611.1231/10–347
The Secretary of State to the Embassy in Mexico
No. 1530
The Secretary of State refers to the Embassy’s telegram No. 1089 of October 8, 1947,76 reporting the receipt of a note from the Foreign Minister adverting to the conversation of October 1 between Mr. [Page 782] Armour and the Chargé d’Affaires of the Mexican Embassy,77 and proposing that the exploratory trade-agreement conversations, discussed at that time, be undertaken on October 20. Reference is also made to despatch No. 4767 of October 978 transmitting a translation of the note and its annexes, together with the Embassy’s analysis of the Mexican proposals.
The following statement with respect to the projected conversation is made in order that this Government’s position may be clear to the Embassy, and explained by the Embassy to the Mexican Government.
The Officer in Charge is of course aware of the reluctance with which the exploratory conversations were agreed to, in view of the full preoccupation of this Government’s interdepartmental trade-agreements organization since the closing months of 1946 with matters relating to the establishment of an International Trade Organization and the negotiation of a General Trade Agreement. In that connection reference is made to instruction No. 879 of March 4, 1947, in which this Government’s program for the ITO Charter and General Trade Agreement work at Geneva was outlined, its policy with respect to trade-agreement negotiations thereafter suggested, and authorization given officers at the Embassy to convey the information to Mexican officials and discuss it with them in any manner considered appropriate. The statement was made in that instruction that United States trade-agreement negotiations in the post-Geneva period would be integrated within the framework provided by the Charter and would follow procedures established for that purpose, such a course of action being implicit in this Government’s adherence to the principles of the Charter. It was also stated that no commitment could then be made as to whether negotiations with Mexico pursuant to the principles and procedures adopted at Geneva could be undertaken prior to the United Nations International Conference on Trade and Employment (subsequently scheduled to convene on November 21 at Habana, Cuba), concurrently with it, or following its conclusion.
There has been no lessening in the intervening months of this Government’s intention to negotiate future trade agreements within the framework of the ITO Charter. It is of course the strong hope of the United States that the Government of Mexico will participate in the International Trade Conference at Habana and become a member of the International Trade Organization to be established there. Membership in the ITO entails “negotiations directed to the substantial reduction of tariffs and other charges on imports” (Article 17, Geneva Draft of the Charter).
Pending the conclusion of the Habana Conference and the determination [Page 783] of procedures for negotiating with countries which have not yet entered into the General Trade Agreement concluded at Geneva, the United States is not ready to enter into new trade-agreement negotiations with Mexico or any other country. In that connection, attention is directed to Article XXXIII of the General Trade Agreement a copy of which was forwarded to the Embassy by airmail on October 17. The Article provides in effect that future trade-agreement negotiations between governments which are not parties to the Agreement will not be conducted bilaterally, but on terms agreed upon between each non-contracting party and all contracting parties. It is believed probable that this Article will be approved in substantially its present form.
In view of the repeated and urgent requests of the Mexican Government for trade-agreement discussions, the United States agreed to the holding of exploratory conversations with a view to discussing informally, in the light of the draft Charter of the projected International Trade Organization, changes which the Mexican Government may wish to have made in the existing trade agreement, and to ascertain whether there appear to be promising bases for holding in due course the negotiations envisaged in Article 17 of the Charter. However, it must be reiterated, as it was stated to the Mexican Chargé d’Affaires, that the agreement to enter into exploratory discussions is not a commitment to negotiate. Should promising bases for an agreement be found to exist, this Government will undertake formal negotiations as soon after the conclusion of the Habana Conference as it is able to do so. However, the timing of the negotiations must necessarily depend upon the views of the other governments which are parties to the General Agreement as well as upon the situation in the United States. In so far as the United States is concerned, negotiations will of course be undertaken pursuant to established trade-agreement procedure, involving public announcement and hearings.
Reference is made to paragraphs (2) and (3) of the Foreign Minister’s note of October 6 expressing the hope, that the period between the completion of the exploratory conversations and the negotiation, under established United States procedure, of a revision of the existing agreement may be as brief as possible. There appears to be an implication in those paragraphs that the Mexican Government expects the exploratory conversations to lead to an agreement which subsequent formal negotiations will have the effect of formalizing. The Department desires to emphasize that the exploratory conversations must be general and informal, and must in no sense take on the character of negotiations such as may be undertaken by this Government only after the customary trade-agreement procedures of public announcement and hearings have been followed. Any other course would be [Page 784] contrary to the law and regulations governing the operation of the trade-agreements program.
The Mexican officials should be informed of the limited character of the exploratory conversations, and that this Government considers an understanding of the following basic formulae to be essential to the successful outcome of any negotiations which may be undertaken eventually by the two Governments. Such an understanding should precede any study of the Mexican proposals set forth in the October 6 note.78a
- 1.
- In its future trade-agreement negotiations, the United States Government will adhere to the principles and procedures of the ITO Charter relating to the reduction of tariffs and other trade barriers and the elimination of discriminatory treatment in international trade. It will therefore not consider the negotiation of a trade agreement which is inconsistent with any of the provisions or objectives of the Charter as approved at Habana. Pending conclusion of the Habana Conference this Government will be guided by the Charter in the form in which it was approved at Geneva.
- 2.
- The United States is willing to consider requests for increases in Schedule I products to the extent needed for the reasonable protection of sound economic industries as contemplated in Articles 8 and 13 of the Geneva Draft Charter. It is likewise prepared to entertain Mexican requests for further concessions in Schedules II and III. However, the final agreement must be equally advantageous to both parties.
- The Department appreciates the valiant efforts which have been made by officers of the Embassy to maintain the integrity of the trade agreement and to minimize the effects on United States trade of Mexican import restrictions,79 and recognizes that the foregoing statement of this Government’s position as to timing of formal negotiations may cause some difficulty from the Embassy’s point of view in carrying on the exploratory conversations. The fact remains that this is the only position which can be taken at the present time.