The utmost importance is attached to the conclusion of the proposed
agreement at the earliest possible date. With this in mind, every effort
has been made to include in this Government’s original offers of
concessions on products imported from Cuba, the most favorable possible
customs treatment. It is believed that the offers which you
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are now authorized to present
to the Minister of State represent the maximum concessions which this
Government is in a position to grant.
With respect to the requests of this Government for concessions by the
Cuban Government on products imported from the United States, it may be
noted that although the number of items is relatively large as compared
with those on which concessions are offered, it is believed that the
value of the trade involved in all items on which duty reductions are
requested does not exceed, with the exception of rice, more than about
3,500,000 pesos per year. Regarding rice, it will be noted that a
request has been made for a reduction in duty from 1.85 to 1.50 pesos
per hundred kilograms. It is believed possible that the Cuban Government
may present a counter-proposal on this item with a view to limiting the
application of the reduced duty to a specified quantity of rice of
United States origin. The trade-agreements organization will, for your
own information, be prepared to consider such a counter-proposal.
It is hoped, in view of the limited amount of Cuban import trade covered
by this Government’s requests for concessions, that the Cuban Government
may find it possible to grant those requests with a minimum of
negotiation.
With respect to the general provisions of the proposed agreement, it is
believed that the comment relating thereto which appears in the attached
note to the Minister of State, covers the principal points involved in
this Government’s proposals. In view of the nature of the changes or
additions suggested, and the fact that the Government of Cuba would gain
definite advantages from the standpoint of ability to secure greater
revenues, it is not anticipated that serious difficulty will be
encountered in obtaining agreement by the Cuban Government to our
proposals. A definitive text covering the proposed changes will be sent
to you as soon as possible.
Full powers to sign the proposed agreement on behalf of this Government,
once an accord has been reached with the Cuban Government, are being
prepared for transmittal to you in the near future.
[Enclosure]
Draft Note From the American Chargé in Cuba
(Briggs)
to the Cuban Minister of State (Cortina)5
Excellency: I beg to refer to conversations
which have taken place with you with respect to the negotiation of a
further supplementary
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trade agreement between the United States and Cuba. Agreement having
been reached regarding a general basis, a public notice of intention
to negotiate a supplementary agreement with Cuba was issued on July
26, 1941, together with a list of the products on which the
Government of the United States would consider the possibility of
granting concessions in the proposed agreement. A supplementary list
of products was issued on August 18, 1941,7 both
this list and the original list having previously been shown to you
and having received your concurrence on behalf of your
Government.
The public hearings scheduled by the announcement of July 26 were
held in Washington on September 8, 9 and 10, 1941, and the
appropriate agencies of my Government have subsequently been engaged
in studying the information received orally and in writing as a
result of the public notice. I am now instructed to submit to you
proposals with respect to the concessions which the Government of
the United States is prepared to offer, the concessions desired from
the Government of Cuba and the various changes which are suggested
in the general provisions of the existing agreement.
In formulating the concessions which the Government of the United
States is prepared to grant to Cuba in return for the concessions
requested upon United States export products, my Government has been
guided by the thought that the negotiations for the proposed
agreement should be brought to a successful conclusion as rapidly as
possible for reasons which I am sure Your Excellency fully
appreciates. In an effort to curtail the length of the negotiations
as much as possible, therefore, my Government has included in its
first proposals what are believed to be the maximum possible
concessions which can be offered to Cuba. These concessions are set
forth in detail in Enclosure I to this note.8
With respect to sugar, the most important item in the proposed
agreement from the viewpoint of Cuba, it will be noted that an offer
is made to reduce the duty on standard raw sugar of Cuban origin
from 90 cents to 75 cents per hundred pounds. In addition, and of
greater importance to Cuba than the reduction in duty which is
offered, is the arrangement whereby, through the elimination of the
present note following item 501 in the agreement, the rate
applicable to imports into the United States of sugar of Cuban
origin will remain at 75 cents per hundred pounds even if
legislation controlling United States sugar production and imports
is no longer in force. If in such an event, however, and as a result
of unforeseen developments and of the concession granted, the
President of the United States found that sugar were being imported
from Cuba in such increased quantities
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and under such conditions as to cause or
threaten serious injury to domestic producers, he would, if he found
that the public interest would be served thereby, impose such
restrictions upon the concession, or modify it by the imposition of
quantitative regulations or otherwise, to the extent necessary to
prevent such injury. A draft text of the provisions to carry out the
foregoing proposal will be found in the note following item 501 in
Enclosure I.
With respect to tobacco, it will be noted from Enclosure I that
concessions are offered in the rates of duty on wrapper, filler and
scrap tobacco of Cuban origin which will have the effect of reducing
those rates to the maximum extent permitted under the Trade
Agreements Act.9 My Government is not offering a further
reduction in the rate of duty on Cuban cigars or to increase the
amount of filler and scrap tobacco which is entitled to entry at the
reduced rates of duty.
In addition to the foregoing, my Government is prepared to offer the
maximum reductions in duty permitted by the Trade Agreements Act on
the following products of Cuban origin: various medicinal products
of animal origin, classified under tariff paragraphs 5, 23 and 34;
marble chip or granite, under tariff paragraph 214; mangoes,
paragraph 746; and fruits in their natural state or prepared or
preserved, under paragraph 752.
