611.3731/2187

Memorandum of Conversation, by the Assistant Chief of the Division of Trade Agreements (Deimel)

Participants: The Cuban Ambassador, Señor Dr. Pedro Martínez Fraga
Assistant Secretary Grady
Mr. Deimel

The Ambassador called by appointment to discuss the possibilities of winding up the supplemental trade-agreement negotiations. He [Page 573] referred briefly to various earlier stages of these negotiations; he indicated that in the existing circumstances it seemed better to conclude the negotiations on a relatively restricted basis, and said that as he saw it this would mean covering three points: (1) the necessary minor adjustments; (2) the tobacco duties; and (3) the sugar question, in connection with which he referred to earlier discussion of a quota concession on rice and indicated that his Government would be prepared to give such a concession as quid pro quo for a sugar concession.

Mr. Grady said that on the whole the Ambassador’s views seemed to be along the lines of our own: that we had in mind the desirability of winding up the present supplemental trade-agreement negotiations on a restricted basis, leaving to some more propitious time a more general adjustment of economic relations; that we could probably close up negotiations on the various technical questions rather readily, and that the question of the tobacco duties would present no particular difficulty; that with respect to sugar we considered the most desirable solution would be one envisaging restoration of the status quo ante quota removal; that it was important to modify the agreement in such manner as to make sure of the restoration of the ninety cent duty if and when the quotas should be reimposed, but that he could not speak very definitely on this at the moment since we were engaged in discussion with the Department of Agriculture of various aspects of the question of quota reimposition.

The Ambassador intimated that a mere restoration of the ninety cent duty would not constitute such a concession as he had in mind in speaking of a quid pro quo on rice, and asked as to the possibility of a further reduction in the rate, but did not pursue the matter when Mr. Grady indicated that this would not be feasible now; Mr. Grady added that something might perhaps be done by way of providing for maintenance of the ninety-cent rate in the event of a subsequent temporary quota suspension.

The Ambassador said that he was planning to go to Habana at the end of this week or early next week with a view to personally acquainting the President of Cuba and one or two others with the situation; that he thought we should be prepared with a supplemental agreement ready to be signed when quotas are reimposed. Mr. Grady repeated that we were working on aspects of this question and hoped that he might have something more definite to say a little later, before the Ambassador went to Habana, and would ask him to come in again in a few days.