611.2531/623: Telegram
The Ambassador in Chile (Bowers) to the Secretary of State
[Received 1:32 p.m.]
10. Department’s telegram No. 4, January 4, 5 p.m. While Undersecretary of Commerce5a cannot commit the Treaty Commission he personally believes that the improved Schedule II will be satisfactory. As to Schedule I he states that the Commission has estimated that it involves Chilean revenue sacrifice of $268,000 while American revenue sacrifice under Schedule II is only $66,000. He believes that certainly soft wood lumber and almost certainly lubricating oil must be omitted as Chile cannot lose the 75 and $100,000 revenue they represent. The Commission will decide at its next session probably January 15. While there have been protests on certain other items by the Chilean Manufacturers Association he feels they can be maintained.
Regarding general provisions full instructions were air mailed to Gazitúa5b January 6 and I am sending Spanish text of revised clauses as proposed by the Commission by mail tomorrow. There are many verbal changes most of which are not regarded by Vigar as indispensable; and it will be advisable for Fowler to confer quite extensively with Vigar. On article XVI Chile will make a determined stand to secure exemption of countries contiguous to her. Some two years ago [Page 672] the Commission went formally on record that no future Chilean agreement should omit recognition of special treatment for contiguous countries, a principle which Chile advocated as early as 1823.
When the suggestion was made to Vigar that insistence on this point might be fatal he declared that nothing will be allowed to be fatal as Chile has decided that the agreement should be concluded. He mentioned that Argentina has sought to institute mutual consultations with Chile on the trade agreement negotiations and stated that Chile has steadfastly declined.