611.3531/647
The Department of State to the Argentine Embassy
Memorandum
Reference is made to the memorandum of the Argentine Government, dated July 7 [6], containing counter-proposals on the subject of a possible trade agreement between the United States and Argentina.
That memorandum has been carefully studied by the Government of the United States, which is gratified to note that the Argentine Government would be disposed to accept in a trade agreement an exchange formula on the principle proposed by this Government. However, the percentage of total exchange available for imports offered by the Argentine Government for allocation to imports from the United States is far below any percentage, derived in accordance with the aforementioned principle, from the trade figures for any previous representative period.
[Page 300]With respect to the alternative formula set forth in Section TV of the memorandum of the Argentine Government, it may be noted that this Government could not give consideration to any proposal, even were the Argentine Government’s exchange formula acceptable in its present form, which would not provide for assurances of reductions in the Argentine customs duties on some important export products of the United States.
While realizing the desire of the Argentine Government to secure concessions on as wide a range as possible of imports into the United States, it does not at this time appear possible to grant any substantial increase in the tentative concessions listed in the enclosure to this Government’s memorandum of June 13, 1938.
Nevertheless, being animated as is the Government of the Argentine Republic with a desire to conclude a mutually satisfactory and advantageous trade agreement, the Government of the United States has given careful consideration to the possibility of adapting the Argentine counter-proposal in a manner acceptable to both Governments, in order that an agreement may be negotiated within the time limit which this Government has found it necessary to fix.
With this purpose in mind, the Government of the United States desires to submit for the consideration of the Argentine Government the following proposal:
1. With regard to exchange allocations for imports from the United States, there would be included in the agreement the proportional formula to which the two Governments have now agreed. However, instead of using the precise percentage derived from the import figures for 1932–34 (12.86%), the Government of the United States would be willing to accept 12.50%, which is the lowest figure this Government could agree to as approximately representative of the share of the United States in the import trade of Argentina. Moreover, in recognition of the exchange problem confronting the Government of Argentina, the agreement would provide that if in any calendar year beginning in 1939, the Argentine Government found itself unable to make available for imports from the United States 12.50 percent of total exchange allocated for imports, the agreement would terminate automatically on February 1 of the following year.
2. With respect to the concessions which may be granted by the two Governments on commodities, the Government of the United States would expect, in return for concessions to Argentina substantially as indicated in List A annexed to this Government’s memorandum of June 13, (a) reductions, representing an improvement in present customs treatment, in the Argentine customs duties on important products imported from the United States, including: [Page 301]
- (Roughly in order of listing in the Argentine tariff)
- Prunes
- Passenger automobiles (weighing from 1,000 to 1,500 gross kilos, inclusive)
- Automobile parts
- Lumber
- Cash registers, adding, accounting and calculating machines and Parts
- Paints and lacquers
- Apples (on a seasonal basis)
- Automatic refrigerator parts
- Radio parts and tubes
and (b) binding of duties on other products.
It is hoped that the Argentine Government will be able to accept this revised proposal, beyond which this Government feels unable to go. As indicated in this Government’s memorandum of June 13, negotiations for a trade agreement with Argentina and publication of the terms thereof would have to be completed no later than early September, and in order that this may be accomplished, the announcement of trade-agreement negotiations should be made at the earliest possible date, no later than July 13.