611.3531/1097: Telegram

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

187. Your despatch no. 163 of September 29, 1939. You suggest, in the final paragraph of your despatch under reference, that if the other experts to assist you in the negotiations were to sail before agreement is reached on the fundamentals of the general provisions it would place you at some disadvantage. In as much as the plan is for these experts to sail October 20, the matter requires immediate consideration. The Department does not consider it advisable to postpone their sailing for the following reasons.

In view of the large amount of detailed work involved in connection with negotiating the schedules, any material delay in the beginning of this work would greatly enhance the difficulty of completing the negotiations by January 1.

A further reason for having the group sail as planned is the belief that the agreement of the Argentine officials to the general provisions as desired by this Government might be facilitated if the main outstanding issues were dealt with conclusively after the schedules have been discussed and those authorities are able to visualize the trade agreement as a whole. During the discussions which have taken place here with the Argentine Ambassador intermittently over a period of several years, he constantly argued that matters relating to the treatment of American trade in respect of Argentina’s exchange control system could not be dealt with until Argentina was in a position to know what tariff concessions would be offered by the United States. In the light of this experience it is even conceivable that the Argentines may now be deliberately withholding acceptance of our position on certain major points until they see what tariff concessions we will offer. In these circumstances, it seems advisable to continue discussions, maintaining our position on all the important points in the general provisions and emphasizing in every way the importance we attach to them but avoiding if possible bringing these questions to a definite and final conclusion until after the schedules have been fully discussed.

A further reason for deferring conclusive action on the general provisions prior to discussing the schedules is that with a little more time the effect of the European war on the Argentine position may tend to clarify itself.

The Department realizes, of course, that the sailing of the group of experts from here, in the face of Argentina’s non-acceptance of certain fundamental points in the general provisions, may imply to the Argentine authorities that less importance is attached to those points than you have represented. Possibly this implication could in part at least [Page 271] be avoided if you were to say that while a satisfactory adjustment of the points now at issue is vital to the conclusion of an agreement, it seems, nevertheless, incumbent upon the two Governments to go on with detailed discussions covering the entire scope of the agreement with a view at least to completing the task of ascertaining definitely and in detail wherein divergences exist.

The Department had hoped, in view of the discussions preceding announcement of negotiations, that the general provisions could readily be disposed of before the beginning of definitive discussions on the schedules. In view of the situation which now appears to be developing the best course seems to be to abandon this plan and proceed as outlined above. However, the Department would be glad to have any comments and suggestions that may occur to you.

Hull