611.2231/406: Telegram

The Secretary of State to the Minister in Ecuador (Long)

29. Your telegrams 49 and 50, June 23 and 2746 and despatch 538, June 23.44 It is assumed that the 30 percent plan supplements the [Page 629] existing import permit system. Please confirm. In any case, this Government will expect the Ecuadoran Government to carry out its undertaking in the recent exchange of notes.

The press release will be issued here for use on Thursday, July 6th, unless the Foreign Minister objects to that particular date. Telegraph immediately if that date is satisfactory. The Department does not insist, but believes it desirable that similar statement also be issued in Quito.

No objection is perceived in principle to 30 percent plan, but the following comments should be conveyed immediately to the Foreign Minister unless published text makes them inapplicable:

  • Article 15, fifth paragraph.47 We assume there would be no discrimination as between countries of origin. Final paragraph.48 We also assume no discrimination, such as requiring 30 percent in case of an American product and 10 percent on the same product from another country.
  • Article 2949 clearly conflicts with Article 11 of trade agreement. No reason is seen for such exemption, as deposits may be made in either foreign or local currency. We cannot concur in this provision and if exemptions are granted to compensation transactions, the United States must necessarily insist upon similar exemption for imports from the United States.
  • Article 37. We would expect that any new requirements on imports from the United States will be imposed only in accordance with the provisions of the second paragraph of Article 12 of the trade agreement.

  1. Telegram No. 50, June 27, not printed.
  2. Not printed.
  3. This paragraph provided for exemption from deposit under certain conditions of articles imported for industries.
  4. This paragraph gave the Administrative Council of the Central Bank of Ecuador authority to modify the percentage of the deposit within certain limits.
  5. Article 29 exempted from the deposit requirement authorized importations whose value was covered by exportations of coffee.