411.3331/4–2753: Telegram

The Secretary of State to the Embassy in Uruguay 1


191. For Ambassador from Mann. Executive Depts testifying near future before Congressional Committees on customs simplification and extension trade agreements program. President has asked for simple one year extension trade agreements program. Simpson Bill now pending Congressional action would, however, while continuing trade [Page 1559] agreements act, impose numerous restrictions. It also includes provision looking toward application countervailing duties in multiple rate cases.

Considered opinion here that in absence definitive action on tops by Uruguay or US, it most likely that Congress will enact mandatory countervailing duties provision covering wool tops and many other products. Also, chances of obtaining Congressional approval provision requiring showing domestic injury as condition imposition countervailing duties which Executive is recommending will be greatly impaired.

Accordingly, unless other action taken by Uruguay as suggested below, Sec Treas plans announce on May 2 existence of bounty connection export Uruguayan wool tops and application of appropriate countervailing duty.

You instructed discuss foregoing urgently with Yriart with view ascertaining whether Uruguayan govt prepared act prior to May 2 to reduce rate on tops to rate applicable raw wool and to agree with us to keep it there. Such agreement would probably forestall imposition countervailing duties on other Uruguayan products as well as wool tops. You should make following points:

Dept appreciates suggested course would raise serious problems for Uruguay.
Dept believes, however, that action by US would have considerably worse effects. Should Treasury proceed take action on wool tops under existing legislation principles might be involved which could have effect of extending countervailing duties to other Uruguayan products. Mandatory provision placed in law on Congressional initiative likely have even wider application.
Failure on part Uruguay or ourselves act on tops also likely jeopardize customs simplification bill and interfere with efforts obtain simple extension trade agreements program.
In order for advantages be obtained Uruguayan action, as contrasted disadvantages US action, necessary Uruguay act not later than May 1.

Please telegraph results conversation.2

  1. Drafted by Acting Deputy Assistant Secretary of State for Economic Affairs Leddy and Mr. Cale; approved for transmission by Mr. Leddy. Cleared in draft by Assistant Secretary of State for Economic Affairs Linder, Deputy Assistant Secretary Mann; Director of the Office of South American Affairs Atwood, and Assistant Secretary of the Treasury Rose.
  2. In telegram 305, from Montevideo, dated Apr. 30, 1953, Ambassador Roddan stated in part the following: “Unless last minute change, Pittaluga will send lengthy cable to Secretary State stating impossible for Uruguay to change present tops rate.” He further stated that “Embassy believes Uruguayan position is primarily based on economic factors. However, slight undercurrent of martyrdom idea being ‘little Uruguay’ is victim to ensure passage reciprocal trade act.” (411.3331/4–3053)