The Ambassador in Mexico ( Messersmith ) to the Secretary of State
[Received February 7.]
Sir: I have the honor to refer to the Department’s telegram No. 102 of January 18, 1945,92 relative to a scheduled increase in certain Mexican import duties as fully reported upon in this Embassy’s airgram No. 33 of January 4 and despatch No. 22,299 of January 6.93 [Page 1175] The Department, in the instruction under reply, states that the Embassy, unless it perceives some objection, is to discuss informally with the appropriate Mexican officials the possibility of undertaking preliminary exploratory conversations designed to consider the implementation of the economic objectives of Article IV of the Mutual Aid Agreement, mentioned in the Department’s instruction No. 6863 of January 12 and, at the same time, to emphasize the hope of our Government that the Mexican Government will postpone the adoption of the scheduled duty increases and of any other measures designed to impose further burdens on international commerce, at least until there has been an opportunity for consideration of the intergovernmental discussion.
As the Department has assumed in its telegram No. 102 of January 18, the Embassy has not yet discussed with the Mexican officials the postponement of the effective date of the scheduled tariff increases as reported in the Embassy’s airgram No. 33 above mentioned.
A full discussion of the Department’s telegram No. 102 of January 18, as well as of its instruction No. 6863 of January 12, has been held and the matter has been gone into from every point of view. The Counselor of the Embassy94 and the Economic Counselor95 participated in these discussions with me, for the matter has political as well as economic implications. The result of these considered discussions was that we were all in agreement that it would be unwise to ask for a postponement of the specific tariff increases in question at this time, for the following reasons.
(1) It was just about a year ago that, at the request of the Secretary of State,96 I spoke to President Avila Camacho and the Foreign Minister97 with the purpose of securing a cancellation of the proposed increase in Mexican import duties on some 600 or 700 products. Mr. Suárez, the Minister of Finance, had carefully prepared the tariff increases for the purposes of both revenue and protection to domestic industry. When President Avila Camacho instructed him, as a result of my conversations with the President and with the Foreign Minister, to cancel the decree placing the increases into effect, the Minister of Finance, Mr. Suárez, was naturally not happy, and this resulted in a certain difference of opinion between the President and the Minister of Foreign Affairs on the one side, and the Minister of Hacienda, Mr. Suárez, on the other side. The Minister of Hacienda has not forgotten the action which this Embassy and our Government took at that time, and it is quite obvious that if we approach the high officials of the Mexican Government in order to secure a postponement of these limited increases, we would be precipitating a serious situation within the Mexican Government. Although the [Page 1176] President and the Foreign Minister would be entirely understanding of our point of view, and I am inclined to think in agreement with it, even with regard to this limited number of increases, the internal situation in Mexico is such that I do not believe that the President and the Foreign Minister could insist on the postponement of these increases going into effect. One thing I am sure of, and that is that the Minister of Hacienda would practically make it a question of his resigning if he were asked to postpone the effective date of these limited increases. Because of the foregoing reasons alone, given in this paragraph (1), I am of the opinion that we cannot at this time precipitate what would be a serious internal situation in Mexico and within the Mexican Government as a result of our request for such postponement.
(2) The information given in the preceding paragraph is all the more important in view of the fact that the Embassy has studied with the greatest care the specific tariff increases reported in the Embassy’s airgram No. 33, and has found that they do not contravene any provisions of the trade agreement,98 and that the increases are justified, if there is any justification for the existence of protective tariffs. The industries given protection are producing goods in sufficient quantities to supply in a large measure the domestic market. Mexican public opinion would support the Minister of Hacienda in establishing these increases and in maintaining them, and our Government would be subjected to the most bitter attacks for having endeavored to get a postponement or annulment thereof. From the economic as well as from the political point of view we would be open to such serious attack at a most inopportune moment, and from the other despatches and letters of this Embassy, the Department will be aware of the importance in our own interest of not precipitating any such situation as that, in Mexico, for there is no doubt that any step which we might take in asking a postponement of these increases would be seized upon by enemies and even our friends here would be in a difficult position to defend us or to understand our approach. I am not going into the internal political considerations in Mexico which are of such vital importance to us at this time, and immediately preceding the conference of Foreign Ministers,99 and in a pre-presidential-election year in Mexico, as I have covered these problems in other reports and letters to the Department.
