611.3331/431a: Telegram

The Secretary of State to the Ambassador in Uruguay (Dawson)

324. Embassy’s despatch no. 270 of November 5, 1941, and telegram no. 477, November 14, 7 p.m.

For your confidential information, British postwar commercial policy in so far as it affects the United States is now being discussed in both London and Washington in connection with the negotiation of a lend-lease agreement52 and exploratory discussions relative to a supplementary trade agreement with the United Kingdom and trade agreements with certain of the Dominions. Therefore, the Department feels that you should refrain from taking up this matter officially with the British Minister at this time. However, should the opportunity present itself, the Department perceives no objection to your discussing the matter with him in general terms on an informal basis.
It is not our intention to seek in a trade agreement with Uruguay more rigorous assurances of nondiscriminatory treatment than we obtained in our recent agreement with Argentina; more particularly, we would not expect to include therein provisions which would require a modification of Uruguay’s war-time payments arrangement with the United Kingdom. What we do hope to obtain is formal recognition on the part of the Uruguayan Government of the basic principles of nondiscriminatory treatment and multilateral trade with assurances that it will, on the coming into force of the agreement, abolish existing discriminations against imports of American origin other than those excepted in the two proposed exchanges of notes as was done in the case of Argentina. Even these we would expect to have eliminated as rapidly as circumstances permit.
It would appear that Uruguay’s present trade position and import control system would permit its acceptance of general provisions and related notes substantially the same as those contained in our agreement with Argentina. As regards this point, please report specifically what modifications, if any, of Uruguay’s present import control system and contractual obligations would be necessitated by its acceptance of general provisions and related notes [Page 585] similar to those in our trade agreement with Argentina. In this connection, the Department perceives no good reason why Uruguay should continue in force contractual commitments to certain countries other than the United Kingdom, if such commitments, which have become practically inoperative because of the war, stand in the way of the conclusion of a trade agreement with the United States embodying the principles of nondiscriminatory treatment.
Accordingly, unless you perceive objection, you should inform the appropriate Uruguayan authorities in the sense of the foregoing and state that therefore the Department, while prepared to accept the same reservations on Uruguay’s part as are contained in the two exchanges of notes accompanying the trade agreement between the United States and Argentina, nevertheless feels that it cannot agree to a further reservation such as that embodied in the third exchange of notes proposed by the Uruguayan authorities. Such a reservation might in certain circumstances be construed as in effect completely nullifying the proposed provisions of the agreement relating to nondiscriminatory treatment by Uruguay of American commerce. However, you should state that if, following the coming into force of the agreement, any circumstance should develop in Uruguay’s commercial relations with a third country which it considered, because of the commitments in its trade agreement with the United States, had the effect of prejudicing the commerce of Uruguay, the Government of Uruguay might invoke paragraph 1 of Article XII of the proposed general provisions.
With reference to the Uruguayan statement that the trade agreement concluded recently between the United States and Argentina accords the latter nation advantages which do not benefit Uruguay, you should point out that the tariff concessions granted by the United States to Argentina apply to products which in 1939 and 1940 accounted for 62 and 35 percent, respectively, of the value of total imports for consumption into the United States from Uruguay. In this connection, you should also emphasize that the conclusion of a trade agreement between the United States and Uruguay would provide a contractual basis for the continued extension to Uruguay by the United States of the benefit of the tariff concessions made by the United States in existing trade agreements with Argentina and other countries, as well as any concession on fine wools which the United States might at some future time grant in a trade agreement with the principal supplier of these wools.
A revised text of the proposed note regarding preferences by Uruguay to the United Kingdom, enclosed with your despatch under reference, will be forwarded by air mail shortly.