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

No. 5160

Sir: Reference is made to the Embassy’s despatch no. 12040 of April 30, 19458 transmitting the text of the counter-proposals of the Chilean Government for a trade agreement with the United States and to the Department’s instruction no. 4934 of May 25, 1945 in which some preliminary observations regarding the Chilean proposals were set forth.

The interdepartmental trade-agreements organization has now studied the counter-proposals and finds that their main features are so unacceptable to this Government that there would not be, as the proposals now stand, any satisfactory basis for negotiations. In the circumstances, the Embassy is requested to present to the Chilean Government the substance of the enclosed draft memorandum8 which [Page 842] analyzes the major differences between the positions of the two Governments.

It is regretted that, after previous unsuccessful efforts, these latest proposals by the Chilean Government are unacceptable. The Department still desires that an agreement be concluded with Chile and sincerely hopes (particularly so in view of the Embassy’s comments in its telegram no. 1090 of August 25 and despatch no. 12599 of August 109 regarding the desirability of negotiating an agreement) that the Chilean Government may find it possible to submit at an early date new proposals that would be acceptable as a basis for negotiations.

The Department of course is aware that, from the Chilean standpoint, a trade agreement would hold very little attraction unless some concession on copper could be obtained. For the Embassy’s own information, urgent attention is now being given to obtaining a decision as to what may be said to President Ríos, in response to inquiries he is expected to make during his forthcoming visit to the United States, regarding the inclusion of copper in a trade agreement with Chile, assuming an otherwise mutually satisfactory basis for negotiations can be found. The Chilean proposals regarding copper as set forth in Article V and Schedule III of the Chilean draft (as well as those regarding nitrates), are quite unacceptable and cannot be considered as constituting satisfactory bases for negotiation.

The Department takes this occasion to express appreciation for the close attention given by the Embassy to this matter, as well as for the Embassy’s commendable work in connection with the recently concluded provisional commercial agreement with Chile.

Any views or suggestions that the Embassy may wish to offer regarding the proposed trade agreement would be welcomed by the Department.

Very truly yours,

For the Acting Secretary of State:
W. L. Thorp
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