103.9169 Montevideo: Airgram
The Ambassador in Uruguay (Dawson) to the Secretary of State
[Received June 17—8 a.m.]
A–310. For Foreign Economic Administration. Reference is made to Embassy’s telegram no. 521, June 7, 1944. The Embassy’s telegram under reference announced the Uruguayan Country Agency’s acceptance of the proposal of Foreign Economic Administration to shrink the Import Recommendation procedure to the positive list as transmitted in circular airgram of May 25,68 the change to become effective July 1st, 1944.
The Embassy presented this new rollback of Decentralization to the Country Agency as a definite project and flatly on the basis that Foreign Economic Administration would not require Import Recommendations to accompany applications for export licenses after July 1st, 1944, except in the cases of applications covering the commodities appearing in the positive list.
The Embassy’s decision not to present the proposal to the Country Agency as a matter for consideration, the course anticipated in the airgram instruction under reference, was prompted by its belief that [Page 1620] such a procedure held possibilities of creating an impasse and a delay which could defeat what is accepted as the desire of Foreign Economic Administration to obtain for the rollback the unanimous approval of all countries included in Decentralization. The background for this action of the Embassy can be found in Embassy’s despatch No. 3992, February 29, Airgram A–117, March 1st,69 and Airgram A–279, May 27th. These communications also cover the subject of Uruguay’s independent trade controls.
The Embassy has deleted coal and coke from the positive list for Uruguay and, unless otherwise instructed, will permit this action to stand while the present procedure in coal shipments and distribution continues. The deletion was due to the fact that the Country Agency had already established a precedent by eliminating coal imports from Decentralization. The Country Agency, at the beginning, adopted a firm though friendly stand in declining to consider Import Recommendations for coal, taking the position that its approval of the same would be only pro forma and consequently of no value. However, the Country Agency has expressed confidentially a preference for the separation of coal from Decentralization. This privately communicated attitude of the Country Agency is based upon the fact that certain existing Uruguayan laws governing coal control would, if the organization should intervene in any coal requirement procedure, compel it to take an action which could only produce complications.
The Embassy, in its previous communications on rollbacks, has endeavored to indicate that, at least in Uruguay, the importer has come to associate our export controls as directly related to supply. Despite the completeness of explanations to the contrary, the Uruguayan importer persists in the belief that, when an export control is removed from a material by our government, the material is in unrestricted supply. It is for this reason that the Embassy has, in its previous communications, stressed the point that it would have a beneficial effect locally if announcements by Foreign Economic Administration could present as closely as possible the relation between, the relaxations in control and the availability for export of the commodities released from Decentralization procedure.
There have been eliminated from Decentralization procedure numerous commodities which, until now, have been under Estimates of Supply, and which, according to current information, are still in either scarce or limited supply in the United States. Many of these Estimates of Supply have represented only a fraction of Uruguay’s requirements in normal years of the commodities in question and have not even approached the most essential requirements of the country during the present emergency period.
[Page 1621]The Uruguayan Country Agency, in numerous instances, has received applications for materials covered by these Estimates of Supply in quantities representing up to 20 times the amount of the Estimate of Supply. Of course, these materials will continue to be shipped from the United States to Uruguay. The Embassy confesses some anxiety in the matter of the program which will be adopted by Foreign Economic Administration to cover shipments of these materials which are not in abundant and unrestricted supply. The Embassy does not even imply a belief that Foreign Economic Administration has not foreseen this problem but, in view of the serious relation its solution bears to the possibility of a tightening of the independent trade controls of Uruguay, the Embassy is eager to learn at the earliest moment possible the means which Foreign Economic Administration will adopt to administer an equitable distribution among the importers of Uruguay of the exports of materials in restricted supply.