612.116/6–2444
The Ambassador in Mexico ( Messersmith ) to the Secretary of State
[Received June 29.]
Sir: [Here follows a discussion of the probable reasons behind the issuance of the Executive Decree published May 12, 1944.]
Having fully in mind the Department’s apprehension as to how Mexico intends to apply the decree of May 12, I went to see Mr. Suárez on June 15 in order to discuss the decree with him. I told him quite frankly that there was considerable apprehension in the Department relative to the use which the Mexican Government will make of the decree and to the extent to which it might interfere with the flow of international trade. I asked Mr. Suárez if the primary purpose of the decree was to protect domestic industry. He replied that the decree would be applied, if necessary, for the accomplishment of two purposes, and said that it might be considered as Mexico’s M–63. He explained that one purpose was to prevent the “dumping” of foreign merchandise upon the market to the detriment of domestic industry. He said that the second purpose would be to maintain adequate monetary reserves by restricting imports. He indicated that in order to accomplish this purpose, the import control would be applied first to luxury items. I told Mr. Suárez that it was the purpose of my Government to reduce instead of increase trade barriers except as the war emergency might demand. Mr. Suárez replied that he fully understood this policy and that naturally he would not make use of the decree of May 12 unless he found it necessary to protect his monetary reserves and some industries.
I told Mr. Suárez that if difficulties should arise in respect to his monetary reserves and certain industries, I felt that many of the problems could be solved by conferences between the two of us in preference to the arbitrary use of the decree of May 12. I told him that by means of such discussions between us, either his Government or our Government, or both of the Governments in cooperation, might be able to take some measures which would remedy the interference [Page 1229] which he anticipated and, thereby, obviate the necessity of applying additional trade barriers to international commerce. Minister Suárez replied that he was quite in accord with this idea and that he would not apply the decree of May 12 to any product without first discussing the matter with me. This is extremely important because it will allow sufficient time to explore the application of other remedies rather than arbitrarily apply the import barrier. Mr. Suárez made the definite agreement with me that there would be a discussion between us concerning these problems before the decree of May 12 would be applied, which will give the two Governments time to explore other avenues of approach.
Regardless of whether or not the decree of May 12 and its application are in direct conflict with the purposes and intent of our reciprocal trade treaty program, I am sure the Mexicans feel that it will be necessary to apply some form of export control in order to protect some phases of their national economy. Finance Minister Suárez, in particular, believes that the industrialization of a weaker nation entails the necessity of protection in order that the industry might survive against the mass production of the stronger nations. This belief on the part of the Mexican Government is in conflict with the policy of the Department not to increase tariffs and other forms of international trade barriers. I am convinced that it will be necessary for our Government to make some concessions with respect to the protection in some form by Mexico of its infant industry. If we are not prepared to do this, then our efforts in aiding these weaker countries to industrialize are largely in vain.
Before closing this despatch I wish to emphasize again the importance of the agreement with Mr. Suárez whereby he will consult with me before he applies the decree of May 12 to any product. This agreement will prove of great importance as it will give us the opportunity to discuss the import and production problems involved before the import control is applied. In these conferences we may be able to find ways and means of avoiding the application of the control to many products.
Respectfully yours,