The Secretary of State to the Executive Secretary of the Executive Committee on Economic Foreign Policy (Carr)

My Dear Mr. Carr: I wish to acknowledge the receipt of a letter dated June 12, 194454 that was sent to you by Mr. Arthur Paul, Chairman of the Sub-Committee on Inter-American Economic Development, requesting a statement of the objectives which led to the establishment of the Mexican-American Commission for Economic Cooperation, and making a further specific inquiry whether preferential treatment for Mexico was one of the considerations which motivated the Commission’s formation.

It is clear to the Department that the intended function of the Mexican-American Commission was, essentially, to study (1) the repercussions on Mexico’s economy of a high level of exports, and a large inward capital movement, at a time when the war had restricted imports of goods, and (2) the inflationary situation in Mexico arising from increased peso holdings and incomes, and failure of the supply of goods (domestic or imported) to keep pace with this increase. As a result of such study, a program for economic cooperation was to be formulated, having in mind particularly the maintenance and possible increase of the production of strategic materials by Mexico.

With respect to your inquiry on behalf of the Committee as to “whether preferential treatment for Mexico was one of the considerations which motivated the Commission’s formation”, it is the Department’s view that this could not have been a consideration as it would have been in direct conflict with this Government’s long-standing and consistent position that the principle of equality of treatment is the basis of all acceptable commercial policy.

The records available to the Department of State do not indicate that the question of preferential treatment for Mexico (as compared to the other American republics) was raised or considered at any time during the period in which the formation of the Mexican-American Commission for Economic Cooperation was under discussion.

I trust that this information will give adequate explanation to the members of the sub-committee as to the policy of this Government. This policy was publicly set forth in the statements made by responsible officials of this Government at the time of the adoption of the third resolution of the Consultative Meeting of Ministers of Foreign Affairs of the American Republics held at Rio de Janeiro in 1942. The resolution entitled “Maintenance of the Internal Economy of the American Countries” recommended inter alia that “all the nations of this [Page 1209] continent have access, with the greatest possible degree of equality, to inter-American commerce and to the raw materials which they require for the satisfactory and prosperous development of their respective economies, provided, however, that they shall give preferential treatment to the nations at war for equal access to materials essential to their defense; and that, in agreements which may be concluded, the essential needs of other American countries be considered with a view to preventing dislocations in their domestic economies.”

This long-established practice of this Government and the multilateral commitments which the United States and the Mexican Governments have entered into, would preclude this Government taking any action which would grant to Mexico, or to any other of the American republics, treatment in the supplying of equipment or machinery on any basis other than that of equality of treatment.

Sincerely yours,

For the Secretary of State:
Harry C. Hawkins

Director, Office of Economic Affairs
  1. Not printed.