833.24/1086
The Ambassador in Uruguay (Dawson) to the Secretary of State
[Received March 8.]
Sir: …
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The Embassy has elected to reply within this despatch to the Department’s circular telegraphic instruction of February 12, 3 p.m.46 in order that the Department may be informed concerning the reactions shown by the Uruguayan Country Agency47 to the efforts of [Page 1608] the Embassy to convey in concrete form the idea of the general policy of the Department with respect to the future control of exports both in the United States and in the countries of destination.
The Embassy accepts, as a statement of policy which will hereafter guide its actions in all matters of export control, the verbatim statement of the Department in the telegraphic instruction under reference to the effect “that the time has arrived to commence further progressive and orderly rollbacks of the plan in order to do away with excessive documentary controls in the field, to accommodate the changing production situation in this country, and to avoid endangering our trade position in the future by continuing documentary controls which might develop into trade barriers which may throttle movement as the emergency lessens”.
In its conversations with the Country Agency, of course, the Embassy can refer only to the mutual advantages accruing from the elimination of excessive documentary controls and to the extent such a simplification process benefits the changing production situation in the United States.
The fact that the Embassy was in a position to notify the Department promptly of the agreement of the Uruguayan Country Agency to the elimination of the five commodity groups under reference does not signify that this government organization extended immediate approval, without discussion, to this change in procedure, or that it has acceded, without resistance, to the previous similar changes. The Embassy believes the speedy concurrence in the Foreign Economic Administration proposals was due to its emphatic insistence on the point that any disagreement on the part of the Uruguayan Country Agency with the policy of our government in the matter of its export controls, both in the United States and in the field, could react unfavorably to Uruguay’s supply situation. The Embassy advises the Department of the course it has adopted in presenting to the Country Agency these control amendments, and trusts it has not exceeded its prerogative as outlined in the Department’s instructions.
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The difficulty facing the Embassy in carrying out the announced policy of the Department will lie in the task of dissuading the Uruguayan government agency from adhering to certain of its organic import and exchange controls, most of which predate the war period and which, instead of being weakened, have been strengthened by coordination with our own wartime controls. If the authorities of our government could eliminate entirely the Decentralization Plan [Page 1609] A48 procedure there would still exist in Uruguay a completely defined procedure capable of imposing the same restrictions and defeating the changes which the Department and our government desire, as set forth in the Department’s statement of policy.
The unavoidable severity of the restrictions maintained by our Government during the past two years on the exportation from the United States to Uruguay of the materials and products most needed by this country have caused many, even among importers of long experience, to lose sight of the fact that, during the same period, the same limitations might have been imposed from this end by the Country Agency, acting as an exchange control body, entirely within the functions delegated to it by the National Assembly and the Executive Power. The fact that during this period our government’s limitation of exportations rendered unnecessary the initiative of the Country Agency in holding down importations to Uruguay in no way served to weaken the powers inherent in the Uruguayan official control entity.
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Attention is called to the fact that, in its written agreements to the five rollbacks under reference, in only one instance did the Uruguayan Country Agency fail to cite its prerogative in import and exchange control. The exception was in the case of petroleum products. In the other four written agreements appears the paragraph, translated from Spanish, as follows:
“It should be well understood, however, that importations of materials embraced within the commodity groups under reference always are subject to the authorization and the granting of exchange on the part of our organization.”
Notwithstanding this very concrete statement of policy on the part of the Country Agency, the Embassy feels confident that, eventually and by patient effort on its part, any local control, documentary or otherwise, which, to quote the Department’s instruction “might develop into trade barriers which may throttle movement as the emergency lessens” will be, if not entirely removed, at least greatly modified.
The Department will understand that the efforts of the Embassy will be directed constantly toward the task of convincing the Uruguayan Country Agency of the lack of necessity of those of its existing import controls which might endanger our trade position in the future.
Respectfully yours,
Commercial Attaché