Foreign Relations of the United States Diplomatic Papers, 1938, The American Republics, Volume V

611.3531/647

The Argentine Embassy to the Department of State

undated

[Translation]

With reference to the memorandum from the Department of State dated June 13 in which there was transmitted the proposal of the Government of the United States, the Government of the Argentine Republic, animated by the desire to arrive at the concerting of a treaty would be disposed to initiate negotiations on the following bases:

I. Exchange Formula

The Argentine Government would be disposed to accept a formula based on the principle proposed by the United States but on a lower percentage, compatible with the exchange situation.

According to the preliminary calculations made, not more than 6½ percent of the total exchange available for imports could be obligated. But the Argentine Government is disposed to establish that if the amount of our exports to the United States, after deduction of a reasonable annual sum and the transfers to the United States for the payment of the services of the debt, exceeds the amount to be granted in accordance with the foregoing paragraph, all the excess will be applied to the payment for United States imports.

There would have to be first deducted from this excess, the difference which may have been produced in former years, since the initiation of the agreement, between the exchange which the Argentine Government undertakes to grant by the first part of this section (punto) and that which it would have been necessary to grant on the basis of the exports and deductions contemplated in this second paragraph.

II. Customs Advantages For Argentine Products

The Government of the Argentine Republic considers that the proposed schedule A of reductions and consolidations of the customs regime in force for Argentine products which would serve as a basis for the negotiations, would have to be modified in the way indicated in annex I.

III. Customs Reductions For United States Products

The acceptance on the part of the United States of the modifications indicated in the foregoing section would permit the Argentine Government to consider to a limited extent, the granting of some of the reductions and consolidations of duties for the United States products which are requested in schedule B.

IV. Alternative in Case the United States Does Not Accept Negotiations on the Basis of Section II

If the United States should not be able to accede to the amplification and modification of schedule A as indicated in Section II, the Argentine Government would be disposed to initiate negotiations on the following bases:

Customs advantages for the Argentine products offered in the said schedule, the exchange formula indicated in Section I, and abandonment on the part of the Government of the United States of any request for customs reductions on United States products.

ANNEX I

Reduction of 50 percent in the customs duties on the following products:

[Here follows list of items in United States tariff schedules; items desired to be retained on free list, and certain other concessions desired.]

The Argentine Government reserves to itself the right to include, in the course of the negotiations, some products additional to the schedule presented, which might be of real importance in its exports to the United States.

(1) In all cases there shall be fixed in the treaty the resulting lower duty so that it may remain consolidated thus.

(2) There shall not be imposed on the products considered in the treaty, internal duties implying a prolongation of the customs duty or the indirect establishment of an import duty.

(3) Likewise, there shall not be carried out laws, decrees, or regulations which under pretext of sanitary purposes or those of policing, administration, et cetera, would modify the treatment consolidated in the treaty.

Washington , July 6, 1938.