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

Participants: Assistant Secretary Grady
Señor Guillermo Gazitúa, Counselor, Chilean Embassy
Mr. Smith

Señor Gazitúa called on the Assistant Secretary by appointment, to receive the proposals on Schedules I and II which had been formulated by this Government for the proposed trade agreement between the United States and Chile.

In giving the proposals to Señor Gazitúa, Mr. Grady noted that copper had not been included in Schedule II for the principal reason that the trade-agreements organization, after a very thorough study of the subject, had come to the conclusion that a reduction in the import tax to the extent permitted in a trade agreement would be of little value to the Chilean Government. Señor Gazitúa admitted that his Government had not, in the original stages of the conversations, placed particular emphasis on copper, but stated that in view of the extreme opposition which had developed in the United States against any concession on copper and the considerable comment which had appeared in the Chilean press, his Government might feel it necessary to explain why that item would not appear in the proposed trade agreement. [Page 431] Mr. Grady suggested that we might be able to supply Señor Gazitúa with some information for such an explanation.

Señor Gazitúa noted particularly the absence of dried beans and onions from the list of products on which the United States was prepared to offer concessions and stated that he believed his Government would find it extremely difficult to conclude an agreement which did not contain concessions on those products. Señor Gazitúa was assured that onions and beans had been the subject of thorough investigation by the trade-agreements organization and it was finally concluded that, in view of the existing domestic situation of crop surpluses and purchases by the Federal Surplus Commodity Corporation of excess stocks, no concessions could be offered.

Upon leaving Mr. Grady’s office the conversation was continued in the Trade Agreements Division and Señor Gazitúa was supplied with statistical information on those products appearing in the published list of October 2 which had not been included among those on which concessions had been offered by the United States. Señor Gazitúa stated that he would transmit the proposals to his Government by airmail on December 11 and he was informed that, in accordance with a previous oral understanding, the lists of concessions offered and requested by this Government were being sent to our Embassy in Santiago for expeditious presentation to the Chilean Government.