611.2531/258
The Chargé in Chile (Frost) to the Secretary of State
[Received February 9.]
Sir: I have the honor to acknowledge the receipt of the Department’s telegraphic instruction No. 12, dated January 29, 1938, with regard to the applicability of the “standard” general provisions for a prospective trade agreement between Chile and the United States.
In the absence of Don Desiderio Garcia this matter has been discussed with Don Guillermo Gazitúa, and the latter cordially concurs in the view that preliminary discussions can best be conducted orally instead of being based on any provisional text. Accordingly the Embassy will not discuss the text of the general provisions with the Foreign Office here, but will confine its conversations to a tentative examination [Page 437] of the various points which would be covered by the trade agreement.
The Foreign Office has already made substantial progress in studying copies of the trade agreements already in existence between the United States and other countries; and I inferred from a remark dropped by Señor Gazitúa that there will be some tendency to distrust any clauses which have not already been included in one or more of these prior agreements. I do not anticipate that this feeling will present serious obstacles in the case of clauses manifestly reasonable.
The Foreign Office, also, has undertaken an investigation of the various Chilean commodities whose sale to the United States could be considerably improved by tariff concessions on our part. It is feared that decreases in our tariff rates on Chilean products would in many instances fail to stimulate exportation because they would be generalized indiscriminately to countries which compete with Chile. I have pointed out that while Chile’s relative position in the American market might not be modified, in such instances, her positive quantities of sales might be augmented. Unless the Chilean officials can reasonably hope to benefit their export trade materially by a trade agreement our negotiations with respect to equality of treatment on exchange may be affected.
Respectfully,