611.3531/1015: Telegram

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

171. Your 174, September 20, 6 p.m. The suggested additional clause would seriously undermine the most-favored-nation principle as applied to trade between the American Republics. It is to the long-run interest of Argentina as well as to the United States to strengthen rather than weaken this principle not only in this hemisphere but throughout the world.

Approaching the subject from this broad viewpoint, you should reiterate as coming from the Department (1) that in the case of the Panama Canal Zone our exception has no commercial significance and that despite the relationship of the zone to the United States such negligible imports as there are from that source are charged with the duties which apply to like products imported from foreign countries; (2) that our exception in the case of Cuba, based on exceptionally close historic ties dating from Cuban independence, aside from being of small practical importance to Argentina, has become generally recognized as a standard exception in United States commercial treaties and agreements entered into since 1902; (3) that the “adjacent countries” exception has not been generally recognized as a defensible exception for the very good reason that it would if generally adopted destroy much of the value of the most-favored-nation clause.

In amplification of the last point, you might point out the serious consequences for Argentina if the United States should allow imports of a wide range of agricultural and other products from the adjacent countries of Mexico and Canada free of duty or at low rates while similar Argentine products were subject to high rates of duty. Such a situation would have arisen if the reciprocal arrangement which was negotiated with Canada in 1910–11, giving Canadian wheat, corn, canned and preserved meats, tallow, and many other products preferential treatment as compared with our imports of such products from Argentina had become effective.

Finally, you should continue to exert every effort, in view of such considerations, to persuade the Argentine authorities to withdraw their suggestion.

Hull