611.3131/186

The Chargé in Venezuela (Braddock) to the Secretary of State

No. 988

Sir: I have the honor to refer to my telegram no. 34 of April 20, 4 p.m.,16 and to forward herewith a draft, with English translation, of a note from the Minister of Foreign Affairs, proposing the establishment of a modus vivendi to provide for most-favored-nation treatment between the United States and Venezuela pending completion of the trade agreement.

[Page 972]

In handing me this draft, Dr. Gil Borges explained that his only motive in making the proposal was to regularize trade relations between the two countries during the trade agreement discussions, so that the Venezuelan Government might properly grant to American products the benefits which it was extending to imports from other countries. He stated that this Government could not well extend most-favored-nation treatment to the United States in practice unless there existed some kind of written agreement between the two countries which would provide for such treatment. The agreement could take the form of a mere exchange of notes which would not require the approval of the Venezuelan Congress. The Foreign Minister indicated that any change in the text of the proposed modus vivendi which the Department thought desirable could undoubtedly be made.

As on a previous occasion, I communicated to the Foreign Minister the Department’s point of view concerning the modus vivendi as stated in its instruction no. 258 of April 5, 1938. Dr. Gil Borges assured me the establishment of the modus vivendi would not complicate or delay the negotiations on the trade agreement insofar as Venezuela was concerned, and he stated that he would make every effort to expedite the negotiations as much as possible.

With respect to my note of March 12, transmitting the memorandum which accompanied the Department’s instruction no. 250 of March 7,17 the Foreign Minister informed me that his reply to the text of the note had been ready for some time but that the Minister of Hacienda had not quite completed his study of the Department’s break-down of the Venezuelan list. Dr. Gil Borges mentioned that it was a primary part of his Government’s economic plan of development to make Venezuela as self sustaining as possible with respect to its demand for food-stuffs, and that, in accordance with this policy, the Venezuelan Government would probably have to restrict very much any concessions it might be asked to make on imports of American food-stuffs.

Respectfully yours,

Daniel M. Braddock
[Enclosure—Translation]

Draft Note From the Venezuelan Minister for Foreign Affairs (Gil Borges)

For the purpose of formalizing the result of the conversations which I have had with Your Excellency, I have the honor to inform you that the Government of Venezuela is disposed, pending the conclusion of the reciprocal trade treaty which the two governments have under consideration, to regulate the commercial relations between the two countries by a modus vivendi on the basis of the application of the [Page 973] most-favored-nation clause, in conformity with the following articles:

Article I. The products of the soil or of industry originating in and proceeding from the United States of America shall enjoy, on their importation into Venezuela, in all that relates to customs duties, accessory charges, methods of collecting the said duties, as well as rules, formalities and charges to which the operations of custom house dispatch may be subject, the same benefits, privileges and immunities which may be granted to similar products of the soil or of industry originating in and proceeding from any other country.

Article II. The most-favored-nation treatment provided for in the foregoing article shall not apply:

1.
To the advantages now accorded or which may hereafter be accorded by the United States of Venezuela or by the United States of America to adjacent countries in order to facilitate frontier traffic. Neither shall it apply to advantages resulting from customs unions to which the United States of America or the United States of Venezuela may become a party.
2.
To the advantages now accorded or which may hereafter be accorded by the United States of America, its territories or possessions or the Panama Canal Zone or the Republic of Cuba to one another. The provisions of this paragraph shall continue to apply in respect of any advantages now or hereafter accorded by the United States of America, its territories or possessions or the Panama Canal Zone to one another, irrespective of any change in the political status of any territory or possession of the United States of America.

Article III. The products of the soil or of industry of one of the Contracting Parties, after being imported into the territory of the other Contracting Party, may not be encumbered with taxes, contributions or tributes greater than those levied or which may be levied on similar foreign products or articles.

Article IV. In the event there is now or may in future be established, for reasons of an economic nature, some form of quantitative restriction or control on the importation or sale of any article in which the other country may be interested, or, upon the importation or sale of a certain amount of any article, the importations originating in and proceeding from the territory of the other Contracting Party shall be granted a treatment both just and as favorable as possible to the products affected, taking into account the statistics of normal interchange between the two countries and the total amount of the quotas to be fixed for each product.

Article V. The provisions of the present Agreement shall not apply to the Philippine Islands, the Virgin Islands, American Samoa, the Island of Guam, or to the Panama Canal Zone.

The products of the soil or of industry which originate in and are exported directly from Venezuela to Puerto Rico and from Puerto [Page 974] Rico to Venezuela are subject to the provisions of the present Agreement.

Article VI. This modus vivendi shall remain in force for the period of one year counting from its date, but each of the Contracting Parties reserves the right to terminate it, and in the latter case its effects shall cease ninety days following the notice of termination in writing.

Article VII. A report of this modus vivendi shall be submitted to the National Congress during its next sessions, in conformity with the provisions of Article 17 of the Tariff and Customs Law of Venezuela.

  1. Not printed.
  2. Ante, p. 961.