under the sovereignty or authority
of the United States of America or the United States of
Venezuela, imported from or exported to any territory under the
sovereignty or authority of the other country. It is understood,
however, that the provisions of this paragraph do not apply to
the Panama Canal Zone.
- 3.
- The advantages now accorded or which may hereafter be accorded
by the United States of America or the United States of
Venezuela to adjacent countries in order to facilitate frontier
traffic and advantages resulting from a customs union to which
either the United States of America or the United States of
Venezuela may become a party shall be excepted from the
operation of this Agreement.
- 4.
- The advantages now accorded or which may hereafter be accorded
by the United States of America, its territories or possessions
or the Panama Canal Zone to one another or to the Republic of
Cuba shall be excepted from the operation of this Agreement. The
provisions of this paragraph shall continue to apply in respect
of any advantages now or hereafter accorded by the United States
of America, its territories or possessions or the Panama Canal
Zone to one another, irrespective of any change in the political
status of any of the territories or possessions of the United
States of America.
- 5.
- Nothing in this Agreement shall be construed to prevent the
adoption of measures prohibiting or restricting the exportation
or [Page 756] importation of gold
or silver, or to prevent the adoption of such measures as either
Government may see fit with respect to the control of the export
or sale for export of arms, ammunition, or implements of war,
and, in exceptional circumstances, all other military
supplies.
- 6.
- Subject to the requirement that, under like circumstances and
conditions, there shall be no arbitrary discrimination by either
country against the other country in favor of any third country,
and without prejudice to the provisions of the second paragraph
of Article XIV, the provisions of this Agreement shall not
extend to prohibitions or restrictions (1) imposed on moral or
humanitarian grounds; (2) designed to protect human, animal or
plant life; (3) relating to prison-made goods; (4) relating to
the enforcement of police or revenue laws; (5) directed against
misbranding, adulteration, and other fraudulent practices, such
as are provided for in the pure food and drug laws of either
country; and (6) directed against unfair practices in import
trade.
Article XVI
In the event that the United States of America or the United States
of Venezuela adopts any measure which, even though it does not
conflict with the terms of this Agreement, is considered by the
Government of the other country to have the effect of nullifying or
impairing any object of the Agreement, the Government of the country
which has adopted any such measure shall consider such
representations and proposals as the Government of the other country
may make with a view to effecting a mutually satisfactory adjustment
of the matter.
Article XVII
The present Agreement shall come into force on the thirtieth day
following proclamation thereof by the President of the United States
of America and the President of the United States of Venezuela, or
should the proclamations be issued on different days, on the
thirtieth day following the date of the later in time of such
proclamations, and shall remain in force for the term of three years
thereafter, unless terminated pursuant to the provisions of Article
VII, X, or XIII. The Government of each country shall notify the
Government of the other country of the date of its proclamation.
Unless at least six months before the expiration of the aforesaid
term of three years the Government of either country shall have
given to the other Government notice of intention to terminate this
Agreement upon the expiration of the aforesaid term, the Agreement
shall remain in force thereafter, subject to termination under the
provisions of Article VII, X, or XIII, until six months from such
time as the Government of either country shall have given notice to
the other Government.
[Page 757]
In witness whereof the respective Plenipotentiaries have signed this
Agreement and have affixed their seals hereto.
Done in duplicate, in the English and Spanish languages, both
authentic, at the city of Caracas, this . . . . . . day of . . . . .
., nineteen hundred and thirty-seven.
For the President of the United States of America:
(seal) . . . . . . .
For the President
of the United States of Venezuela:
(seal) . . . . . . .
