611.3531/619
The Department of State to the Argentine Embassy 17
Memorandum
The Government of the United States has given careful consideration to a proposal, which was evolved in informal conversations between representatives of the Governments of the United States and Argentina, with respect to the allocation of official exchange to products of the United States under a possible trade agreement. The Government of the United States understands this proposal to be as follows: The Government of Argentina would undertake, under a trade agreement, to make available sufficient official exchange to pay for the importation, in any calendar year, of all imports of products from the United States contained in a list to be established. Furthermore, [Page 288] the Argentine Government would undertake to allocate to additional products of the United States any official exchange, over the amount needed for imports of the listed products, that might become available from any source, such exchange to be allocated particularly for imports of those products with respect to which the difference in the rate of exchange constituted an important consideration. A joint committee could bring to the attention of the Argentine Government instances in which a difference in the rate of exchange seriously handicapped imports from the United States as compared with like imports from other countries.
While the Government of the United States recognizes and appreciates the spirit underlying the foregoing proposal, the conclusion has been reached that it would not be possible to accept it. An important objection to the proposal in question is that it does not make adequate provision for products of the United States which are not included in the proposed list. Under this proposal it might well happen that a large proportion of the number of products imported into Argentina from the United States would receive no official exchange whatever, while products included in the list would receive complete official exchange coverage. In other words, the difference in treatment which would be accorded products included in the list as compared with products not included therein is so great that United States exporters of products in the latter category would feel that they had serious cause for complaint.
In view of the importance which the Government of the United States attaches to the negotiation of a mutually profitable trade agreement between the two countries, various alternative solutions of the problem have been considered with a view to finding one which will meet to the fullest possible extent the requirements of both countries. A formula which may offer a possible solution and which the Government of the United States desires to present to the Government of Argentina for consideration is as follows:
This proposal is that the trade agreement embody provisions whereby Argentina would undertake to make available for imports of merchandise from the United States a proportion of the total official exchange available in any calendar year for merchandise imports into Argentina from all sources, which shall not be less than the proportion of Argentina’s total merchandise imports supplied by the United States in a previous representative period. The attached draft of provisions for possible inclusion in the trade agreement will indicate more clearly the nature of this proposal.
If the Argentine Government thinks a solution might be reached following this line, the Government of the United States will be glad immediately to discuss the question of what shall be deemed to constitute [Page 289] the representative period on which the proportion of the available official exchange to be allotted to imports from the United States would depend. This base period would be defined in the agreement. Also certain questions pertaining to the practical application of this plan, particularly the question of the proper method of distributing the exchange allotted to the United States among the various products of the United States will require consideration.
It should be noted that the proposal above presented for consideration has the advantage from the standpoint of the Argentine Government of being less rigid than the formula contained in the first mentioned proposal. It is assumed that the products to be included in the list contemplated by the latter proposal would comprise a substantial portion of United States exports to Argentina. Therefore, whereas that proposal would assure official exchange for all listed products of the United States regardless of the amount of such exchange required therefor and irrespective of the total amount of official exchange that might be available to the Argentine Government, the proportional principle suggested by the United States maintains a fixed ratio between the total amount of the official exchange which might be available in any calendar year for merchandise imports from all sources and the amount allocated to merchandise imports from the United States. In other words, requirements of official exchange for imports from the United States would be automatically adjusted to the total amount of official exchange which Argentina has available.
- Handed to the Argentine Ambassador, March 25.↩