Foreign Relations of the United States Diplomatic Papers, 1939, The American Republics, Volume V

611.3731/2242½

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

[Washington,] December 16, 1939.

Participants:	Señor Dr. Pedro Martínez Fraga, Cuban Ambassador
	Mr. Deimel
	Mr. Smith

The Cuban Ambassador called this afternoon to receive and discuss the replies to the observations relating to the supplementary trade agreement which he had handed to Mr. Grady on December 15. The informal memoranda, of which copies are attached,⁹⁰ were handed to him on these points and several additional points of minor technical significance.

The Ambassador read these over and indicated that they were completely agreeable to him with the exception of the question of exempting certain sugar from the 1940 quota even if it came in after January 1. He said he thought there was some danger that the importers of this sugar in the United States might not consider it in their interest or necessary to pay the duty and clear the sugar before January 1 so that it might be left in customs jurisdiction until next year and be charged against the Cuban quota. I explained that I had discussed this point with Mr. Bernhardt,⁹¹ who did not seem to feel that this was likely and did not feel that there was any scope in the sugar legislation to alter the practice of charging imports against a quota at the time it is withdrawn from customs custody; that he had not, however, said that I could make a flat statement that this was impossible and that he would look into the question again, although he doubted very much that any possible leeway would be found. I pointed out that in any case it was a matter affecting quota administration rather than the trade agreement.

The Ambassador said he had no desire to delay the conclusion of the trade-agreement negotiations and suggested leaving it this way: that the trade agreement would be concluded as proposed; that the Department of Agriculture’s belief that there would be no problem of sugar not cleared might prove correct; but that if, say around Christmas, it appeared that the Ambassador’s fears would be realized, that we would then again confer on the situation to see what could be done. I pointed out that I could make no promises as to what might be done, but that I felt sure that we would be glad, if his fears showed any sign of eventuating, to look into the situation with him again to see what, if anything, could be done.^*

I indicated also to the Ambassador that some apprehension had been felt in the Department of Agriculture that if undue advantage were taken of any period during which the duty might be reduced, but before quota limitations were again in effect, to land and clear an extraordinary amount of Cuban sugar, that it would raise difficulty in Congress and probably result ultimately in an equivalent curtailment of Cuban quotas. I did not say that this would happen, but that it was something to bear in mind, in which the Ambassador seemed to concur.

With respect to the subject of rice the Ambassador indicated that the suggested method of handling this matter was entirely satisfactory, that he had this question very much at heart, and that he hoped we could discuss it with the Cuban Secretary of Agriculture when he was here next week.

We also discussed the time schedule, it being agreed that so far as practicable it would be planned to sign the agreement Monday evening, release it to our press upon signature for publication in Tuesday morning’s papers, obtain ratification in Cuba on Tuesday and provide for exchange of ratification and proclamation on Wednesday, December 20, so that the agreement can enter into effect Thursday, December 21. I said that we would probably wish to release the text of the agreement with a short press release of four or five pages; that we were working on this press release⁹² and that I would try to clear it with him over the weekend. I also said that there was some technical change in the sugar note to clarify its intent which Mr. Reinstein was now going over with the Treasury. The Ambassador asked that a clean text of the agreement be provided him in time to send it to Cuba by airmail Sunday evening.

[For text of the supplementary trade agreement and protocol, signed at Washington, December 18, 1939, see Executive Agreement Series No. 165, or 54 Stat. 1997. On the same date, the Secretary of State and the Cuban Ambassador signed the memorandum printed infra.]

90. Not printed.
91. Joshua Bernhardt, of the U. S. Department of Agriculture.
92. I later discussed this question with Mr. Grady and Mr. Bernhardt and they both felt that this was the correct answer. Mr. Bernhardt noted that some small amount of sugar in bond might belong to people who would have no special interest in clearing it before the end of the year but did not feel that this would amount to very much, and although he did not feel that there would be any scope in the quota legislation to exempt any such quantity if it came in after the first, nevertheless he felt that one or the other of the governments might find some way of relieving any such situation if it should develop. [Footnote in the original.]
92. For press release of December 19, see Department of State Bulletin, December 23, 1939, p. 729.