611.2331/87

The Ambassador in Peru ( Steinhardt ) to the Secretary of State

No. 211

Sir: I have the honor to refer to my confidential despatch No. 195 of January 8, 1938, and to report that I have had a further conference [Page 839] with Dr. Concha regarding the possibility of a reciprocal trade agreement with Peru. Dr. Concha stated that his study of all of Peru’s existing trade agreements was continuing and that he hoped to be able to discuss the subject further with me in about a week.

Dr. Concha intimated that notwithstanding Peru’s previous policy against entering into trade agreements incorporating the unconditional most favored nation principle, he might be prepared to give the informal assurance required by the Department as a preliminary to opening negotiations, provided he was permitted to make a reservation with respect to Chile pending a more intensive and detailed study of the effect upon Peru, under the treaty with Chile, of an agreement with the United States based upon the unconditional most favored nation principle. He added that he was also considering a temporary reservation arising out of the treaty with Great Britain, but after a brief discussion concerning the provisions of this treaty, concluded by saying that although it had been urged upon him by some of his associates, he was by no means convinced that any reservations need or should be made in respect of the treaty with Great Britain on the grounds that he, personally, was opposed to Great Britain having any concessions in the Peruvian market which were not accorded to the United States.

It is my guess, therefore, that when Dr. Concha gives me his reply to the requested informal assurance, it will include a reservation only in respect of the trade agreement with Chile. Should this prove to be the case, I take the liberty of recommending,—if consistent with the Department’s policies,—that his informal assurance of a willingness to negotiate on the unconditional most favored nation principle, subject only to such specific reservations as he may find it necessary to make arising out of the trade agreement with Chile, be accepted as the basis for opening negotiations. I make this suggestion because I am reasonably satisfied that in the course of the negotiations Dr. Concha will abandon any reservation arising out of the trade agreement with Chile that he does not find absolutely essential and which the Department might consider entirely reasonable.

My object in endeavoring at this time to anticipate Dr. Concha’s reply is to obtain the necessary instructions from the Department so as to be in a position to answer him immediately, should my guess as to his probable position prove to be correct so that no time need be lost in transmitting Dr. Concha’s final reply to the Department.

Respectfully yours,

Laurence A. Steinhardt