Foreign Relations of the United States, 1947, The American Republics, Volume VIII

837.61351/3–2947

Memorandum by the Director of the Office of American Republic Affairs (Briggs)¹⁵

confidential

[ Washington ,] March 29, 1947.

Cuba: Recommendation Regarding Proposed Treaty of Friendship and Establishment, and Regarding Annual Allocation of Sugar Quota

Recommendation: That the following two provisions be included in the next basic United States sugar legislation:

1) That any increase over the prevailing 28% which our Congress may grant as the Cuban share of the United States domestic sugar market be made contingent upon the acceptance by Cuba of a satisfactory treaty of friendship and establishment.

2) That in connection with the annual allocation of the Cuban quota, a provision be included specifying that such allocation shall not take effect until the Secretary of Agriculture is satisfied that the distribution of the Cuban share of the U.S. quota has been made in a fair and equitable manner.

Discussion:

1) The number one problem in Cuba is government corruption, and the secondary problem is the subservience of the Cuban Government to the local Communist Party, whose objective is the liquidation of American interests. Both problems bear heavily on American enterprises in Cuba, which total approximately $750,000,000.

It is clear from the record that relations with Cuba to be even relatively satisfactory must be based on “strength and justice” on our part, and that in the absence of some effective continuing leverage American interests cannot count on protection by the Cuban Government. Our Government has tried at various times all forms of presentation in defense of American interests and our arguments (in the absence of leverage) have generally been met with indifference, or even derision.

Continuing protection for American interests in general would be afforded by the proposed treaty of friendship and establishment,¹⁶ but there is scant prospect that Cuba will accept such a treaty unless we make some benefit ardently desired by Cuba and within our power to bestow or withhold, contingent upon Cuba’s agreeing to the treaty. An increase in the Cuban share in the U.S. sugar market constitutes such a benefit.^*

2) The second provision is designed specifically to protect American sugar interests from discrimination. Although those interests have not fared badly during the period since Pearl Harbor merely because all sugar producers have prospered and because there has been no important conflict of interest between Cuban and American producers, this situation will shortly change. American mills are generally large low-cost producers and they are greatly outnumbered by Cuban mills many of which are small high-cost producers. When the time comes for contraction of Cuban sugar production, the temptation—politically and historically—will be for this reduction to be disproportionately at the expense of the foreign (i.e. American) producers. Experience gives no basis for anticipating that the Cuban Government, if left to its own devices, would adopt a quota allocation system even remotely fair to American producers. Our experience with Decree Law 522 adopted in 1935 and maintained thereafter in circumstances of mounting insecurity illustrates this point.

To protect U.S. sugar producers there should be inserted in American sugar legislation a provision in general terms that the Secretary of Agriculture before making each year the global allocation of quota to Cuba shall have satisfied himself that the distribution of quota in Cuba has been fair and equitable. The inclusion of such a provision would give our Government the necessary leverage in dealing with the Cuban Government, and our Habana Embassy could see to it each year that a “fair and equitable” allocation had in fact been made. (An alternative suggestion that distribution of the Cuban quota destined for the U.S. be made by the U.S.—or that the same end be obtained through the establishment of an import permit system—is not practical. It would expose us to criticism for intervening in Cuban domestic affairs, and it would place a complicated additional administrative burden on the U.S.)

Should these two provisions be included in permanent U.S. legislation the way would be paved for the establishment of genuinely good relations with Cuba based on respect by Cuba for American rights, as well as on the respect which the United States has traditionally shown for Cuban rights.

Ellis O. Briggs

15. Addressed to Messrs. Braden, Wright, and Smith, A–Br; Messrs. Woodward and Nufer, ARA; Mr. Turkel, CP; Mr. Thorp, A–T; and Mr. Walker, CRB.
16. The Ambassador in Cuba reported in despatch 2790, February 13, 1947, that a draft of the proposed Treaty of Friendship, Commerce and Navigation had been presented to the Cuban Minister of State under cover of the Embassy’s memorandum of January 27, 1947 (711.372/2–1347). As of December 31, 1947, no reply to the memorandum of January 27 had been received (711.372/12–3147).
17. The possibility is not overlooked of using a reduction in the sugar duty, contemplated in the ITO negotiations, as the quid pro quo; should the treaty be obtained in those negotiations it would of course not be necessary to handle the matter as suggested herein. [Footnote in the original.]