Memorandum of Conversation, by Mr. H. Gerald Smith of the Division of Commercial Policy and Agreements

Señor Chavez called by request to receive a tentative list of concessions22 which the United States desired in the proposed trade agreement with Peru, and some time was spent in going over the individual items in the list.

The chief comment by Señor Chavez was that his Government would consider that all the items in the list represented requests for reductions in duty, in as much as the rates used by the United States as a basis for both reductions and bindings had recently been increased by 20 percent and, therefore, the proposed bindings actually represented reductions in duty rather than a consolidation of existing rates. I pointed out to Señor Chavez that while as he had stated, the principal reason for the increased rates of duty was to compensate for the depreciation in the value of the sol nevertheless it would probably appear to exporters in this country that Peruvian rates of duty had been increased more or less during the period of the negotiations and that bindings of the new, higher rates of duty would not in effect be bindings. [Page 678] I also mentioned to Señor Chavez that Peru would, of course, have the benefit of the increased rates of duty on all imports from the United States other than those which finally appeared in Schedule I, as well as upon imports from other countries.

Señor Chavez said that he would transmit the list today by air mail to his Government, in order that studies might be begun in Lima as soon as possible.

  1. Not printed, but see supra.