611.2231/487a

The Secretary of State to the Minister in Ecuador (Long)

No. 663

Sir: Reference is made to the Department’s instructions nos. 606 and 623 of August 16 and 27, respectively,12 indicating that a tentative agreement had been reached with the Ecuadoran Minister of Finance to terminate, by means of an exchange of notes, certain provisions of our trade agreement with Ecuador.

There is attached the draft text of a note, in the form for presentation by you to the Ecuadoran Foreign Minister, providing for (1) termination of the pertinent provisions of the agreement and (2) most-favored-nation treatment on a like article basis with regard to exchange control. The latter provision is designed to replace Article X of the trade agreement, which is to be eliminated.

The note to be submitted to you by the Ecuadoran Foreign Minister should be identical, mutatis mutandis, with your note to him, except for the third paragraph which would read as follows:

“The Government of Ecuador will be pleased to enter into negotiations with the Government of the United States, at the earliest practicable date, for the renewal or replacement of the above-mentioned provisions of the trade agreement of August 6, 1938”.

Before submitting the attached draft for the consideration of the Foreign Minister, you should assure yourself that the Ecuadoran Government desires to proceed with the revision of the trade agreement along the lines worked out in the Department with the Ecuadoran Minister of Finance. Once you are assured of this you may present the draft to the Foreign Minister. You should inquire at the same time whether the executive authority in Ecuador is empowered to bring the provisions of the notes into force without their having previously been submitted to the Congress for action.

Please inform the Department if the foregoing procedure and notes are acceptable to the Ecuadoran Government. Upon receipt of an affirmative reply, the Department will suggest a future date on which the notes may be exchanged and the date to be inserted in the second paragraph of the notes, which date will be such as to allow at least a thirty-day period to elapse between the day of signature and the effective date. Meanwhile, the other necessary documents, including the proclamation by the President, will be prepared here.

Very truly yours,

For the Secretary of State:
Dean Acheson
[Page 305]
[Enclosure]

Draft of Note To Be Presented to the Ecuadoran Minister for Foreign Affairs (Tobar Donoso)

Excellency: I have the honor to refer to recent conversations which have taken place regarding the desire of the Government of Ecuador, in view of the financial emergency with which it is confronted, that certain provisions of the trade agreement between the United States of America and the Republic of Ecuador signed at Quito on August 6, 1938, as amended by notes exchanged at Quito on August 6, 1938, September 9, 1938, and September 13, 1938, be terminated.

I now desire to confirm and make of record by this note the agreement which, as a result of the conversations referred to, has been reached between the Government of the United States of America and the Government of the Republic of Ecuador that the provisions of Articles I, II, III, IV (except in so far as it relates to the Note regarding pharmaceutical products following Item 374 of Schedule I annexed to the Agreement), VI, VII and X of the said Agreement of August 6, 1938, as amended, and Schedules I (except for the Note regarding pharmaceutical products following Item 374) and II annexed thereto, shall cease to have force and effect on and after . . . . . . . . , 1941.

The Government of the United States has noted with pleasure the willingness of the Government of Ecuador to enter into negotiations at the earliest practicable date for the renewal or replacement of the above-mentioned provisions of the trade agreement of August 6, 1938.

I also desire to confirm that the Government of the United States and the Government of the Republic of Ecuador are in further agreement, as follows:

1.
If the Government of either country establishes or maintains any form of control of the means of international payment, it shall accord unconditional most-favored-nation treatment to the commerce of the other country with respect to all aspects of such control.
2.
The Government establishing or maintaining such control shall impose no prohibition, restriction or delay on the transfer of payment for any article the growth, produce or manufacture of the other country which is not imposed on the transfer of payment for the like article the growth, produce or manufacture of any third country. With respect to rates of exchange and with respect to taxes or charges on exchange transactions, articles the growth, produce or manufacture of the other country shall be accorded unconditionally treatment no less favorable than that accorded to the like articles the growth, produce or manufacture of any third country. The foregoing provisions shall also extend to the application of such control to payments necessary for or incidental to the importation of articles the [Page 306] growth, produce or manufacture of the other country. In general, the control shall be administered so as not to influence to the disadvantage of the other country the competitive relationships between articles the growth, produce or manufacture of that country and like articles the growth, produce or manufacture of third countries.

It is further understood that, notwithstanding any of the provisions of paragraphs 1 and 2 above, or of the trade agreement of August 6, 1938, as amended, the Government of each country may adopt such measures as it may deem necessary for the protection of its essential interests in time of war or other national emergency.

I avail myself of this opportunity to renew to Your Excellency the assurances of my highest consideration.

  1. Neither printed.