103.9169/3889: Airgram
The Ambassador in Uruguay ( Dawson ) to the Secretary of State
[Received June 3—2 p.m.]
A–279. For Crowley61 and Dodson,62 Foreign Economic Administration. Reference is made to Circular Airgram instruction of March 30, 194463 treating of the project of a further rollback of Decentralization to a minimum positive list as of July 1, 1944, and requesting the Embassy’s confidential report on its reaction to this proposal.
In Embassy’s airgram A–117 of March 163 and Despatch No. 3992 of February 29, an endeavor was made to present to the Foreign Economic Administration and the Department of State a comprehensive background of the entire question of control rollbacks, especially as these related to the functional routine and the attitude of the Country Agency.
Sufficient time has now elapsed to make it possible to appraise at their true importance the reactions which have been shown by the Country Agency and the Uruguayan importer to relaxations already effective. As a result of this appraisal, the Embassy feels that it [Page 1615] is in a position to discuss more intelligently the subject of a further rollback of Decentralization to a minimum positive list.
The Embassy favors the elimination of export controls in the United States relating to Uruguay as well as the joint import controls in Uruguay as rapidly as the emergency permits their discontinuance.
The Embassy, as the Foreign Economic Administration and the Department have been advised in its previous communications referred to herewith, undoubtedly will encounter difficulties in explaining control relaxations to the Country Agency, but feels confident that, in the end, it will be able to impose the point of view of our Government.
The serious task facing the Embassy will be that of obtaining a parallel rollback of the Country Agency’s organic import and exchange controls to avoid the neutralization of our government’s relaxations in export controls. This condition has been explained most recently in the Embassy’s despatch and airgram already under reference.
A development related to the recent simplification of the Import Recommendation form will reflect the problem continually confronting the Embassy. The new form does not contain spaces for the indication of prior imports. The Foreign Economic Administration’s instructions clearly covered this omission and the reason for such deletion was communicated to the Country Agency. Nevertheless, the Country Agency has prepared its own supplementary form for this information, basing its action upon its need of such data in establishing the equitable division of estimates of supply. The Embassy made an observation on this point but did not regard it as opportune to adopt a positive stand at this time.
The Embassy’s affirmative opinion as to further rollbacks of Decentralization is founded on basic reasons closely related to future export trade rather than upon any favorable impression thus far made locally by relaxations in the joint control.
The exact situation is that the Uruguayan importer in general has become accustomed to the paper work of the Import Recommendation procedure. The importer is now most concerned in obtaining materials from the United States and seems not to chafe under routine requirements if he can obtain them. Until now the elimination of form-filling routine has not been accompanied by a sufficient loosening in supply to cause any favorable comment on the part of the importer. The fact is that, at this end, the rollbacks thus far have been misunderstood and taken as reflecting a more generous supply policy on the part of our government.
In an endeavor to analyze the Uruguayan importers’ reaction to the present joint control, the Embassy has arrived at the conclusion that this control is a symbol to the importer of scarce limited and restricted [Page 1616] supply and that the importer regards the removal of controls as implying that the supply situation with respect to the materials involved has improved.
The general plaint of the Uruguayan importer is that he can import freely from the United States, merchandise which the Uruguayan market neither knows nor needs, while there are many materials which, with or without Import Recommendations, he cannot obtain and which he and the market really want and urgently require.
The Embassy hopes that, in the announcement of a further rollback to a minimum positive list, the exact relation of the relaxations in control to the possibilities of unrestricted exports will be made very clear.