The Secretary of State to the Ambassador in Cuba ( Norweb )
617. At second meeting on October 23 of Sugar negotiators, Cuban Commission presented lengthy memorandum strongly urging favorable postwar treatment in United States markets. Pending establishment of permanent guarantees, Cubans request transitional agreement covering sale of at least three crops at 3.675 cents per pound; including 550,000 long tons for use as local consumption and free sugar; 500,000 long tons to be exported to United States as direct consumption sugar; continuation of Ceiling Price and Safety Clauses as well as stabilization program. Cubans also request benefit in case of duty reduction and of increase in Puerto Rican incentive payments. Molasses and alcohol included for 3 years.
Cuban memorandum reviewed June negotiations expressing gratification that Cuba should be recognized as meriting equal treatment with Puerto Rico (concerning price, with appropriate allowance for duties and Sugar Act payments). However, proposed legislation before United States Congress with regard to a duty free sugar quota for the Philippines for 20 years and possibility that analagous treatment may be given Puerto Rico might seriously prejudice Cuban long-run sugar position. As it is, the progressive reduction of Cuba’s duty differential (caused by the Peruvian trade agreement)2 and the purchase of Dominican sugar in the past at price equal to Cuban have increased Cuban uneasiness. Any further general reduction of sugar duties would make the situation still more dangerous for Cuba, the memorandum claims.
It was pointed out, furthermore, that Cuba could receive higher prices elsewhere, in markets with which friendly Cuban commercial relations are desirable. Offers in these markets are currently outstanding.
Cuba stands on her World War I and II record of cooperation in requesting “the equitable participation which belongs to her” in the postwar United States market.
The Cuban Commission stated much of memorandum was based on Cuban Senate Committee report and it is planned to publish text in full within day or two in Habana.[Page 947]
Many basic points raised in memorandum appear beyond scope and authority of present negotiations. American negotiators are reviewing memorandum preparatory to replying.