The Chargé in Uruguay (Chapin) to the Secretary of State
[Received 6:33 p.m.]
163. Department’s 54, April 3, 6 p.m. From the information which Adam20 brought back from Buenos Aires it would appear that the conditions surrounding a possible trade agreement differ considerably between Uruguay and Argentina since in the last year we have become Uruguay’s best customer with a strong balance of trade in Uruguay’s favor and are thus in an excellent bargaining position.
Glover21 and I feel strongly that the proposed negotiations for a trade agreement with Uruguay should be undertaken as soon as possible so that the announcement of intention to negotiate with Argentina and Uruguay may be issued at the same time.
Since there is little in the way of original concessions which might be given Uruguay above those given to Argentina, premature announcement of our possible concessions to Argentina might seriously prejudice any Uruguayan agreement.
In my last conversation with Guani he also expressed the hope that from the point of view of local reaction we would not wait until the Argentine agreement was practically completed before starting negotiations here but that negotiations might be begun immediately.
It is assumed that the Department will advise the Legation as soon as possible of the nature of the new general provisions for the Uruguayan agreement and for any modifications proposed in schedules I and II, but in our opinion the most important single factor with respect to Uruguayan concessions would be a provision for most-favored-nation treatment with regard to exchange. If American goods were granted the same exchange treatment as those coming from Great Britain, duty reductions in comparatively few items would seem necessary.
Further details by air mail despatch.