611.2331/113
The Chargé in Peru (Dreyfus) to the Secretary of State
[Received October 4.]
Sir: Referring to the Department’s instruction No. 164 of September 7, 1938 and the Embassy’s despatch No. 654 of September 17, 1938, concerning the possible trade agreement negotiations with Peru, I have the honor to report that, at the regular weekly audience with the Foreign Minister, after a few minutes of general conversation, much to my surprise Dr. Concha brought up the subject of the trade agreement with the United States showing that the Peruvian Government is interested in getting the negotiations under way.
Dr. Concha informed me that he was about to appoint a sub-committee to be selected from the Economic Advisory Committee of the Ministry of Finance to undertake the study of the trade agreement. He mentioned as possible appointees to this committee:
- Felix Remy, a graduate of Cornell University; mining engineer employed by the Fernandini mining enterprises;
- M. A. Olaechea, former President of the Central Reserve Bank of Peru; attorney of the National City Bank, and other American companies;
- Clemente Althaus, Manager of the Central Reserve Bank;
- Carlos Garcia Gastañeta, lawyer; one of the directors of W. R. Grace & Company of Lima; Peruvian delegate to the VIII Pan-American Conference;
- Jorge Chamot, former superintendent of customs; now Manager of the Lima Chamber of Commerce and Government Post Office Representative; delegate to the London Sugar Conference in 1926;
- José F. Alemnara, Manager of the A. L. Bayly & Co. Soap Factory; connected with the National Industrial Society; and, possibly, the Minister of Finance himself.
Besides giving me the above information Dr. Concha went further and said he expected to be able to give me in the near future the reply to the request in the Embassy’s note No. 219 of September 15, 193821 for a statement of the exceptions the Peruvian Government desires to make with regard to the most-favored-nation principle in the case of trade with contiguous countries.
The action of the Foreign Minister in volunteering this information and the rapidity with which the Foreign Office is acting upon the Embassy’s requests lately has left me somewhat confounded. There is no doubt of a growing friendliness in Peru for the United States, which is exhibited in just such ways.
September 27th (evening).
Being with the Foreign Minister again this evening to deliver to him the message expressing appreciation for the cooperation of Peru in the European situation, contained in the Department’s circular telegram of September 26th [27], 3 p.m.,22 and fearing lest the appointment of this committee might be given publicity, I took advantage of the opportunity to call to his attention that part of the Embassy’s note No. 219 of September 17 [15] 1938, referring to the confidential nature of the negotiations at this stage and the statement that “it probably would not be possible for my Government to make any announcement of intention to negotiate a trade agreement with Your Excellency’s Government earlier than the beginning of November of this year.”
Dr. Concha said I could rest assured on this point, as it had not been his intention to issue any public notice of the naming of the Committee. He added that the Foreign Office had insufficient personnel to study commercial treaties, and therefore each time one was under consideration it was necessary to appoint a sub-committee of the Advisory Economic Committee of the Ministry of Finance, as was done at the time of the British Commercial Treaty. He repeated his assurance that there was nothing to fear as to the guarding of the confidential nature of the discussions, for the committees were accustomed to dealing with confidential questions.
[Page 855]Adverting, then, to the matter of exceptions to the most-favored-nation clause, I called the Minister’s attention to the sentence of the note, stating our reluctance to agree to such exceptions unless they were “generally recognized and of long standing.” There was some discussion of this point. The Minister, under the impression that we would wish to limit the exceptions to Chile, remarked that the treaty with Bolivia dated from 1904 [1905];23 but said that he did not know whether or not they would wish exceptions for Bolivia as well as for Chile, since that would depend on the studies and recommendations of the Committee he would appoint.
The Minister further remarked that Peru’s balance of trade with Bolivia was highly favorable to Peru, which would consequently have to try to take more from Bolivia; but that Bolivia could send Peru nothing would [that?] would compete with American trade. On the other hand, he said, Chilean economy was more competitive with that of the United States, since industrialization was well advanced there. He hoped there would be no difficulty over these two countries, since the Ambassador had told him that he felt sure there would be no insuperable objection to special exceptions in favor of “contiguous countries”.
I told the Minister that we believed in the unconditional most-favored-nation principle in its widest application and would want the exceptions thereto, to which we might agree, to be limited to the smallest possible field; and that it was this desire which led us to suggest a delimitation of these exceptions as clearly as possible before any announcement were made.
As I mentioned above, I have been more than surprised at the speed with which the situation is developing.
Respectfully yours,
- See draft of note to be presented to the Peruvian Minister for Foreign Affairs, p. 848.↩
- Vol. i, p. 677; see also Department of State, Press Releases, October 1, 1938, p. 223.↩
- November 27, 1905, British and Foreign State Papers, vol. c, p. 805.↩