Foreign Relations of the United States Diplomatic Papers, 1938, The American Republics, Volume V

611.3331/140: Telegram

The Secretary of State to the Minister in Uruguay ( Dawson )

Washington , March 4, 1938—4 p.m.

8. Your 19, February 25, 7 p.m.¹² The Department has informally given assurances to Richling that in the event the United States should initiate trade agreement negotiations with Argentina, negotiations would also be initiated with Uruguay if that Government should so desire and if a satisfactory basis for negotiations were agreed upon. Since the prospect of early negotiations with Argentina is now somewhat uncertain, this uncertainty naturally affects the possibility of initiating negotiations with Uruguay. It has always been understood that the most satisfactory procedure would be for the United States to negotiate simultaneously with both Argentina and Uruguay. In the event that it should be found possible to announce negotiations with Argentina, you will be promptly informed by telegraph so that further consideration may be given to the possibility of negotiations with Uruguay.

Notwithstanding the foregoing, the Department would be glad to explore the possibilities of separate negotiations with Uruguay, even in the absence of any concurrent negotiations with Argentina, provided a mutually satisfactory basis for such negotiations were agreed upon between the two Governments. Under present conditions the most important point to be determined in advance would be the application of the principle of unconditional most-favored-nation treatment to all forms of trade and payments control. As is well known, the present trade and exchange policies of the Government of Uruguay are contrary to the broad principles approved at both the Montevideo¹⁴ and Buenos Aires Conferences,¹⁵ and have discriminatory and injurious effects in their application to American trade with Uruguay. A mutually satisfactory solution to this problem must be agreed upon before it will be possible, in any event, to initiate trade agreement negotiations.

The Department fully understands that reaching a satisfactory agreement on this point might well involve a revision of Uruguayan commercial policy. The advantages of triangular or multilateral trade would have to be recognized, as contrasted with the present Uruguayan system which tends to restrict trade to a bilateral balancing between individual countries.

It is doubtful whether actual negotiations could be undertaken before late in 1938, or early in 1939, even if discriminations were removed by Uruguay and an acceptable basis for negotiations were developed before that time. It seems highly unlikely that these conditions could be fulfilled in the time indicated. In your discretion, you may advise the Uruguayan officials of the foregoing.

In connection with this subject the Department would be interested in receiving further reports from you along the line indicated in the last sentence of the Department’s instruction no. 142 of May 12, 1937.¹⁶

Hull

12. Post, p. 941.
14. Resolution V, Economic, Commercial, and Tariff Policy, Report of the Delegates of the United States of America to the Seventh International Conference of American States, Montevideo, Uruguay, December 8–26, 1933 (Washington, Government Printing Office, 1934), p. 196.
15. Resolution XLIV, Equality of Treatment in International Trade, Report of the Delegation of the United States of America to the Inter-American Conference for the Maintenance of Peace, Buenos Aires, Argentina, December 1–23, 1936 (Washington, Government Printing Office, 1937), p. 240.
16. Not found in Department files.