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

Señor Chavez telephoned and said that he had just had a chance to examine in detail the list of our definitive Schedule II offers [Page 684] which had been handed to him on April 2. He had several questions about the list.

Concerning alpaca and other hair, he wondered why the 50 percent reduction had not been offered on all the items under paragraph 1102(b). I explained the reason for this indicating the desirability of maintaining the absolute spread between the duties on these products in the various forms in which they were imported. In response to another question, I indicated that the offers shown under paragraph 1001 on flax, were bindings of duties already reduced to the maximum extent possible, and not bindings of Tariff Act rates.

Concerning the absence of panama hats, I indicated to Señor Chavez that certain questions had arisen concerning the trade agreement with Ecuador which made it seem desirable, temporarily at least, to withhold offering to Peru a binding of the rate reduced in the trade agreement with Ecuador. I said, however, that if the Peruvian Government were very much interested in this item we would, of course, be glad to reconsider the possibility of including in Schedule II, a binding of the rate reduced to Ecuador.

Regarding the absence of tungsten, I mentioned to Señor Chavez that this product had been included in the list accompanying the public announcement of intention to negotiate with Bolivia, which had been issued on April 4, and whether or not it might be possible to include a concession on tungsten in the trade agreement with Peru would depend in large measure on what was done in the case of the proposed agreement with Bolivia. Señor Chavez recognized that Peru was a minor supplier of tungsten as compared with Bolivia.