611.836/13
The Egyptian Minister (
Hassan
) to the
Secretary of State
Washington
, September 25,
1942.
Sir: I have the honour to inform you that the
Royal Egyptian Government has carefully studied the text of the
reciprocal trade agreement between the United States and Peru signed May
7th, 194247 and has come to the
conclusion that the terms of the agreement relating to the importation
of long-staple cotton (cotton having a staple of one and one-eight
inches or more in length) will be detrimental to the Egyptian cotton
trade with the United States. The enclosed memorandum explains the
findings of the competent Egyptian Government Agencies.
Viewing the situation with grave concern, my Government has instructed
me, in bringing this matter to the attention of the United States
Government, to point out that, while fully recognizing the exigencies of
the moment, it hopes that a more equitable solution could be found by
the United States competent authorities which might alleviate the
harmful effects inflicted on a friendly country whose national wealth
depends primarily on cotton.
Thanking you in anticipation for the attention you may give this matter,
I seize this opportunity [etc.]
[Enclosure]
Memorandum by the Egyptian Legation
Egypt has always been and still is a purely agricultural country.
Agriculture constitutes over 90% of its economic activities. Cotton,
although using only a little over 30% of its arable land, is by far
the most important crop from an income point of view as it yields
the nation about 50% of all agricultural income. Egypt consumes less
than 5% of its cotton for domestic industry and the country depends
completely on the export of its cotton.
[Page 96]
While Peruvian cotton constitutes a substantial item in Peru’s
wealth, Egyptian cotton is the life of
Egypt’s economic existence. The following comparisons corroborate
this statement:
Peru’s cotton accounts for 58 percent of the value of Peru’s total
agricultural exports, while Egypt’s cotton accounts for 75½ percent
of the value of Egypt’s total agricultural exports. The value of the
Egyptian cotton exports in 1939 (the last normal year) was over 24 million Egyptian pounds while the
total value of Egypt’s agricultural exports was 32 millions.
Still more striking is the comparison of cotton to the total value of
exports of the two countries. Egypt’s cotton constitutes 71½ percent
of the total value of its exports. In 1939, the value of Egypt’s
cotton exports was over 24 million Egyptian pounds while all exports
amounted to 34 million Egyptian pounds. In the same year, the value
of Peru’s cotton exports was only 19½ percent of the total value of
its exports. The value of Peru’s cotton exports was 75 million Sols
while the value of her total exports was 380 million Sols.
Before the reciprocal trade agreement between the United States and
Peru, signed on May 7th, 1942, the quota for Egyptian long staple
cotton was 43½ million pounds while it was only about 2 millions for
Peru. The global quota introduced into the new agreement will
greatly increase Peru’s share of the quota at the expense of Egypt.
In the first place, Peru’s 35,000 bales (17,500,000) of Pima, of
which only 10% is consumed domestically, could all be exported to
the United States. Peru’s exports of Pima which is the direct
competitor of Egyptian cotton is about 15,000,000 pounds or 33
percent of the global quota. In the second place, demand for Tanguis
cotton is increasing in the United States, while the pre-war markets
for this Peruvian cotton are no longer available. The increase in
the sale of Tanguis to the United States will, therefore, cut still
deeper into the global quota. It is even feasible that the exports
of both Pima and Tanguis to the United States could fill the whole
of the global quota, leaving very little for Egypt which enjoyed
about 95 percent of the total of individual quotas which were in
force before the signing of the reciprocal trade agreement between
the United States and Peru. It is, therefore, apparent that this
agreement is most harmful to the vital interests of Egypt.
It seems, therefore, that the correctional measure for an equitable
solution would be either a substantial increase in the global quota
or its entire abolishment.
