611.3131/171
The Minister in Venezuela (Nicholson) to the Secretary of
State
No. 910
Caracas, January 18, 1938.
[Received January
27.]
Sir: I have the honor to refer to my cablegram
no. 4 of January 18, 8 a.m.,2 submitting additions to the list of Venezuelan
products to be considered under Article I of the projected Reciprocal
Commercial Agreement between the United States and Venezuela. A copy of
the Venezuelan list with translation is submitted to the Department
herewith.2
In reply to a memorandum from this Legation, the Venezuelan Foreign
Office transmitted with the list of Venezuelan products, a memorandum
outlining the conditions under which the Minister of Hacienda has been
authorized to include petroleum and its derivatives in the Venezuelan
list of products to be discussed during the negotiations. Copies of
these memoranda are also enclosed.
The American producers of petroleum in Venezuela have made persistent
representations to the Foreign Office in an effort to persuade the
Venezuelan Government to include petroleum and its derivatives on the
list. It will be noted that petroleum has been included for discussion
in bargaining only under certain conditions. Dr. Gil Borges, the
Minister of Foreign Affairs, stated to me that every effort is being
brought to bear by the Venezuelan Government upon the petroleum
companies to persuade them to establish refineries in Venezuela. He also
stated that it was the opinion of government officials that Venezuela
should receive a portion of the benefits that have tended to increase to
such a large extent the prosperity of the islands of Aruba and Curacao
through the refining of Venezuelan petroleum.
Respectfully yours,
[Page 957]
[Enclosure 1]
The American Legation
to the Venezuelan Ministry of
Hacienda
Memorandum
- 1.
- The Government of the United States of America does not
approach the question of granting or requesting duty concessions
on the basis of a narrow balancing of volume of trade involved
in concessions granted and concessions obtained.
- 2.
- The policy of the Government of the United States in
negotiating trade agreements is to obtain the reduction or
amelioration of restrictive barriers to international trade and
thereby expand trade along natural lines. In considering
possible trade agreement concessions it has in general followed
the rule of principal supplier. In selecting the products
included in its tentative list for submission to the Venezuelan
Government the United States Government was largely guided by
its position in regard to such products in the Venezuelan
market. It is to be expected that the Venezuelan Government will
include in its list, now being prepared, those products of which
Venezuela is a principal supplier in the United States market
and with respect to which it desires to maintain or increase its
position in that market.
- 3.
- Crude petroleum and fuel oil are among the principal exports
of Venezuela to the United States and consequently it would seem
desirable that these products be included in the preliminary
lists. Such procedure would enable the Government of the United
States to make a public announcement of all articles with
respect to which concessions might be considered and thereby
obviate any unnecessary delays should the question of crude
petroleum and fuel oil be raised at a later date.
Caracas, December 20,
1937.
[Enclosure 2—Translation]
The Venezuelan Minister for Foreign Affairs
(Gil
Borges) to the American
Minister (Nicholson)
Memorandum
Memorandum of the Minister of Foreign Affairs for His Excellency the
Minister of the United States, with respect to the inclusion of
petroleum exported directly from country to country in the
reciprocal trade treaty which it is intended to conclude.
The Ministry of Hacienda has been authorized to include petroleum and
its derivatives in the list of Venezuelan products of the soil or of
industry of Article I of the projected Reciprocal Trade Treaty
between
[Page 958]
Venezuela and the
United States, under the following conditions and reservations:
- 1.
- Only those petroleums and their derivatives shall be
understood to be included in the list and subject to the
terms of the treaty which are exported directly from
Venezuela to the United States.
- 2.
- Those petroleums and their derivatives which leave
Venezuela for Curacao, Aruba or any territory other than
that of the United States, and which cannot, in consequence,
be considered as a direct export from country to country,
shall not be included under the terms of the treaty.
- 3.
- Petroleum and its derivatives shipped from Venezuela shall
not be considered to be included in the trade balance
between the two countries for the purposes of demanding
advantages or favors from Venezuela equivalent to advantages
or favors which may be granted in the United States to the
importation and consumption of the said petroleum.
Therefore, Venezuela shall not be obliged to grant tariff
reductions nor any other favor or advantage to the
importation of American products in return for favors,
reductions or advantages granted in the United States to the
importation and consumption of petroleum and its
derivatives.
- 4.
- As every favor or advantage granted to the importation and
consumption in the United States to petroleums exported
directly from Venezuela shall be an added gain for the
petroleum companies, the inclusion of this product in the
treaty, is subordinated to the condition that the petroleum
companies which exploit the product agree with the
Government of Venezuela in refining 50% of the petroleum
exported in this country. This proportion may be reached
gradually within the period and in accordance with such
conditions as may be stipulated between the National
Government and the Companies.
Caracas, January 17,
1938.
