Foreign Relations of the United States, 1946, The American Republics, Volume XI

711.1227/7–2946

The Ambassador in Mexico (Thurston) to the Secretary of State

confidential
No. 593

Mexico, D.F., July 29, 1946.
[Received August 1.]

Sir: I have the honor to inform the Department that at the meeting held by the United States and Mexican delegations to the Bilateral Route Negotiations on July 25, it was agreed that no further purpose would be served through continuing the negotiations and, hence, these were suspended by mutual consent. The remaining members of the United States delegation left by plane for Washington on July 25.

The negotiations, which started on June 24, give cause for reflection, and the Department will wish to study the lessons to be drawn from them in order to avoid, in so far as possible, the pitfalls which may be encountered in connection with similar discussions to be held with other Latin American countries.

Shortly after the beginning of the negotiations, it became increasingly apparent that the Mexican delegation felt that the United States delegation had not come to Mexico to negotiate, but to implement the decisions previously arrived at by the Civil Aeronautics Board. This impression was not caused by any lack of tact on the part of the United States representatives, but arose from the unfortunate necessity for the CAB publicly to announce its decision in the Latin American case prior to the negotiations with Mexico.

I am fully cognizant of the reasons for the announcement of the decision, but the Department will wish to consider ways and means of preventing this type of obstacle from affecting future negotiations in Mexico and elsewhere in Latin America. Had it been possible to inform the Mexican Government of the decision before it was given publicity in the United States and to explain the necessity of this procedure under our legislation, we could perhaps have avoided the feeling of imposition which the Mexican delegation so patently resented. However that may be, it was clear during the week ending July 6 that the negotiations were getting nowhere. In view of the approaching stalemate, I instructed the Economic Counselor³¹ to discuss the matter separately and informally with the heads of both delegations. A better atmosphere resulting, negotiations progressed and by July 17 there was every indication that a satisfactory agreement was in prospect. True, the Mexicans were adamant with respect to Route 1 (San Antonio and Laredo to Monterrey and Mexico City)³² but all other United States routes had been accepted in principle. Mexican opposition to the Braniff route was twofold: first, the fear that no Mexican line could operate in competition with American and Braniff in the same territory and, second, a deep prejudice against the business methods of Mr. Thomas E. Braniff. The Embassy is not, at the present time, in a position to express an opinion as to the merits of the second objection. The Mexicans, however, did not entirely close the door to the Braniff route and were agreeable to discussing an alternative entry within six months during which time the conduct of Mr. Braniff would be observed.

It was not until July 18 that the question of the division of traffic became serious. Although frequencies and capacities had casually been mentioned previously, the United States delegation had no inkling that the Mexican position would be as adamant and unyielding as later developed. In fact, one of the Mexican delegates, General Salinas Carranza, expressed his surprise at the injection of these questions into the discussions and stated privately that the Foreign Office was responsible for the position adopted by his delegation. Whether or not the Mexican delegation had been determined to stand on the right to a juridical division of traffic from the start is a debatable point, but once the question was injected, it found almost unanimous support, both on the part of the Mexican delegation and the Mexican Government itself.

As soon as it was clear that the delegations had reached a complete stalemate, I felt the time had arrived to make a final plea to the President.³³ I had purposely avoided injecting myself into the negotiations until such time as the issues were clear-cut and I felt that I could appropriately act. The interview which I had with the President was fully reported upon in despatch no. 52 of July 20, 1946, entitled “Transmitting Memorandum Presented to President Avila Camacho with Regard to Deadlock in Bilateral Route Negotiations.”³⁴ (For convenience, a copy of the memorandum which I left with him is included as Enclosure No. 1.³⁵) The President’s reply, made through the Foreign Office, will be found in Enclosure Nos. 2 and 3.³⁶

In view of the tenor of the President’s reply, I discussed the situation with the United States delegation and it was agreed that no purpose would be served by further discussions at the present time. Hence, a final meeting was arranged for the morning of July 25 with the Mexican delegation, after which the United States delegation issued the press statement which forms Enclosure no. 4 to this despatch.³⁷ The Chief of the Mexican delegation³⁸ requested the Economic Counselor to call before the final session and it was agreed that at the meeting mutual expressions of regret would be voiced but that every effort would be made to prevent any controversial matters from arising. This in order that the Embassy and the Mexican authorities might continue discussions to see if the groundwork could be laid for a satisfactory agreement being reached in the near future. The statement issued by the Mexicans and published in the press of July 28 will be found in Enclosures nos. 5 and 6.³⁹ It will be noted that the Mexican statement, while clearly expressing the delegation’s position, seeks to avoid acrimonious controversy, the same objectives which were kept in mind in drafting the statement issued by the United States delegation.

