621.2231/11–2944

The Secretary of State to the Chargé in Colombia (Daniels)

[Extracts]
No. 2634

Sir: I refer to the Embassy’s telegrams nos. 1959 and 1962 of November 2982 and to its despatch no. 4683 of November 2, 1944 regarding the request of the Colombian Government for a waiver of this Government’s most-favored-nation rights in connection with exclusive advantages which Colombia might grant to neighboring countries.

I enclose a draft of a memorandum which the Embassy may use in reply to the memorandum submitted to the Embassy by the Colombian Government, a copy of which was enclosed with the Embassy’s despatch under reference. Also enclosed is a draft exchange of notes which the Embassy is requested to suggest to the appropriate Colombian authorities.81

. . . . . . . . . . . . . .

For the Embassy’s information, the Department has received no request from the Ecuadoran Government for a waiver of most-favored-nation rights in connection with this commercial treaty other than a request made in October 1942, to which no direct reply was made because there seemed at the time to be little possibility that the treaty would be ratified by both Governments. However, when the Embassy’s despatch under reference was received by the Department, an instruction was sent to the American Embassy at Quito informing it of what had transpired and suggesting that before bringing up the question of an exchange of notes between Ecuador and the United States, the Embassy press for a decision regarding a matter which this Government has had before the Ecuadoran Government for some time, i.e., the regularization of commercial relations between the United States and Ecuador on the basis of the trade agreement as modified by notes exchanged in March 1942.83 It was further suggested [Page 831] that following the discussion of this subject, casual reference might be made to the treaty developments in Colombia and to the Ecuadoran request in 1942 for a waiver of our most-favored-nation rights, pointing out, however, that unless the Ecuadoran Government were prepared to take some definite action on the matters discussed, this Government would find it extremely difficult to agree to action such as the requested waiver, which would further disrupt the operation of the trade agreement. Our Embassy at Quito was instructed that if it was successful in obtaining action on the outstanding trade agreement questions, it could indicate that this Government would be willing to exchange notes with Ecuador along the same lines as in the case of Colombia.

The Department has as yet received no reply from the Embassy at Quito. I shall keep you informed of developments there, but, unless you perceive objection, it is felt that the exchange of notes with Colombia, need not be delayed until arrangements are completed for the exchange with the Ecuadoran Government.

Very truly yours,

For the Secretary of State:
Dean Acheson
[Enclosure]

Draft Memorandum

The memorandum of October 31, 194484 from the Government of Colombia refers to the contractual formula for tariff preferences to contiguous or neighboring countries recommended by the Inter-American Financial and Economic Advisory Committee on September 18, 194185 and cites various precedents whereby the Government of the United States has, in accordance with this formula, agreed not to invoke the provisions of the most-favored-nation clause in its agreements with certain countries in respect of tariff preferences granted or which might be granted by these countries to contiguous or neighboring countries.

In these circumstances the Government of Colombia feels that the Government of the United States will no doubt express its agreement not to invoke the provisions of Article VII of the trade agreement between the two countries signed on September 13, 1935 in order to claim the benefit of exclusive trade advantages that Colombia might grant to contiguous or neighboring countries.

While recognizing its adherence to the formula recommended by the Inter-American Financial and Economic Advisory Committee, the Government of the United States desires to point out that in its view [Page 832] the formula was recommended in 1941 because of the unusual trading conditions resulting from the war, in which many normal markets were closed, there were transportation difficulties, and neighboring countries perforce had to seek trade with each other to a greater extent than had developed in pre-war years. In agreeing to the recommendation, the Government of the United States placed great importance on the three requirements of the formula quoted below.

“That any such tariff preferences, in order to be an instrument for sound promotion of trade, should be made effective through trade agreements embodying tariff reductions or exemptions;

“That the parties to such agreements should reserve the right to reduce or eliminate the customs duties on like imports from other countries;

“And that any such regional tariff preferences should not be permitted to stand in the way of any broad program of economic reconstruction involving the reduction of tariffs and the scaling down or elimination of tariff and other trade preferences with a view to the fullest possible development of international trade on a multilateral unconditional most-favored-nation basis.”

It is understood that the Treaty of Commerce between Colombia and Ecuador, signed on July 6, 1942 and amended on October 14, 1943, is being considered for ratification by the Colombian Congress. In that event, the Government of the United States will agree, by means of an exchange of notes, to waiving its most-favored-nation rights in respect of the exclusive preferences granted to Ecuador by Colombia in Article V of that treaty.

With regard to any exclusive trade advantages that Colombia might propose to grant in the future to contiguous or neighboring countries, the Government of the United States would be glad to give consideration to such contingencies if they should arise, again having in mind the three requirements of the formula set forth above and the circumstances under which it was recommended.

  1. Neither printed.
  2. Not printed.
  3. Department of State Executive Agreement Series No. 248; 56 Stat. (pt. 2) 1472.
  4. Not printed.
  5. Inter-American Financial and Economic Advisory Committee, Handbook, pp. 61–62.