611.3131/108
The Minister in Venezuela (Nicholson) to the Secretary of
State
[Extracts]
No. 743
Caracas, June 15, 1937.
[Received June
19.]
Sir: Referring to my telegram No. 68 of June
14, 7 p.m.,17 I have the
honor to transmit the text, together with a translation thereof,
[Page 774]
of the alternate draft17a of a reciprocal trade
agreement as proposed by the Venezuelan Minister for Foreign Affairs.
There is also transmitted herewith a copy and a translation of an
accompanying memorandum which the Minister handed me at the time of
presenting the draft trade agreement.
As the Department will observe the Foreign Minister’s draft is
considerably shorter than that proposed by the Department, consisting of
thirteen articles instead of the Department’s eighteen. In general,
however, it follows the lines of the Department’s draft and is more
comprehensive as to its provisions than I had been led to expect by the
recent remarks of the Foreign Minister which were reported in my
detailed telegram No. 64 of May 21, 6 p.m. In my opinion, while it does
not meet the Department’s position with respect to certain matters such
as exchange control and unconditional most favored nation treatment, it
affords sufficient basis for further discussions.
. . . . . . . . . . . . . .
Pending the Department’s study of the alternate draft and its
instructions relative thereto, I shall not attempt formally to discuss
the subject with the Venezuelan authorities.
Respectfully yours,
[Enclosure—Translation]
The Venezuelan Ministry for
Foreign Affairs to the American
Embassy
Memorandum
The general structure of the Agreement has not been changed with
respect to the text presented by the Legation of the United States
of America; it has only been adapted to the peculiar circumstances
of Venezuelan economy.
The essential points of view of the United States have been preserved
in the new text of the Ministry for Foreign Affairs.
In general, an effort has been made to substitute, without failing to
provide for, situations such as those involving quantitative
restrictions or controls over exports, etc., with a more simple and
general formula than that which is contained in the draft presented
by the Legation.
Therefore, one of the principal modifications consists in that
Articles VII, VIII and IX are condensed in the text of the Ministry
for Foreign Affairs into Article V.
Article X concerning exchange was suppressed, because in its general
sense it is included in the most favored nation clause, because it
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provides for
situations which would hardly present themselves in Venezuela.
Article XI of the text presented by the Legation contains the most
favored nation clause. In the text of the Ministry for Foreign
Affairs it is contained in Article VI.
In the paragraphs of this article are set forth the exceptions
contained in Article XV of the American text; and moreover, (in No.
3 of paragraph 2), the exception regarding situations created by
Trade Agreements by virtue of which one of the Contracting Parties
obtains from the other State advantages through equivalent
concessions.
Article XI of the Venezuelan text provides that the Agreement shall
not apply to certain possessions and territories under American
control, among which are the Virgin Islands and Puerto Rico. Thereby
the Ministry for Foreign Affairs desires to save that provision of
the Customs Tariff Law, Article 3, by virtue of which articles
proceeding from the Antilles and the Guianas are surcharged an
additional 30%. This provision is untouchable in the general opinion
of Venezuelans, because it constitutes a safeguard for the import
commerce of the country and the preservation of a great part of its
trade with Europe and the United States.
The other modifications are not of substance but of form and
arrangement.
