611.2231/409: Telegram

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

30. Your 53, June 30, 5 p.m. As the 30 percent plan completely supersedes earlier import control regulations, and it appears from clause b) of article 14 that import permits will be issued without any restrictions on value or source of imports, following 30 percent deposit and presentation of application in proper form, articles 7 and 8 of the trade agreement do not appear pertinent to the new system. As this Government’s efforts over the past several months were directed to securing compliance by the Ecuadoran Government with those articles in view of their applicability to the import control system then in force, the termination of that system makes pointless the issuance of a press release describing an agreement worked out on the basis of that system. A release will therefore not be issued here at this time.

For the present, you should observe closely and report on the operation of the 30 percent plan, keeping in mind particularly the provisions of article 11 of the trade agreement. It should be borne in mind, however, that if any applications for permits covering imports from the United States are rejected, the provisions of articles 7 and 8 of the trade agreement once more become applicable.

Despite Ponce Borja’s explanation regarding coffee screenings, we still find objection to article 29 of the new law in that, in effect, it places in a preferential position trade with countries importing such grades of Ecuadoran coffee and hence discriminates against all countries not taking such coffee.