103.9169: Airgram

The Ambassador in Chile (Bowers) to the Secretary of State

A–462. Coincident with the termination of Decentralized Export Control the Consejo Nacional de Comercio Exterior, the local exchange control authority, has requested the Embassy to inquire from the Washington authorities, on its behalf, what licensing and quota restrictions will be in effect covering products formerly under Decentralization. It cites urgently needed tinplate as an example and presumes that an export quota will be established but, without knowledge of the quantity fixed, points out that it cannot grant exchange to individual applicants for its purchase on an equitable basis of distribution.

As previously reported the Consejo Nacional de Comercio Exterior requires a “Solicitud Previa” which is an application for a combination import license and authorization to acquire foreign exchange, which application must be made prior to the placing of a firm order for merchandise to be imported. Prior to the war, applications for exchange were not required until such time as the merchandise arrived and the importer wished to remove it from the customs warehouse. The Embassy sees in the present request a possible effort to obtain a commitment by which those of our licensing controls which are still found necessary will be tied to, or at least synchronized with, local import controls which by restrictive administration, have been misused to protect local industry by the exclusion of competitive products.

Two obvious solutions to the problem posed occur to the Embassy. First, that the Consejo be requested to supply the Embassy with a distribution list on a percentage basis which could be transmitted to Washington for the guidance of licensing officers. Second, that the Chilean Embassy in Washington and/or this Embassy be informed informally of approximate quarterly quotas for those materials likely to remain in short supply.

The Embassy has been requested to make a prompt reply to the [Page 838] Consejo’s letter and would appreciate a telegraphic response. When received the Embassy proposes to raise with the Consejo the entire problem of how it proposes to function in the future, with particular reference to some of the more discriminatory practices that have characterized its operation during the war period.