Memorandum by the Chief of the Division of Commercial Policy and Agreements (Hawkins) to the Secretary of State

Paraguayan Trade Agreement Negotiations

Mr. Secretary: Further discussions were held in New York over the weekend with the Paraguayan Finance Minister63 regarding the points on which agreement should be reached before issuance of the notice of intention to negotiate. An agreement was reached, subject to your approval, along the following lines:

It was pointed out to the Finance Minister that it had been our practice to consider all charges collected at the customs (before release of the goods), whether basic import duties, import surcharges or internal taxes collected at the customs, as charges on or in connection with importation, thus being distinguished from charges (which we considered internal taxes) collected on imported goods after release from the customs.

On the basis of such a distinction, the Finance Minister agreed to accept the substance of our “standard” provision for national treatment on internal taxes, and for a binding of all import charges without exception on products on which concessions would be granted. This would mean: 1) national and most-favored-nation treatment without any exception in the case of internal taxes collected after release of goods from the customs; 2) most-favored-nation treatment on imported goods with respect to all charges collected at the customs before release of the goods; and 3) binding without exception of all charges collected at the customs on goods imported from this country on which concessions may be granted.

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With agreement by the Finance Minister on the above points as a basis for negotiations, I believe we are quite safe in issuing public notice64 before the President of Paraguay65 starts his journey home tomorrow. A draft press release for that purpose is attached for initials, if you approve. There is also attached for initials’a memorandum of understanding66 on the above points, which would be handed the Finance Minister, if you approve.

Harry G. Hawkins
  1. Rogelio Espinoza.
  2. For public notice of intention to negotiate a trade agreement with Paraguay, released June 23, 1943, see Department of State Bulletin, June 26, 1943, p. 597.
  3. Higinio Morínigo, President of Paraguay, was on a visit in the United States during June; see pp. 690692.
  4. Attachments not printed.