611.2331/275

The Peruvian Ambassador ( Freyre ) to the Acting Secretary of State

Your Excellency: Great efforts have lately been made by the Governments of Peru and the United States to promote trade between the two countries, to facilitate the importation of United States goods to Peru, to create markets in the United States for Peruvian products, and to foster the development of Peruvian products needed in the United States. Financial and technical aid has been granted by the United States to Peruvian agriculture and industry; in short, the United States Government has realized the importance United States markets have acquired for South American products, now that war conditions have closed European markets, and in a spirit of continental cooperation apparently wishes to render these markets available to South American products not competing with domestic products. In conformity with this policy, general trade agreements have been signed during the past few years between the United States and Latin American countries; and at the present time a trade agreement is being negotiated between Peru and the United States.

Long staple cotton, one of Peru’s main products, has for many years been barred from the United States by a 7¢ per pound duty; a reduction of this duty is being considered in the present negotiations. But a quota system established by the United States in September, 1939, as the result of a subsidy to the export of United States cotton—and maintained even after the said subsidy was suspended—constitutes another barrier to the importation of Peruvian cotton to the United States. Any reduction that Peru, through a trade agreement, could obtain on the import duties of cotton, would be useless if quota restrictions were not removed.

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Your Excellency, no doubt, is well aware of the situation; and I am fully cognizant of the efforts made to improve it. Nevertheless, I beg leave to insist on one point.

Long staple cotton is not produced on a large scale in the United States; it has always been imported from abroad. Orders issued for the conservation of wool and woolen fabrics, in view of possible future shortages of the basic raw material, make long staple cotton a much needed product at present; so that its importation from Peru would seem an obvious recourse. Consequently, one would have been led to believe that quota restrictions would be removed in order that long staple Peruvian cotton could be introduced in this country, as the best suited for admixture with wool in the manufactory of hosiery and other fabrics. Unfortunately, such has not been the case. I am informed that the Department of Agriculture is offering United States farmers who are willing to produce long staple cotton a higher subsidy than the one presently established for short staple cotton. When long staple cotton needed by this country is obtainable in Peru and could easily be imported, it has been thought preferable to induce United States farmers to grow that product, excluding thereby the similar Peruvian one.

I sincerely trust that Your Excellency will feel justified in bringing, once more if necessary, the whole situation, as briefly sketched herein, to the attention of the appropriate authorities, so that, if new subsidies are offered to the United States cotton growers in addition to the import duties which already protect them, and to the previous subsidies they enjoy in virtue of the Agricultural Adjustment Act,28 quota regulations for the importation of long staple cotton may be at least withheld.

Please accept [etc.]

M. de Freyre y S.
  1. Approved May 12, 1933; 48 Stat. 31.