611.3531/1015: Telegram

The Ambassador in Argentina ( Armour ) to the Secretary of State

174. Reference article number 16 of the proposed general provisions of the trade agreement with Argentina. The Argentine subcommittee requests the addition of an exception reading in translation as follows:

“The favors which the Argentine Republic may have granted or may in the future grant to adjacent countries.”

The Argentine officials explained that the addition of this exception was intended to balance our requirement for exceptions in the case of Cuba and the Panama Canal Zone. Although special relationship of the United States to Cuba and the status of the Canal Zone were fully explained, it was contended that if Argentina should sign a trade agreement recognizing our right to grant preferential treatment to third country without obtaining a similar concession in exchange, a dangerous precedent would be established. In addition it was said that Argentina wished to have it recognized that it had special relations with adjacent countries. It was added that Finland, in exchange for Argentine recognition of Finland’s right to grant preferential treatment to Estonia, agreed not to claim any concession Argentina might grant to any Latin American country. However, Argentina signed a trade agreement with Denmark last April recognizing without compensation Denmark’s special relations with Iceland.

It is believed that the Argentine authorities may have in mind that the right to grant adjacent countries special treatment might be used to preserve the market for Argentine wheat in Brazil. See page 2 of the Consulate General’s memorandum of August 29 enclosed with the Embassy’s despatch 98 of September 1, 1939.29

Instructions in the premises by telegraph would be appreciated.

Armour
  1. Not printed.