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

611.1231/1–1648

The American Ambassador in Mexico (Thurston) to the Mexican Secretary for Foreign Relations (Torres Bodet)⁸⁰

No. 1556

México, D. F., December 12, 1947.

Excellency: I have the honor to refer to Your Excellency’s note of October 6, 1947^78a and ensuing exploratory conversations with reference to the revision of the trade agreement between the United States of America and the United Mexican States, signed December 23, 1942.

The Government of the United States has recognized that the Government of Mexico must take appropriate action to achieve equilibrium in its balance of international payments, and is prepared to collaborate in meeting the problem by concurring in any further action to suspend imports of products listed in Schedule I of the trade agreement which the Government of Mexico may consider it advisable to take pursuant to Article X of that agreement. With respect to Your Excellency’s proposals to effect a change in Articles X and XI of the trade agreement, my Government is also prepared in any further revision of that Agreement, to include provisions with respect to restrictions to safeguard balance of payments similar to Article XII of the General Agreement on Tariffs and Trade signed at Geneva, October 30, 1947.

The Government of the United States has also recognized the desire of the Government of Mexico to accord increased protection to domestic industry, and I am authorized to state it is prepared to negotiate a revision of Schedule I of the existing trade agreement between our two countries immediately upon the conclusion of the United Nations Conference on Trade and Employment, now in session at Habana, on the following basis:

1. The Government of the United States will consent to the conversion of specific rates on items enumerated in Schedule I to ad valorem or compound rates at 1942 levels, subject to points 3 and 4 below. It is understood that in such compound rates the specific element will be given approximately one-third weight and the ad valorem element approximately two-thirds weight.

2. The Government of the United States will consider proposals of the Government of Mexico for increases in rates of duty on Schedule I items above the restored 1942 levels, wherever necessary to provide reasonable and adequate protection for sound Mexican industries.

3. The Government of Mexico will consider a selected list of items within Schedule I to be submitted by the Government of the United States proposing the binding of present rates of duty or reductions from the restored 1942 rates or present rates of duty.

4. The Government of Mexico will consider a list of items not now included in Schedule I to be submitted by the Government of the United States for inclusion in the renegotiated Schedule I at the rates stipulated in the recently revised Mexican Customs Tariff, or decreases therefrom.

5. All adjustments in Schedule I will be negotiated in terms of the merits of each specific item, so that the resulting agreement, taken as a whole, will be equally advantageous and mutually satisfactory to both countries.

6. The revised rates of renegotiated Schedule I would be accepted by the Government of the United States as a proper basis for any more extensive future renegotiation of the trade agreement, either bilaterally or within the framework of a multilateral agreement. The Government of the United States would be prepared to support the propriety of this basis with other Parties to the General Agreement on Tariffs and Trade, signed at Geneva, October 30, 1947.

With reference to Annexes IV and V of Your Excellency’s note of October 6, 1947, for reasons which have already been made known to Your Excellency my Government is not in a position to consider reductions in duty or additions to Schedules II and III of the trade agreement immediately after the conclusion of the United Nations Conference on Trade and Employment. It is understood, however, that in any more extensive future renegotiations, referred to in point 6, the Government of the United States will consider proposals for reductions in duty on items enumerated in Schedules II and III, and additions to those Schedules.

In view of the circumstances which have led Your Excellency’s Government to conclude that the conversion of present Schedule I rates to 1942 ad valorem equivalents is immediately necessary, my Government consents to the immediate provisional conversion of the specific rates enumerated in Schedule I in accordance with point 1 above and with the understanding that the Government of Mexico is in agreement with the objectives of and procedures for the more definitive revision of Schedule I in accordance with points 1 through 6. In agreeing to the provisional increase of rates of duties on items now within Schedule I, pending a more definitive revision, my Government would expect that such increases in duty would not be effective until five days after publication of the decree imposing such increases. It is understood that the Government of Mexico will, moreover, permit entry at the present rates of duty for all shipments actually en route from points within the United States to Mexico on the date of the publication.

I should be happy to have Your Excellency’s confirmation of my understanding of this agreement.⁸²

I avail myself [etc.]

Walter Thurston

80. Copy transmitted to the Department in despatch 101, January 16, 1948, from Mexico City (not printed).
81. Not printed.
82. Note No. 2243, December 12, 1947, from the Mexican Secretary for Foreign Relations (Torres Bodet), not printed. For a press release issued by the Department December 13, 1947, concerning the provisional agreement embodied in the December 12 exchange of notes with Mexico modifying trade agreement, see Department of State Bulletin, December 21, 1947, p. 1219. For a press release of December 31, 1947, concerning the formal notice of intention to conduct negotiations for the revision of Schedule I of the trade agreement between the United States and Mexico, see ibid., January 11, 1948, p. 59.