611.2531/633: Telegram
The Ambassador in Chile ( Bowers ) to the Secretary of State
[Received 2:15 p.m.]
18. Department’s 15, January 13, 2 p.m. In conferences during the past 4 days Fowler, Allen and Frost9 have gone over the general provisions completely with Vigar, with special emphasis on those articles mentioned in the Department’s telegram under Reference.
In connection with article II Vigar points out that it is impossible to grant national treatment because of legislation, especially laws 5786 and 5991. However, he agreed that national treatment with respect to all future legislation could be granted. A reservation covering exceptions under existing laws should make our draft acceptable.
With respect to article III Vigar stated that although Chile would try to give us the best possible treatment with respect to the allocation of quotas, the Treaty Commission was unwilling to recommend acceptance of a definite commitment to give us shares based upon a previous representative period because of pressure from other countries with which Chile has agreements. It is hoped that this matter [Page 674] will be reconsidered in the light of the extended discussion of the essential elements of our proposal. When it was pointed out incidentally that under the proposal a global quota could be established without the necessity of allocation, Vigar stated that Chile had to allocate in most cases.
The Chilean objection to article IV is that if they included it in the form proposed by us they would have to establish a single rate for dollars and that they would be subjected to pressure from third countries. They cannot see the advantage of including the article with a protocol, when they will undertake in their draft to do the best they can under existing circumstances. The discussion was centered on the point that negotiations were undertaken on the definite understanding that Chile would accept our exchange article,10 with a protocol if necessary. An effort was made to convince Vigar that such a protocol would not be a reflection upon the Chilean Government but merely recognition of temporary factors beyond its control.
Article V was apparently omitted in the belief that it was too rigid to be applied. It will doubtless be reconsidered in the light of the discussions.
Article XI was omitted partly because of failure to understand its scope and meaning and also because Chile has not yet definitely decided on what methods will be used in determining dutiable value in applying article XXXVIII of law 6334.
The omission of article XI was explained partly on the ground that the Treaty Commission considered the subject covered by article III. It seems that there was the notion also that the article referred to schedules of some sort other than Schedules I and II. When the purpose of the article was pointed out to Vigar he evinced interest and said that our point of view would be presented to the Treaty Commission.
With respect to article XVI it was pointed out by Vigar that the United States insisted upon including an exception for preferences now or hereafter granted to Cuba and that we could not therefore reasonably expect Chile to abolish her preferential arrangements with Argentina, Peru and Bolivia. Vigar … admitted … that … in the case of Argentina there were vital political as well as economic considerations. Vigar did say that he thought Chile would agree to name these three countries instead of covering them with the general term “contiguous countries”. From the discussions which brought out entirely clear the arguments and points of view on both sides it is thought that Chile will steadfastly and not without reasons refuse to give up at least its present preferences to Argentina and Peru [Page 675] and those contained in the treaty with Bolivia which has not yet been approved by the Chilean Congress.
Vigar promised to present our suggestions and points of view to the Treaty Commission and asked for a memorandum which Fowler completed before he left this morning. This will be handed to Vigar today and a copy will be forwarded to the Department by mail tomorrow.11
- Wesley Frost, Counselor of Embassy in Chile.↩
- See telegram No. 125, September 23, 1939, 6 p.m., to the Ambassador in Chile, Foreign Relations, 1939, vol. v, p. 412.↩
- Not printed.↩