Memorandum of Conversation, by Mrs. Amelia H. Hood of the Office of Middle American Affairs


Subject: Cuban-United States Rice Discussions

Participants: Dr. Zaglits1—Agriculture
Mr. Skartvedt2—Commerce
Mr. Corse,3 CP—State
Mr. Phelps,4 CP—State
Mrs. Hood, MID—State

A meeting was held in the Department of State, at which the persons listed above were present, to determine what reply should be made to telegram no. 33 of July 16, 19515 from our Embassy at Habana. The telegram stated that present indications were that the discussions with regard to rice would be delayed by the Cubans until the Cuban position in the United States sugar legislation could be determined. The Embassy therefore suggested that, if by July 20 the Cubans had not reached a decision with regard to their position in the rice matter and resumed discussions, they be told that the negotiations were terminated and that the United States intended to bring before the Contracting Parties at the Sixth Session of GATT in September the matter of the Cuban contravention of the provisions of the rice note in the Cuban Schedule of GATT.

Dr. Zaglits said that in the opinion of Agriculture, now was not an opportune time to press for resumption of the negotiations. He said that some of the Cuban sugar people, including Dr. Mañas, had seen Senator Ellender some time ago. Senator Ellender told them that rice and sugar had to be kept separate, but that if Cuba did not live up to her commitments on rice, she might get a sugar Act much less favorable to Cuba than the proposed legislation. Dr. Zaglits said Agriculture felt it should be made plain to the Cubans that we did not intend to pay Cuba for living up to concessions granted us at Geneva.

Dr. Zaglits said further that the rice matter could be settled without requiring a re-write of the rice note in the Cuban Schedule of GATT. He felt that one way to settle the matter would be for the Cuban Government (1) to accept in writing one interpretation of the note, namely that it provides for a realistic quota and (2) to agree to an understanding that Cuba would retain the margin of preference on both quota and over-quota rice at the level in effect at the time of the [Page 1355] Geneva negotiations. If this clarification and understanding were obtained, we would not complain about the unilateral change by Cuba from January to July for the announcement of the preliminary quota. However, if possible we should get the Cubans to change the announcement of the preliminary quota from July 1 to April 1. Dr. Zaglits continued that he could appreciate the difficulties which Cuba would have in announcing a quota on January 1 since that was about the time the Cuban rice begins to be marketed. In the case of July 1, there would also be difficulty because if a large initial quota were announced, the quota would not be filled by the time the Cuban crop was ready for the market. Therefore, April 1 would be the best date. It would enable the United States rice to be moved off the Cuban market by the time the Cuban rice is ready.

Dr. Zaglits said he considered this alternative of no change in the rice note, together with the clarification and understanding, would be preferable to a change in the note which would involve the spelling out of an increased quota and an unbinding of the over-quota rates such as had been proposed. He said he understood that Dr. Guerra and the Cuban Ministry of Finance were in favor of this alternative plan since the latter was afraid that increasing the over-quota rates would make rice much more expensive for the Cuban consumer.

Mr. Corse agreed that we do not want to “pressure” the Cubans to finish the rice negotiations and said he felt we should be ready to accept either (1) the alternative plan outlined by Dr. Zaglits or (2) what has already been proposed, that is, a new note in the Cuban Schedule which would set a quota of 5,500,000 quintals with the over-quota rates unbound, even if the latter plan meant that discussions went beyond the deadline for the completion of the Article XXVIII negotiations. He suggested that Mrs. Hood consult Mr. Hollis6 (L/E) as to what the final deadline actually is. If there was not time to complete the discussions as Article XXVIII negotiations, then some other way could be found for getting any necessary approval of the Contracting Parties, for example as in the “potato case”. All present agreed with Mr. Corse’s suggestion that either alternative would be acceptable.

Mrs. Hood remarked that she had noticed in a cable7 that went out to the Embassy that the 5,500,000 quintal figure was referred to as a United States quota. She asked whether that meant that it would be an allocated quota for the United States or was it really meant to be a global quota in which any country could share. Dr. Zaglits replied that it was intended as a global quota.

It was agreed by all present that the matter of the Cuban contravention of the terms of the rice note should not be brought before [Page 1356] the Contracting Parties because while there had been contravention in the past, there might not be during this quota year since Cuba had already announced for 1951–52 a combined basic and preliminary supplementary quota of 4,500,000 quintals and had promised to announce another supplementary quota in November or December.8

It was also agreed (1) that a telegram9 should be sent asking the Embassy not to suggest to the Cubans any deadline for the termination of the rice negotiations and giving the Embassy the reason why the matter should not be brought before the Contracting Parties at this time; and (2) that an airgram or instruction10 should be sent the Embassy outlining the present thinking on the rice situation as expressed in the meeting.11

  1. Oscar Zaglits, Head of the Foreign Agricultural Trade and Policies Division, Office of Foreign Agricultural Relations.
  2. Enoch Skartvedt, Office of International Trade.
  3. Carl D. Corse, Chief, Commercial Policy Staff.
  4. Vernon L. Phelps, Assistant Chief, Commercial Policy Staff.
  5. Not printed (400.379/7–1651).
  6. Walter Hollis, Office of the Assistant Legal Adviser for Economic Affairs.
  7. Reference uncertain.
  8. No additional supplementary rice quota was announced by the Cuban Government in 1951.
  9. Telegram 58, to Habana, July 19, 1951 (400.379/7–1651).
  10. Sent as Instruction No. 20, to the Embassy in Habana, August 10, 1951 (400.379/7–1651).
  11. There is no indication in the Department of State files that the suspended rice negotiations between the United States and Cuba were resumed during the remaining months of 1951.