611.2331/10–1049
The Secretary of State to the Peruvian Ambassador ( Berckemeyer )
Excellency: I have the honor to refer again to Your Excellency’s note of October 10, 1949,1 requesting that the United States Government undertake negotiations directed toward the revision of the trade agreement in force between our respective Governments since 1942.
It is not clear whether the Peruvian Government intends that the proposed negotiations be conducted independently of the General Agreement on Tariffs and Trade or within the compass of that multilateral accord. As the Peruvian Government has been informed on various occasions, it is the general practice of the United States Government to negotiate new, or renegotiate existing, bilateral trade agreements only in conjunction with the accession of the other Government or Governments concerned to the GATT. In the circumstances, the United States Government cannot undertake to renegotiate at this time the existing bilateral trade agreement.
On the other hand, my Government would prefer, if possible, to avoid termination at present of the existing trade agreement and would hope instead that some mutually acceptable basis could be found for continuing that instrument in force pending Peru’s accession to the GATT. In this connection, it is pleased to note that Peru intends to adhere to the general principles contained in the General Agreement on Tariffs and Trade and expects to participate in the next session of GATT tariff negotiations opening September 28, 1950. My [Page 771] Government, therefore, submits for the consideration of the Peruvian Government the following proposal which, it is believed, would fully satisfy the objectives underlying the proposal advanced by the Peruvian Government and, at the same time, would be in accord with the position of my Government set forth above:
It is proposed that discussions between representatives of our two Governments be initiated as soon as possible to determine whether a satisfactory basis can be found for the United States Government to grant a waiver of relevant provisions of the trade agreement which would permit the Peruvian Government to apply revised rates of duty to the products listed in Schedule I in accordance with some mutually acceptable formula taking account of the effect of price changes in Peru on the incidence of the rates of duty specified in Schedule I, and which would permit the continuation in force of the agreement pending Peru’s accession to the GATT.
If the foregoing proposal meets with the approval of the Peruvian Government, it is suggested that the discussions be initiated at an early date in order that it may be determined whether a mutually satisfactory basis may be reached for adjustment of the Schedule I rates of duty which would make it possible for Peru and the United States to enter into more comprehensive negotiations at the forthcoming third set of GATT tariff negotiations. In this connection, attention is called to the timetable of preparations for the third set of GATT tariff negotiations which is set forth in document GATT/CP/36, September 30, 1949. It is understood that a copy of this document was sent to the Peruvian Government by Mr. Eric Wyndham White, Executive Secretary of the Interim Commission for the International Trade Organization. Because of this timetable and also of the domestic procedures under the Trade Agreements Act of public notice and hearings which must be carried out prior to the United States entering into tariff negotiations at the third round, it is important that a decision be reached at an early date whether our two Governments would enter into tariff negotiations at the third round. Consequently, my Government would hope that the discussions proposed above might be concluded no later than the early part of January, 1950. If no agreement should be reached by such time, our two Governments could then consider the question of joint termination of the trade agreement.2
Accept [etc.]