Memorandum by the Chief of the Division of Commercial Treaties and Agreements (Hawkins)
I explained to the Secretary yesterday that we had reached agreement with Dr. Prebisch on the general provisions, final minutes, exchanges of notes and proposals with respect to the schedules; that I had agreed to seek Secretary Hull’s approval of these documents as a basis for trade-agreement negotiations with Argentina in the event that it should be decided to undertake such negotiations; and that Dr. Prebisch had agreed to recommend them to his Government. I explained to the Secretary further, that if he indicated his approval by initialing the attached covering memorandum,161 would then initial the original and give it to Dr. Prebisch together with the enclosures and ask him to initial our blue copy of it, advising Dr. Prebisch orally that the Secretary had approved the basis.
I pointed out to the Secretary that if he approved the basis as outlined in these documents we would be bound by these proposals if it should be decided to undertake the negotiations, subject, of course, to the President’s approval, to agreement with the Argentines on proposals which they later will make regarding their Schedule I17 concessions to us, and to the qualification that any of our proposed tariff concessions could be altered if new facts or considerations submitted in written briefs or in the public hearings should so require. I said, however, that in view of the extensive hearings held a year ago and the numerous times these concessions have been discussed, it is unlikely that any new facts or considerations will be presented.
After a brief discussion of several points, the Secretary, who had been given these documents for study several days ago, indicated his approval of the proposed basis and initialed the memorandum.
Today I handed Dr. Prebisch the originals of the attached documents after initialing the covering memorandum and obtaining his initials on the attached blue copy. In doing so, I advised him that the Secretary had approved the recommendations embodied in these documents.[Page 392]
I referred to the fact that we have not yet reached an understanding on the basis for Argentina’s concessions in Schedule I of the agreement, and suggested that the proposals now under discussion be considered by the Argentine Government and that the latter Government make definite proposals to us with respect to the Schedule. We would then consider them and submit them for approval. Our proposals regarding the rest of the agreement are, of course, contingent on a satisfactory basis being worked out for Schedule I.
I also emphasized to Dr. Prebisch the necessity of keeping these matters completely confidential; that if there should be premature publicity causing political repercussions here and adversely affecting other important issues, it might be necessary to make denials which would render it difficult to proceed with the negotiations. Dr. Prebisch said that he recognized fully the need for, and importance of, secrecy, and that he did not intend to submit the proposals to the Argentine Government for study until he received word from us that this would be all right; that he would meanwhile confine the studies of these documents to officials of the Central Bank where there would be no danger whatever of leakage.
Dr. Prebisch then referred to his conversation with Mr. Wheeler18 at the Department of Agriculture this morning regarding flaxseed, which he said was very discouraging to him in that it did not appear that the Department of Agriculture has materially changed its policy in the direction of discouraging flaxseed production, and particularly because of the estimate of an official of the Department of Agriculture that imports are not on the average likely to exceed 10,000,000 bushels. He said that in view of Department of Agriculture’s policies and the discouraging outlook for imports of Argentine flaxseed, he felt compelled to make less favorable recommendations respecting Argentine concessions in Schedule I than he had previously intended. For this reason, he was not prepared to recommend the proposals for Schedule I which had been drawn up. Nevertheless, I gave him copies of these proposals, marking them “tentative”, and suggested that on his return to Buenos Aires he draw up a firm offer on Schedule I and submit it to us for consideration. I reminded him, however, that all of our proposals regarding other parts of the agreement are conditioned upon a satisfactory Schedule I and urged him to keep the foregoing in mind in formulating the proposals on this Schedule. I said further that if the proposals submitted by the Argentine Government were materially less favorable than those we had discussed, I did not think they could be accepted.[Page 393]
With respect to the subject of regional preferences, I said that the Secretary, having approved our proposals, is sending a note to this effect to the Argentine Ambassador in reply to the Ambassador’s note on this subject. I asked, however, that care be taken to avoid any publicity on this subject until it comes up in the Inter-American Committee, and that when the matter does become public an effort be made to dispel the idea that this involves the abandonment or any material impairment of the policy of either country with respect to the most-favored-nation principle. I said that press reports of the discussion of this subject at the Montevideo Conference indicated the need of taking steps to avoid such misinterpretation. Dr. Prebisch said that he would make every effort to see that this matter is not misconstrued in the manner indicated.
- Not printed.↩
- Schedule of rates of duties on articles grown, produced, or manufactured in the United States imported into Argentina; not printed.↩
- Leslie A. Wheeler, Director of the Office of Foreign Agricultural Relations.↩
- Not printed.↩
- The Department later agreed to an Argentine suggestion that the three stages here mentioned he reduced to two. This agreement appears as Note I to Schedule I in the final text.↩