Memorandum of Conversation, by Mr. Albert H. Gerberich of the Division of North and West Coast Affairs

  • Subject: Discussion of Colombian Trade Agreement
  • Violation and Colombian Accession to GATT
Participants: Woodbury Willoughby
NWC—Sheldon T. Mills
NWC—Albert H. Gerberich
José Camacho Lorenzana,
Counsellor of Colombian Embassy
Alfonso Araujo,
Colombian Economic Mission
José Ma. Gutiérrez Gomez,
Colombian Economic Mission
Jorge Mejía Palacio,
Chargé of Colombia in Sweden

Mr. Willoughby opened the meeting by informing the Colombians that the Trade Agreement Committee had met yesterday and had [Page 461] taken up their request for assistance in meeting pressing revenue problems. He said that as a result of this meeting he is authorized to suggest to them either of two alternative solutions:

If Colombia desires to undertake negotiations to enter GATT in April we shall temporarily withdraw our objections to the present exchange taxes, while reserving all rights under the Trade Agreement.
If Colombia feels it cannot enter GATT next spring, and cannot meet its revenue necessities through the medium of internal taxes, we shall not protest the proposed substitution for the exchange taxes of a stamp tax of up to 12%, which it is felt will be adequate for Colombia’s needs. It is understood that we would reserve all rights and our refraining from insisting on T.A. compliance is temporary, pending Colombian accession to GATT in 1950.

Mr. Gutierrez asked whether, if Colombia is not prepared to meet the time schedule and enter GATT next April and elects to follow the second proposal, the US Government is prepared to begin negotiations on a revision of Schedule I of the Trade Agreement.

Mr. Willoughby replied that it is our general policy now not to negotiate bilateral trade agreements or modifications of such agreements, but to negotiate tariff arrangements within the framework of GATT. Also what the US might think regarding certain tariff schedules might not be shared by other members. For these reasons it will not be possible for us to renegotiate our bilateral trade agreement with Colombia. On the other hand, if Colombia decides to participate in the trade negotiations next spring, it would be possible in the interim between the submission of our definitive request list, January 15, as required under the GATT timetable, and the opening of the Geneva negotiations on April 11, to arrange for preliminary discussions of the concessions to be granted by Colombia to the United States.

Mr. Willoughby observed that the memorandum concerning the tariff negotiations commencing at Geneva April 11, 1949 takes cognizance of those cases where a country wishes to change its tariff schedules before applying for admission to GATT. (Document GATT/CP.2/26, paragraph III 2 and 3, pages 3 and 4). However, if a country on the eve of applying for membership in GATT imposes high tariffs for bargaining purposes inconsistent with the principles of the Habana Charter, such action would frustrate the whole purpose of the agreement.

Mr. Araujo explained that it will be necessary to get the approval of the Colombian Congress to a new tariff schedule at the present session. There are 900 items in all in the tariff, but 163 are bound in the Trade Agreement with the US. The Colombians want to study these 163 items with the US beforehand and reach an agreement before proposing to the Congress the duties on them under the proposed new tariff schedule.

[Page 462]

Mr. Mills said it appeared the Colombians were asking that the US, after discussions, indicate that when negotiations are finally formally undertaken we shall agree to certain duties on the 163 items. In other words, Colombia asks that we negotiate a revision of the duties on Schedule I items which would not be applied, however, until Colombia enters GATT. He said that although it might be relatively simple for us to make certain concessions during the Geneva negotiations, it might be most difficult to make these outside the framework of GATT negotiations. He also pointed out that if we do not negotiate in April it may be too late, since the new Congress will determine what authority the Department is to have after June 30, 1949, when the present Trade Agreement Act expires.

Mr. Gutiérrez said he would communicate these facts to his Government today and inform us promptly regarding the reply.

Mr. Mills added that our acceptance of the 12% stamp tax must be considered a temporary measure to continue during the interval until we can negotiate a final solution at the time Colombia enters GATT, and we assume Colombia will join GATT as soon as it becomes possible for her to do so, which he understands will be not later than 1950. He asked if Messrs. Araujo and Gutierrez think that one or other of the two solutions will be acceptable to their Government.

Mr. Araujo replied that he could not say, as they had come up here on quite another mission. He would have to discuss the whole question first with Ambassador Restrepo, then by cable with his Foreign Office.

Mr. Mills asked what plans Messrs. Araujo and Gutiérrez have for returning to Bogotá. Mr. Araujo said they have finished the discussions with the International Bank and had a meeting with the Export-Import Bank yesterday regarding the $50,000,000 loan application. They had planned to return to Bogotá next Saturday but have cancelled their reservations. Mr. Mills said he had intended to suggest that they remain here a little longer, as things seem to be moving more rapidly now and it would be to their advantage to follow developments closely.

Mr. Willoughby then said that there is still one more problem we would like to take up, namely, a basic commercial treaty. Assuming that accord is reached in the Trade Agreement matter, we are ready to proceed with discussions on a new treaty of Friendship, Commerce and Navigation, and probably can have a draft ready for the Colombians by next Wednesday. If after studying the draft they could have discussions with officers of the Department it might provide useful background on our thinking which they could pass on to their Government when they return to Bogotá.

[Page 463]

Mr. Camacho asked if a Spanish text of the draft treaty will be available. Mr. Mills replied that such a text will not be immediately available, as our Translating Division is swamped with work. He explained that we have been thinking of the new draft as a substitute for the outmoded Treaty of 1846,1 and mentioned some of the features of the latter that appear to be outdated.

It was agreed that we shall invite the Colombians to come in again next week and give them the text of the proposed treaty for study.2

After the Colombians had left it was decided that Ambassador Beaulac should be informed by telegram at once of the proposals made to the Colombians.

  1. Treaty of peace, amity, navigation and commerce between the United States and the Republic of New Granada, signed at Bogotá, December 12, 1846 (Department of State Treaty Series No. 54, or 9 Stat. 881).
  2. The Department’s instruction 177 of October 16, 1948 transmitted copies of the draft treaty of friendship, commerce and navigation to the Embassy in Colombia and stated that a copy of the draft treaty had been presented to the Colombian Embassy on October 14 to serve as a basis for negotiations between the Governments of the United States and Colombia (711.212/9–248). A copy of the draft treaty was delivered to Eduardo Guzman Esponda, the Secretary-General of the Foreign Office, on November 4, according to despatch 662, of that date from Bogotá (711.212/11–448).