611.3531/653
The Argentine Embassy to the Department of State
The Argentine Government, in receiving the Memorandum of the Government of the United States, has noted with pleasure the spirit of comprehension of the effort which we have made to accept as a basis for negotiation the exchange formula proposed by the Department of State.
This formula is an integral part of the proposal made and its acceptance cannot be considered separately, inasmuch as it is dependent upon the other basic conditions laid down in the Argentine counter proposal.
The Department of State proposes to reduce from 12.86 percent to 12.50 percent the proportion of exchange to be authorized for the importation of United States products. The Argentine Government insists upon the limit of 6.50 percent, calling attention to the fact that the 6.50 percent suggested in the counter proposal of July 7 represents a minimum base that could be increased to 12.50 percent or even more if the future exchange situation would so permit.
The recognition by the Government of the United States of the exchange situation faced by the Argentine Government, in facilitating the discussion of this point, permits strong hope to be cherished that the Department of State assigns the proper value to the counter proposal of the Argentine Government of July 7 [6], which constitutes an exception within the regime of the agreements signed up to the present time and that that counter proposal will come to be considered as a satisfactory solution of the problem raised.
The Argentine Government has considered in its last proposal that it was necessary to expand List A of the concessions for Argentine products with the object of removing any possibility that within a short period the agreement reached after so many years of labor and expectation, might expire by reason of the lack of exchange for its fulfillment.
Only through such expansion would the expectations of both parties be satisfied, because only in this event could reductions of a limited character be granted for some United States products. If that expansion [Page 303] is not possible, such reductions would have to be rejected in their entirety.
The Argentine Government has learned with great satisfaction through its Ambassador in Washington that the Department of State would be disposed to continue discussions regarding the terms of the agreement with the object of making the preliminary announcement as soon as circumstances would permit an accord to be reached on the fundamental points and (the Argentine Government) gives due appreciation to the possibility that for reasons of the moment the Government of the United States could not see its way clear to accept the Argentine proposal at this time. With respect to this, it hopes that a more detailed analysis of the counter proposal of July 7 by the competent authorities of the United States, will permit conversations to continue on the basis therein indicated and that they will constitute a position from which (the two Governments) would only be separated by a matter of details.