[Enclosure]
Memorandum of Conversation, by the Third
Secretary of Embassy in Peru (Cochran)
Lima, September 16, 1938.
|
Between: Dr. Carlos Concha, Minister
of Foreign Affairs, Mr. Dreyfus, Mr. Cochran. |
Dr. Concha read the note relative to the trade agreement which Mr.
Dreyfus handed him, and said that, not having heard anything from us
on this matter recently, he had assumed that we wanted to leave it
until after the Pan American Conference;19
but that the present was a propitious time to undertake
negotiations, since the balance of trade was highly unfavorable to
Peru, and the United States therefore would have to make greater
concessions than Peru.
Mr. Dreyfus pointed out that the first step was to clarify the
exception to the most-favored-nation clause. Dr. Concha, in his
discussion of this point, mentioned only Chile; no other “contiguous
country”. He said that a Peruvian Commission was now in Santiago,
negotiating a new commercial treaty; that Peru could not ratify a
new treaty, as it had no Congress; and that the negotiators would
probably simply continue the major portions of the old treaty in
effect.
Mr. Dreyfus remarked that it was fortunate that the two matters (the
treaty with Chile and the trade agreement with the United States)
had come up simultaneously, since they could now be studied as a
unit. Dr. Concha agreed.
Dr. Concha went on to say that Chile was putting a great deal of
pressure on Peru; that she bought 120,000 tons of Peruvian sugar
each year (against 50,000 by the United States) and that she had
suggested some kind of clearing or compensation arrangement, Peru to
buy from Chile one-seventh as much as she sold. Peru had rejected
any such plan; but could not fail to take those 120,000 tons of
sugar into consideration, since if Chile stopped buying them, it
would mean a commercial and possibly a social crisis in Peru.
Dr. Concha declared that he personally favored Secretary Hull’s
policy of reciprocal treaties as against the system of special
privileges, and that he would like to make the trade agreement with
the United States the “axis” of Peru’s entire commercial policy;
that if Peru could be sure of being able to place 200,000 tons, or
even 100,000 tons, of sugar in the United States each year, she
would be relieved of her dependence on the Chilean market, and hence
of the necessity of granting special concessions as exceptions to
the most-favored-nation clause. He said that such an arrangement
with the United States would
[Page 853]
“emancipate” Peru. On the other hand, if no such provision could
be made for the disposal of Peru’s sugar, Peru would have to grant
special favors to Chile to protect that outlet.
Mr. Dreyfus said that he felt sure the United States wanted to do
everything it possibly could in this connection, but that the
problem of sugar quotas was a very complicated one, that the
solution hinged on the Sugar Law,20 as the
Minister knew, and that he wasn’t sure just how much could be
done.
Dr. Concha said that there were certain concessions in the Chilean
commercial treaty which Peru simply could not generalize, mentioning
especially the free entry of wheat and coal. In concluding, he said
that he would study the note and the draft general provisions; as
well as the question of the nature and extent of the exceptions to
the most-favored-nation clause which Peru will wish to request.
W[illiam] P. C[ochran, Jr.]