On the various types of molasses and sugar sirups, under paragraph
502, an offer is made to bind the existing rates of duty against
increase. On the first item listed under paragraph 502, an
arrangement has been provided in the note following the item whereby
imports of products from Cuba classified under this item will be
admitted at the present reduced rates of duty up to an amount of
1,500,000 gallons per year, with a higher rate, equal to 20 percent
below the statutory rate, applying to imports in excess of that
amount. The note also provides that entries of Cuban molasses and
sugar sirup under this item shall not be permitted to enter at the
reduced rates of duty applying to imports of these products from
other countries by virtue of any concession granted in a trade
agreement with a foreign country other than Cuba. It is also
provided that entries from Cuba under this item shall not be
admitted at reduced rates of duty under customs quotas on such
products which may be granted in other trade agreements. The effect
of the foregoing is to grant Cuba an exclusive concession applicable
to 1,500,000 gallons per year, while at the same time preserving for
the beneficiary for whom it was originally intended, the concession
under item 502 in the trade agreement between the United States and
the United Kingdom, effective January 1, 1939.10 On
other edible molasses
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and
sugar sirups under paragraph 502, the rate of duty now applicable to
imports from Cuba would be bound against increase; in addition,
provision has been made, by a note following the item, whereby no
quantitative limitation would be imposed by the United States on
imports of products under this item from Cuba which would restrict
the importation of such articles to an amount less than the quota
for liquid sugar of Cuban origin specified in Section 208 of the
Sugar Act of 1937.11 On the third type of molasses, covering so-called
blackstrap and high-test molasses, my Government is prepared to bind
the existing low rate of duty.
On fresh, chilled or frozen beef and veal, an offer is made to reduce
the present rate of 4.8 cents per pound applicable to Cuban products
under this item, to 3 cents per pound. On fresh, chilled, frozen,
prepared or preserved frog legs, an offer is made to reduce the
specific rate of duty by the maximum extent permitted, from 4.8 to
2.4 cents per pound, and to reduce the minimum ad valorem duty from
16 percent to 10 percent.
With respect to grapefruit, a concession is offered consisting of an
extension of two weeks, or until October 15, in the present period
from August 1 to September 30, inclusive, during which grapefruit of
Cuban origin may enter the United States at the reduced rate of duty
of 6/10ths of one cent per pound. In connection with this
concession, my Government would desire to enter into an
understanding with the Cuban Government, through an exchange of
notes, on the subject of maturity tests and grade and size standards
of grapefruit exported from Cuba to the United States.
With further reference to paragraph 752, my Government would be
prepared to expand the existing concession on mango pastes and pulps
and guava pastes and pulps, consisting of a 50 percent reduction in
duty, to include all fruit pastes and fruit pulps.
With regard to lima beans, paragraph 765, my Government is prepared
to modify the language of the existing concession in a manner which
it is believed will permit fresh frozen and shelled lima beans to be
imported into the United States from Cuba under the same conditions
as those applying to lima beans in the pod, on which a concession
was granted in the trade agreement in 1934.
In return for the foregoing concessions which my Government is
prepared to offer, there are set forth in detail in Enclosure
II12 the
concessions which are desired for the benefit of United States
export products. The requests cover reductions in duties, bindings
against increased rates and certain requests involving special
tariff problems affecting exports from the United States.
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Rice is the most important single commodity covered by the requests,
and on this item a reduction in duty is sought.
In general, the amount of trade involved in my Government’s requests
covers but a very modest proportion of total Cuban imports, and it
is believed that Your Excellency’s Government will find it possible
to respond favorably to those requests.
With respect to the form in which the requests made by my Government
are presented in Enclosure II, it is believed that the concessions
sought will be found to be clearly indicated in the final column in
those cases in which duty reductions are desired. The underlined
words appearing in certain of the descriptions of articles indicate
the new or additional nomenclature which is desired to replace or
amend existing language. In the case of the first item, razor
blades, under item 53–F, the concession requested consists of a
reduction from 10 percent to 3 percent in the Public Works Tax
applicable to that product. In the case of item 166–D, wooden crates
for packing fruits and vegetable products, the concession sought
consists merely of a binding of existing tariff treatment.
With reference to the general provisions of the existing agreement,
my Government believes that the occasion of the present negotiations
offers an opportunity to effect a number of changes which appear to
be desirable. The amendments suggested are for the most part
intended to provide greater flexibility in the operation of the
agreement and to incorporate improvements in the technical drafting
of several provisions; proposals are also included which will have
the effect of providing greater freedom of action for the Government
of Cuba. Specifically, my Government wishes to propose the following
changes in or additions to, the existing general provisions:
It is believed that Article V, on quotas, might be replaced by a more
modern text. It is felt that certain of the clauses contained in the
present text might more appropriately be included in a general
reservations article applicable to the entire agreement. The
specific text which will be suggested is that which has been
developed by my Government for use in trade agreements.
My Government is prepared to agree to the liberalization of Article
VIII, as amended, on internal taxes, for the purpose of making
reciprocal the provisions relating to compensating taxes, which are
now unilateral, and of releasing the Cuban Government from the
existing restrictions against imposing new or increased internal
taxes for general revenue purposes on products imported from the
United States and included in Schedule I of the agreement.
With respect to Article X, on currency depreciation, my Government
believes that this provision as drafted has not served any useful
purpose and should be eliminated.
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On the question of the exchange control provisions, Article XI, my
Government feels that the present draft should be replaced by
provisions such as those which have been developed more recently in
the light of experience with current exchange problems.
Due to the change which is proposed in the note following item 501,
relating to sugar, it is believed that appropriate changes should
also be effected in the third paragraph of Article XVII of the
agreement, as amended.
I anticipate being able in the immediate future to provide Your
Excellency with a definitive text embodying the foregoing proposals
of my Government.
Accept, Excellency, the assurances of my most distinguished
consideration.
