611.3131/179
The Secretary of State to the Minister in Venezuela (Nicholson)
Sir: Reference is made to your telegram No. 22, March 23, 5 p.m., in regard to a possible modus vivendi between the United States and Venezuela. You should inform the Venezuelan Foreign Minister that while the Department will, of course, be happy to consider any suggestion he may wish to make regarding a modus vivendi assuring unconditional most-favored-nation treatment between the two countries pending conclusion of the trade-agreement negotiations, it believes that it is preferable to bend all efforts to the most expeditious conclusion of the trade agreement. To that end, as stated in the Department’s telegram No. 13 of March 9, 1938, the Department is prepared to set a date at once for the issuance of this Government’s second public announcement, if the Venezuelan Government acquiesces in the publication, in connection with that announcement, of the products comprising group 1 in the memorandum accompanying the Department’s instruction No. 250 sent you on March 7. Furthermore, the Department is prepared to proceed as rapidly as possible thereafter with the negotiation of the trade agreement, and hopes that the agreement may be concluded at an early date after the completion of public hearings in this country which would be about five weeks after the second public announcement. During the period between the issuance of the [Page 971] second announcement and the conclusion of public hearings in this country, discussions could proceed between the two Governments with respect to the general provisions of the trade agreement, and, with respect to products, keeping in mind, however, that this Government’s position in regard to the latter because of legal requirements must be subject to information and data received from domestic interests as a result of the second public announcement and hearings.
You should also inform the Foreign Minister that this Government had assumed that in practice the Venezuelan Government has extended most-favored-nation treatment to products imported into Venezuela from the United States; and that this Government hopes that, pending the conclusion of the trade agreement, the Venezuelan Government will find it possible to extend such treatment in practice to such American products as may be imported into Venezuela.
In this connection, you should again point out to the Foreign Minister that this country generalizes to Venezuela all concessions granted in trade agreements negotiated under the authority of the Trade Agreements Act, with the single exception of those granted to Cuba which are not generalized to any third country.
For your information, the Department does not consider it advisable to conclude a modus vivendi with Venezuela as it is believed that such action might complicate the trade agreement conversations and would possibly delay the conclusion of a trade agreement.
Please report fully to the Department in what respects Venezuela is not now granting most-favored-nation treatment to the United States.
Also please report fully to the Department any conversations you may have with Venezuelan officials in regard to the foregoing and in regard to the trade-agreement conversations generally, including any comments the Legation may think pertinent.
Very truly yours,