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

In reviewing the negotiations, I am particularly struck by the need for evolving some method for preventing the wounding of Latin American sensibilities by prior decisions of the Civil Aeronautics Board in cases involving routes which are to be the subject of later negotiations with them. The Mexican reaction, while finally removed as a major obstacle, was never completely allayed as an irritant. Also, I do not believe that the Department should give too much weight to the question of routes in the failure of the negotiations. I am convinced that a satisfactory route pattern could have been worked out. The basic cause of the failure of the negotiations is to be found in the Mexican demand for juridical division of traffic.

… There could be no question that in the discussions regarding routes there was an undertone of individual interests at play, but the Embassy is fully convinced that the Chief of the Mexican delegation is completely sincere in his position that Mexico should have the juridical right to an equal division of traffic. The Economic Counselor has already pointed out to Señor Rebolledo that the position assumed by his delegation and his Government would appear to be contrary to the best interests of Mexico and that however logical the right to a division of traffic may appear on the surface, it is fundamentally unsound and uneconomic. The Chief of the Mexican delegation has expressed the definite desire that the Embassy present to him and the Minister of Communications⁴⁰ the reasons which lead us to believe that a juridical division of traffic would be against the best interests of this country. He stated, and we believe him to be entirely sincere in this respect, that if we could show him that he was wrong, he would assist rather than obstruct the reaching of an agreement. He re-emphasized the desire of his Government to reach an understanding with our own and expressed keen regret that the negotiations had failed.

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

… I am inclined to believe that the wisest policy would be to continue conversations. In order to do this it would be necessary for the Embassy to be supplied with authoritative data showing:

[Here follows list of subjects on which information was requested.]

Respectfully,

Walter Thurston

[In despatch 1409, October 7, 1946, Ambassador Thurston recommended that prior to undertaking to reopen formal negotiations a series of preliminary informal conversations should be held by Embassy officers with the interested Mexican Government officials in order to explore the various points of issue and to promote a fuller understanding by the Mexican representatives. Anticipating the commercial air policy of new presidential administration which was to take office on December 1, Ambassador Thurston noted:

“Whatever may be the composition of the new Ministries of Communications and of Foreign Relations, any radical and precipitate change in their points of view is not to be expected. The restrictions proposed at the conferences in July and August were a clear expression of the nationalism and protectionism which are the backbone of present Mexican economic policy, and no more than a very moderate swing away from these principles can reasonably be anticipated. Furthermore, it is clear that Mexico will not recede from the position taken by its delegation through any such idealistic considerations as the increased freedom of trade and communications or the ultimate benefit to the world economy of more liberal air transport policies. The only telling arguments will be those based on a conclusive factual showing that such a policy will be of concrete and immediate benefit to Mexican economy.” (711.1227/10–746)]

31. Robert W. Bradbury, Senior Economic Analyst.
32. United States route No. 1, from San Antonio and Laredo to Monterrey and Mexico City, which the Civil Aeronautics Board had awarded to Braniff Airways, was firmly opposed by the Mexican delegation.
33. Manuel Avila Camacho.
34. Not printed.
35. Not printed; with respect to the question of limitations on traffic and services, that is, the Mexican proposal that traffic on any new route between the two countries should be divided equally between the respective Mexican and American airlines operating on such routes, each carrying one-half of the traffic, Ambassador Thurston noted in his memorandum to President Avila Camacho: “It is the view of my Government that there should be equal opportunity under international agreements for airlines to develop and attract the potential volume of air traffic, but it sincerely believes that any arbitrary division of traffic and capacity would seriously retard the expansion and consequent benefits of air transportation.”
36. Neither the Spanish text nor the translation printed. According to this memorandum, the pattern of air routes involved considerable advantages for the United States even though, because of numerical parity, it appeared to provide complete reciprocity. Under the original proposal, for example, three routes traversing Mexican territory would be granted the United States, while Mexico would obtain only one route across the United States (no. 6, Mexico City, San Antonio and Detroit to Canada). With respect to “limitations of air traffic and services” in the Ambassador’s memorandum, the Mexican reply stressed that equality of opportunity could not exist when, given disproportion in existing resources, the weaker party was deprived of adequate protection, and maintained the right of Mexican civil aviation to collaborate with its resources of that time in the future development of air traffic between the two countries.
37. Not printed.
38. Juan Rebolledo Clement, Assistant Minister of Communications.
39. Neither printed.
40. Pedro Martinez Tornel.