611.3131/104
The Secretary of State to
the Minister in Venezuela (Nicholson)
No. 184
Washington, June 11, 1937.
Sir: With reference to your telegram No. 64 of
May 21 last, reporting a discussion on the day previous between you and
the Minister of Foreign Affairs in regard to a possible reciprocal trade
agreement, you are requested, unless you perceive objection, to present
to the Minister a memorandum incorporating the substance of the enclosed
draft.
You may also state orally to the Minister of Foreign Affairs that the
preliminary studies by this Government with respect to a possible trade
agreement between the United States and Venezuela indicate the
possibility, subject of course to developments following public
announcement and the presentation of views by private interests in this
country, of tariff and import tax reductions on the part of the United
States affecting, on the basis of 1935 figures, approximately 67 percent
of Venezuela’s total direct exports to the United States, in addition to
bindings of present tariff treatment on about 22 percent of Venezuela’s
direct exports to the United States. You may add that although the
possible concessions to Venezuela, on the basis of these tentative
studies would thus cover about 89 percent of Venezuela’s direct export
trade with the United States, these studies indicate on the other side
that the tentative requests to be made by the United States for tariff
reductions on the part of Venezuela would affect about 29 percent of
American exports to Venezuela, that requests for binding of present
tariff treatment would cover about 12 percent of United States exports,
and that together these requests would amount to only about 41 percent
or 42 percent of the total United States exports to Venezuela.
Very truly yours,
For the Secretary of State:
Francis
B. Sayre
[Enclosure]
Draft of a Memorandum To Be Presented to the
Venezuelan Minister for Foreign Affairs
The American Legation, on instruction of its Government, refers to a
conversation between His Excellency the Minister for Foreign
[Page 772]
Affairs and the American
Minister on May 20, 1937,14 with respect to
possible negotiations for a trade agreement between the United
States and the United States of Venezuela. In the course of this
conversation His Excellency the Minister for Foreign Affairs
expressed the hesitation of his Government in accepting the
unconditional most-favored-nation principle as applied to foreign
exchange, and indicated doubt as to the value to his country of
concessions which the United States might be able to grant in
exchange for tariff concessions by the United States of
Venezuela.
In view of previous representations made by the Venezuelan Government
over a period of many months indicating that it was desirous of
negotiating with the United States a reciprocal trade agreement of
the kind which the United States had concluded in recent months with
a number of other countries, the Government of the United States has
been somewhat perplexed in being informed of what appears to be a
change in attitude of the Venezuelan Government in the matter. In
this connection the Government of the United States recalls that it
had been pleased to learn that on January 12, 1937, His Excellency
the Minister for Foreign Affairs informed the American Chargé
d’Affaires ad interim that he had examined the texts of various
trade agreements recently concluded by the United States and was of
the opinion that the general provisions thereof formed a
satisfactory basis for a trade agreement with Venezuela. It was with
satisfaction also that the Government of the United States had been
informed that His Excellency the Minister for Foreign Affairs had in
previous discussions indicated the willingness of his Government to
subscribe to the unconditional most-favored-nation principle in a
trade agreement with the United States. With respect to foreign
exchange, assurances given in any trade agreement in regard to the
unconditional most-favored-nation principle as applied to import
tariffs would, of course, have little significance unless assurances
could also be obtained with respect to foreign exchange, for
obviously discrimination in the matter of exchange could render
meaningless assurances of most-favored-nation treatment in tariff
matters.
The Government of the United States assumes that if the Government of
Venezuela should desire to proceed with the negotiations for a trade
agreement, one of the primary objectives of both Governments would
necessarily be to give the fullest practicable application to the
most-favored-nation principle as applied to the treatment to be
accorded by each country to the commerce of the other. It is not
considered essential before initiating negotations to reach an
agreement on precise texts for the general provisions, as it is felt
that the provisions for carrying into effect the objective
aforementioned are
[Page 773]
capable
of sufficient variation to permit a mutually satisfactory agreement
being attained without serious difficulty.
As the Venezuelan Government is aware, the United States, through its
trade agreement program, has been endeavoring to contribute its
share to the restoration of world commerce by reducing trade
restrictions and by furthering the principle of equality of trade
opportunity. Sixteen of these reciprocal trade agreements have
already been concluded in the last three years, and the Government
of the United States is now negotiating and exploring the
possibilities of concluding additional agreements. It is recalled
with deep appreciation and gratification that this program has had
the support of His Excellency, Doctor Gil Borges, who has on several
occasions expressed himself in favor of liberal trade policies. In
view of the cordial commercial relations existing between the United
States of America and the United States of Venezuela, and in view
also of the endorsement given by the Venezuelan Government to the
principle of equality of treatment of international trade at both
the Montevideo conference in 193315 and the recent conference at Buenos Aires,16
the Government of the United States has felt hopeful that the
Venezuelan Government would cooperate with it in the pursuance of
this liberal trade program. This hope has been strengthened by the
representations made from time to time showing the desire of the
Venezuelan Government to negotiate with the United States a trade
agreement of the character mentioned.
The Government of the United States would deeply appreciate being
informed whether it is now the wish of the Venezuelan Government to
continue the conversations looking towards an agreement on the broad
basis of equality of treatment of the kind which this Government has
negotiated with various countries in the recent past and is now
negotiating with other countries.
