Memorandum of Conversation, by Mr. H. Gerald Smith of the Division of Trade Agreements

[Page 421]
Participants: Señor Guillermo Gazitua, Counselor, Chilean Embassy
Señor Carlos Campbell, Commercial Counselor, Chilean Embassy
Mr. Hawkins
Mr. Woodward
Mr. Smith

Señor Gazitua and Señor Campbell called by appointment to discuss in a preliminary way the procedure to be followed for the negotiation of the proposed trade agreement between the United States and Chile, now that the announcement of intention to negotiate had been issued on October 2.

Mr. Hawkins pointed out that it was our desire that the negotiations for the proposed agreement be conducted in Washington, indicating that with negotiations with other countries in prospect it would not be feasible for the Department to send any representative to Santiago in the near future to assist in the Chilean negotiations. Mr. Hawkins also mentioned the desirability of proceeding as rapidly as possible with work on the general provisions, with the exception of the exchange and quota articles, which would by mutual agreement be left open for discussion at a later date.

Señor Gazitua indicated that he believed it would be agreeable to his Government to have the negotiations take place in Washington as he had already been authorized to carry on the discussions here up to the present time. With respect to the discussion of the general provisions, he agreed that it would be desirable to proceed immediately with these questions but requested that the Department ask our Embassy in Santiago to request the Chilean Foreign Office to expedite consideration of the preliminary text of provisions which he had transmitted to his Government in August but regarding which he had not yet received any reaction. It was agreed that such an instruction would be sent to the American Embassy in Santiago.

Señor Gazitua raised again a question which he had brought up at a previous meeting, namely, the procedure followed in the United States by the Treasury Department in determining the dutiable value of imports on which duties are levied on an ad valorem basis. He pointed out that in the case of melons imported from Chile it appeared that the Treasury Department was doing two things which it was felt were unfavorable to Chilean exports of that commodity: there was being utilized as the rate for converting Chilean to United States currency the “official” Chilean exchange rate of 19.37 pesos to the dollar, a rate which was not used in Chile for general commercial purposes; and the selling price in the United States of melons imported from Chile was being taken as a basis for the assessment of ad valorem duties rather than the f. o. b. price in Chile. Señor Gazitua pointed out that, in his opinion, the rate for converting currencies for customs purposes which should be used was the so-called export draft rate of 25 pesos to the dollar. Señor Gazitua was informed that within the next few days an officer of the Treasury Department would be invited [Page 422]to discuss with him at the Department the practices followed by the Treasury Department in the two matters mentioned above and the reasons therefor.

Señor Gazitua also raised a question as to the exact nature of the product which had been listed in connection with the public announcement of intention to negotiate as spermaceti wax, and it was agreed that he would be furnished with information on this question.

The Chilean Counselor also raised certain specific points regarding the classification for customs purposes in this country of peas and beans imported from Chile and he was informed that we would be glad to discuss this and similar questions with him when our technical studies had advanced sufficiently.

Señor Gazitua mentioned that consideration was being given by his Government to the tentative list of products on which this Government might be interested in securing concessions in the trade agreement, and he indicated that his Government was giving favorable consideration to a number of these, including products the duty on which was so high as to encourage a great deal of smuggling into Chile.

It was agreed that the Chilean representatives would be supplied within the next few days with a copy of the current text of the “standard” general provisions and that it would be desirable as a means of expediting consideration by their Government of the general provisions if each article were to be translated and submitted to their Government as soon as agreement had been reached here with respect thereto.