(3) Should the President or the Foreign Minister, or both, take any action towards the postponement or cancellation of the proposed tariff increases, the Embassy believes that the answer would in any event have to be in the negative because of internal considerations in Mexico and because of the powerful influences of the groups interested in obtaining this limited protection. The Minister of Hacienda, Mr. Suárez, is already bitterly complaining that the different departments of the Government are constantly requesting the Treasury for additional funds, but that at the same time they are continually resisting [Page 1177] and thwarting his proposals through which he attempts to obtain additional revenue in order to meet these requests and the requirements of the Mexican Government. In addition to this, the Ministry of Hacienda would undertake a campaign in the press in order to show the importance of these tariff increases for the maintenance of Mexican industry which is legitimate in every respect and which is not of mushroom character. I can conceive of nothing more disastrous for us than to precipitate such a situation in Mexico, for while it is well understood in Mexico that our tariff policy in recent years has changed, it is equally understood that we still maintain tariffs not only for revenue purposes but also to maintain the existence of certain industries in our country against what we consider competition which would interfere with our standard of living.
(4) If I were to take up this matter, I would have to take it up not only with the President but with the Foreign Minister, and the Department is aware that this would precipitate for the Foreign Minister an internal situation in Mexico at a time when the prestige of the Foreign Minister in Mexico as well as in the other American Republics is of the most primary importance to us. We could not possibly take the risks which are involved in such action at this time, and it would not only be a risk but an absolute certainty.
Besides this, there is no question but what the answer of the Mexican Government would have to be negative to any such approaches which I would make.
There is much that could be said on the political and economic aspects of this matter, but I will not go further into the situation at this time with respect to the particular telegram, for I believe that the information which I have previously transmitted to the Department and which is contained in confidential letters to the Department will more than be sufficient, in addition to the foregoing brief statement.
With reference to the Department’s instruction No. 6863 that the Embassy informally discuss with Mexican officials the possibility of undertaking preliminary exploratory conversations designed to consider the implementation of the economic objectives of Article VI of the Mutual Aid Agreement, I am preparing a separate despatch1 on this subject.
I am inclined to believe that this instruction No. 6863 of January 12 was prepared in the Department on the basis of our general principles, not having in mind specifically that there will take place a meeting of American States collaborating in the war effort, in Mexico City in February. As all kinds of questions of an economic character will arise during this Mexico City meeting, I think it would be particularly unfortunate for me to have to raise this question with the Mexican authorities before the meeting. I am, however, as already indicated, writing a separate despatch on this matter to the [Page 1178] Department, as there [are] some very controlling and important factors which have to be considered in connection with the Department’s instruction and the present timeliness of such conversations.
These two instructions of the Department under reference in this despatch are of primary importance as this Embassy fully realizes, but it has felt it necessary to present the situation as it must be viewed from here and from the point of view of our interests. In my despatch replying to the Department’s instruction No. 6863 of January 12, I will go into this matter even more fully.
- Not printed.↩
- Neither printed.↩
- Herbert S. Bursley.↩
- Thomas H. Lockett.↩
- Cordell Hull.↩
- Ezequiel Padilla.↩
- Reciprocal Trade Agreement, signed at Washington December 23, 1942. For documentation concerning this agreement, see Foreign Relations, 1942, vol. vi, pp. 489 ff.; for text, see Department of State Executive Agreement Series No. 311, or 57 Stat. (pt. 2) 833.↩
- The Inter-American Conference on Problems of War and Peace, held at Mexico City, February 21–March 8, 1945; for documentation, see pp. 1 ff.↩
- Despatch No. 23,055, February 11, 1945, not printed.↩