The Chargé in Haiti (Sparks) to the Secretary of State

No. 479

Sir: With reference to the Department’s instruction no. 224 of October 7, 1941, concerning the Commercial Convention signed between Haiti and the Dominican Republic at Port-au-Prince on August 26, 1941,44 I have the honor to report that an opportunity was afforded me yesterday afternoon in a conversation with President Lescot to inquire as to the present status of the convention. The President replied that nothing further had developed but that he intended to send officially to the Legation a copy of the Convention for the comment of the American Government. He explained that he had no direct interest in the consummation of the agreement but that the Dominicans desired it and were pressing him for action. I inquired if it had been his thought that the advantages granted to the Dominican Republic as a contiguous country would be withheld from like products originating in the United States. President Lescot replied that it had been his understanding that this was the purpose of the Resolution at the Montevideo Conference, as amplified at later meetings, particularly those of the Inter-American Financial and Economic Advisory Committee. I informed President Lescot that I would furnish the Minister for Foreign Affairs with information on this aspect of the question. However, it occurred to me that the [Page 354] more serious aspect, as concerned Haiti, was whether or not it was in a position to relinquish approximately 1,000,000 gourdes per annum of its customs receipts.

In a conversation this morning with the Minister for Foreign Affairs relative to the reported closing of the Honorary Danish Consulate at Gonaives, I took the opportunity to refer to the Commercial Convention between the Republic of Haiti and the Dominican Republic. Minister Fombrun stated categorically that when the Convention had been signed he had made it clear to the Dominican negotiators that it was an ad referendum agreement—namely that before it could be ratified by Haiti it would be necessary to obtain the approval of the Haitian Congress and to consult with the Government of the United States with regard to its effects upon Haitian finances. He showed to me a note which he addressed on this subject to the Haitian Minister in Port-au-Prince in the first days of September confirming this understanding. He added that in these circumstances the Haitian Government has treated the Convention as a secret agreement and has given it no publicity, and that the consultations to date have been purely informal (officieux) and not official. He will, however, submit the Convention officially to the National Bank for approval. It will be of interest to the Department that Minister Fombrun recognized the necessity of obtaining the approval of the National Bank before ratification could be made.

I also inquired of Minister Fombrun whether it was his intention to withhold from imports of similar products originating in the United States the tariff reductions to be accorded by Haiti under the Convention to certain imports from the Dominican Republic. Minister Fombrun also referred to the Resolution at the Montevideo Conference and to subsequent resolutions and actions the intention of which appeared to him to warrant some relaxation in the application of the unconditional most-favored-nation clause as concerns the interchange of products between contiguous countries. I pointed out to him that it was the opinion of my Government that the contractual formula for tariff preferences between contiguous countries recommended by the Inter-American Financial and Economic Advisory Committee does not automatically qualify the most-favored-nation provision in the Trade Agreement between the United States and Haiti and, therefore, my Government would expect compliance with the existing trade arrangements between our two countries. I added that it was my understanding, however, that there had been a departure in the recent agreement concluded between the United States and Argentina with respect to the strict application of the unconditional most-favored-nation clause in the trade arrangements [Page 355] between Argentina and contiguous countries. In these circumstances, my Government would expect that Haiti would consult with it before undertaking to extend preferential tariff treatment to any articles imported from the Dominican Republic, and it would be prepared to give earnest consideration to such proposals as the Haitian Government might wish to make. I agreed to furnish the Foreign Minister with a memorandum on this subject which I will do tomorrow, a copy of which is enclosed herewith.45

I then informed Minister Fombrun that while my Government would be prepared to give earnest consideration to such proposals as the Haitian Government might wish to make with reference to the unconditional most-favored-nation obligations in the Haitian-American Trade Agreement, it seemed to me that the possible effects upon Haitian revenues of the Commercial Convention between Haiti and the Dominican Republic merited a serious and detailed study. I recalled that the preliminary study made by Mr. Pixley46 had revealed that the operation of the Commercial Convention would involve a diminution in Haitian customs revenues of slightly more than 1,000,000 gourdes. I added that if the American Government consented to the modification of the rights granted by the unconditional most-favored-nation clause in the Haitian-American Trade Agreement, it was conceivable that the preferential tariff treatment accorded like articles from the Dominican Republic would, to a great extent at least, shift the source of supply of those articles from the United States to the Dominican Republic. Thus there would be entailed the same loss of slightly more than 1,000,000 gourdes of Haitian customs duties as would be the case if the United States insisted upon compliance with its present trade agreement arrangements. I further pointed out that in these circumstances it would be necessary to reduce by a corresponding amount the estimate of revenues for the current fiscal year. I added in this connection that my conversations with the Co-President of the National Bank seemed to indicate that this would not be possible if the Haitian Government proceeded with the restoration of the salary discounts in effect during the past fiscal year. Moreover, it did not appear that there were any other immediately available sources of revenue which might replace the reduction in import duties which must be expected. Minister Fombrun had no suggestions to offer.

During the course of the conversation, the Foreign Minister mentioned that the Minister for Finance, Abel Lacroix, was very opposed [Page 356] to the Commercial Convention on the grounds that Haiti could little afford to relinquish approximately 1,000,000 gourdes of its revenues from customs duties. He also stated that the Dominican reductions on empty sisal bags was simply in anticipation of the establishment in Haiti at some future date of a factory for the manufacture of sisal bags for coffee and possibly sugar. As concerns the concession on Haitian rum, he admitted that this would affect only the superior grades of Haitian rum the production of which is very small. In this connection also, he was not certain as to whether the “15 centimes”, or in Spanish “15 centavos”, meant three cents American or fifteen cents American. The other articles upon which Haiti would receive preferential treatment do not appear to be of any considerable importance.

I later discussed the matter with Mr. Williams of the National Bank who confirmed that the Minister for Finance opposed the Commercial Convention on the grounds that Haiti could not afford to relinquish such a considerable amount of its customs revenues. Mr. Williams was not familiar with the terms of the agreement, but he stated categorically that he was unable to see how the National Bank could give its agreement to the ratification of the Convention.

The difficulty of the situation is that the Dominican authorities are pressing for ratification—so much so that, according to the Foreign Minister, the convention has already been approved by the Dominican Congress, and the Dominican Government is now prepared to exchange ratifications. Apparently, the Dominican Minister in Portau-Prince has made frequent inquiries as to the status of the Convention and has urged prompt action by Haiti. On the other hand, the Haitian Government realizes how strongly the Dominicans desire the ratification of the Convention and it is desirous of making some contribution to an improvement in the commercial relations between the two countries. I feel convinced that if the estimated contribution, in the sum of 1,000,000 gourdes, is to be made by reducing in this amount Government salaries and operating expenses, the present attitude of reluctance upon the part of the Haitian Government will become one of unwillingness. However, as the situation now stands the responsibility for the failure of Haiti to ratify the Convention is unfortunately and unfairly placed squarely upon the United States.

I shall continue to report any conversations that I may have on this subject.

Respectfully yours,

Edward J. Sparks
  1. British and Foreign State Papers, vol. cxliv, p. 754.
  2. Not printed.
  3. Rex A. Pixley, Deputy Fiscal Representative of Haiti. The preliminary study referred to, dated September 3, was sent to the Department by the Minister in Haiti in despatch No. 373, September 5, not printed.