611.2531/665
Memorandum of Conversation, by Mr. H. Gerald Smith of the Division of Trade Agreements
Señor Gazitúa called again at the Department to continue the discussion of the general provisions of the proposed trade agreement.
Resuming consideration at Article XI, it was agreed for the present to pass over the differences between the Chilean and United States proposals, in as much as it might not be necessary to include the Article in the agreement. All the products on which the United States had requested concessions of Chile are dutiable on a specific basis and only one Chilean product included in the United States offers is dutiable upon an ad valorem basis. If the Chilean Government did not particularly desire the inclusion of the Article, the possibility existed of eliminating it from the provisions.
With regard to Article XII on quotas on products included in the two schedules, no comment in addition to that made by Mr. Fowler appeared necessary, in as much as there had been an erroneous idea in the minds of the Chilean Treaty Commission regarding the schedules referred to in the Article.
Article XIII required no comment.
Regarding Article XIV, it was indicated to Señor Gazitúa that this Government would probably agree to the inclusion of an escape clause, as requested by the Chilean Government, although this was one of the points which would have to be taken up with the Trade Agreements Committee.
[Page 679]On Article XV no particular comment was necessary, except that the same question arose here as in certain other Articles, with respect to the use in the Chilean draft of the words “natural or fabricated products, originating in and coming from” as compared with the language in the United States draft “articles the growth, produce or manufacture …,16 imported from or exported to”.
With respect to Article XVI, on exceptions to most-favored-nation treatment, the comments made in Mr. Fowler’s memorandum were pointed out to Señor Gazitúa who was requested to indicate the reasons for the position taken by the Chilean Government in requesting that trade with contiguous countries be excepted from the provisions for most-favored-nation treatment. He indicated that there were three principal points: (1) the question of geographic proximity; (2) as an offset for the Cuban exception on the part of the United States; (3) the fact that in the Finnish and Swedish trade agreements,17 the United States had permitted exceptions in the case of trade between those countries and neighboring nations.
Mr. Gazitúa also pointed out as a practical matter that the exceptions for Argentina, Bolivia and Peru which were desired by Chile would have no actual significance in view of the fact that Chile had a number of trade agreements or treaties at the present time with various countries which did not provide for those exceptions. Señor Gazitúa agreed to present our point of view once more to his Government and at the same time he was informed that the proposal of the Chilean Government would be brought to the attention of the Trade Agreements Committee.
Regarding Article XVII, it was mentioned to Señor Gazitúa that it was believed that Mr. Fowler’s memorandum contained all the comments that were necessary on the Chilean draft. Señor Gazitúa expressed a desire to have a brief memorandum on the scope of the “constitutional limitations on the authority of the Federal Government” in the case of the United States and it was agreed that he would be provided with such a memorandum.
On Article XVIII it was pointed out that although the second Paragraph of the United States draft did not appear to be absolutely necessary, this Government believed that its inclusion would be desirable.
There was no discussion of Articles XIX or XX in view of the fact that these Articles might be considered more or less “open” until such time as a definite agreement had been reached on other and more important Articles of the agreement.
[Page 680]Señor Gazitúa stated that he would prepare a report for submission to his Government on the basis of the present conversations and it was agreed that we would have another meeting within a few days.