612.113/273a
The Secretary of State to
the Chargé in Mexico (Bursley)
No. 5218
Washington, February 1,
1944.
Sir: Reference is made to the decree of the
Mexican Government which appeared in the Diario
Oficial of December 18, 1943 providing, among other things, for
increased import duties on some 600 products, to become effective
January 17, 1944, and the subsequent action of the Mexican Government,
at the request of this Government, in postponing for thirty days the
effective date of the decree in order to permit an opportunity for
consultation between the two Governments.
You are requested to discuss the matter further with the appropriate
Mexican officials. The objective of your discussion should be the
withdrawal of the decree permanently for the basic reasons outlined in
the enclosed copy of the Department’s memorandum which was handed to the
Mexican Embassy on January 14. It is anticipated, of course, that the
Mexican authorities will resist such a suggestion, and you may therefore
present the reasons set forth below for your position.
With regard to the reference by the Mexican Minister of Finance to the
need for increased revenue as a reason for the tariff increases, you may
point out that this Government naturally would not attempt to indicate
what methods the Mexican Government should adopt to increase its
revenues. It is of direct concern to this Government, however, when the
Mexican Government adopts measures to that end which would have an
important effect on the trade between the two countries. It is therefore
the hope of your Government that the Mexican Government will be able to
find alternative sources for any increased revenues which are
desired.
With regard to the statements by the Finance Minister that the tariff
increases have been promulgated as an anti-inflation measure, you may
point out discreetly that this Government cannot share this view; on the
contrary, by making imported goods more expensive and less easy to
obtain, the tariff increases would appear to have exactly
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the opposite effect.
Anything the Mexican Government might do to facilitate the entry of
products into consumption channels, by curbing price increases and
reducing or at least maintaining tariff rates, would assist in absorbing
excess amounts of domestic currency or foreign exchange. You may also
refer in this connection to the positive efforts which have been made by
this Government to provide as large as possible a supply of goods to
Mexico under present conditions and of our intention to make available
to Mexico increasing amounts of merchandise. There is enclosed a
memorandum prepared in the Department which discusses these points, on
which you may wish to draw for support in your discussions.
In general in relation to the inflation problem in Mexico, you may assure
the Mexican officials that, in addition to making every effort to
eliminate export restrictions as rapidly as possible in order to make
more goods available to Mexico, this Government would be glad to do
everything possible to facilitate further discussions and action looking
to the adoption of effective anti-inflation measures. Such discussions
probably could not be concluded prior to the expiration of the
thirty-day postponement period of the tariff decree, but if the Mexican
Government were willing to withdraw the decree permanently, or at least
postpone its effective date for another period of, for example, ninety
days, that Government could be assured of this Government’s full
cooperation in helping to solve the inflation problem.
The Department expects to send to you within the next few days further
information regarding exports to Mexico which should be of assistance to
you.
Please continue to keep the Department currently informed of the results
of your conversations.
Very truly yours,
For the Secretary of State:
Dean Acheson
[Enclosure]
Memorandum Prepared in the Department of
State
During the past four months, many changes have occurred in the supply
situation in the United States. While certain items such as textiles
and foods have become scarcer than ever, other commodities and
materials, as a result of the completion of war expansion, are in
more abundant supply. As a result, it has been possible to relax
some of the most burdensome controls of exports.
Undoubtedly, the complexity of export controls has had a discouraging
effect on exports and has restricted exports even beyond the
restrictions which were necessary as a result of supply conditions.
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Since the autumn of
1943, all of the agencies concerned with exports have realized the
necessity of simplifying procedures and diminishing controls. The
progress that has been made in this direction can best be shown:
first, through indicating the specific procedural steps taken at the
Foreign Economic Administration and the War Production Board to
simplify and relax export control; and second, through citing
certain specific examples of Mexican projects which have been
granted during the past several months and which could not have
received serious consideration at an earlier date.
Undoubtedly, some time must elapse before the full effect of the
simplifications and relaxations will be translated into export
statistics. There are three reasons for this:
- 1.
- It takes time for the importers to realize that they will
now be in a position to order items which formerly they
could not secure.
- 2.
- It takes time for the exporters to fill the orders which
they receive from the importers.
- 3.
- The statistics are not available until several months
after the exports have taken place.
It is anticipated, however, that there will be a
considerable increase in exports to Mexico during the year 1944. It
is believed that this increase has already begun and will become
more pronounced later in the year. The procedural simplifications
and relaxations are as follows:
[Here follows an outline of procedural simplifications and
relaxations authorized by the Foreign Economic Administration in Current Export Bulletins Nos. 128, 129, 130,
135, 139, and 140 during the past 4 months.]65a
It is anticipated that in the near future the export of certain
repair parts will be authorized under general license to
destinations close to the American border upon certification of the
American Consul at one of the border cities.
While it is true that it has been necessary to revoke the general
licenses applicable to certain food products and certain textiles on
account of increasingly critical supply situation in the United
States, nevertheless, the general trend has been towards relaxation
of export controls and towards simplification of the remaining
controls. Further evidence of this tendency may be found in the
important projects for Mexico which have been licensed during the
past four or five months. A list of the most important of these
projects, together with materials which must be exported from the
United States is attached hereto.66
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It is believed that these projects will have a profound effect upon
the economy of Mexico. Many new industries producing consumer’s
goods from materials which are plentiful in Mexico would have been
started long ago if it had not been for power shortages in the most
important cities. With the elimination of these power shortages and
with the increased supplies of iron and steel that will be
available, it is anticipated that these new industries may now be
started. Thus, the quantities of consumer’s goods available in
Mexico should be greatly increased and an effective blow will be
struck against price inflation.
As soon as possible, an additional memorandum will be prepared
showing the dollar value of exports to Mexico during the past
several years.67
