Foreign Relations of the United States, 1952–1954, The American Republics, Volume IV

411.333/5–253

Memorandum of Conversation, by the Director of the Office of Regional American Affairs (Cale)

confidential

[Washington,] May 2, 1953.

Subject:

• Proposed Countervailing Duty Action on Wool Tops

• Participants: The Secretary
• H—Mr. Morton
• E—Mr. Linder
• E—Mr. Leddy
• ARA—Mr. Mann
• AR—Mr. Cale

Mr. Mann said that he had been requested by the Uruguayan Embassy to bring to the Secretary’s attention the note¹ addressed to the Secretary by the Uruguayan Foreign Minister on the above subject. Mr. Mann provided the Secretary with an English translation of the note (see attachment), which the Secretary read.

Mr. Mann pointed out that the Uruguayan Government took the position that the manufacture of wool tops is a natural industry for Uruguay since tops are made out of Uruguayan raw material. He also pointed out that the Uruguayans look upon the manufacture of wool tops as one way which they can help diversify their economy and raise the general level of living in Uruguay. Mr. Mann said that the Treasury Department, on the other hand, is of the opinion, especially in view of complaints from our wool interests, that the Uruguayan Government is subsidizing the exportation of wool tops and that the countervailing duty provision of the Tariff Act of 1930 should be applied. If this is done, our action will certainly be resented in Uruguay to an extent which it is difficult to predict with accuracy. On the other hand, the Uruguayans have not been cooperative in helping us find a mutually satisfactory formula.

Mr. Morton called attention to the need to go through with the action on wool tops as a means to improving the chances of obtaining Congressional approval of a one-year extension of the Trade Agreements Act. He said that the White House hopes that it may be possible to persuade Congressman Simpson² to withdraw substantially all the amendments provided for in his bill, but that he will insist that countervailing duties be levied on Uruguayan wool tops, even if he agrees not to press for the amendments.

Mr. Linder reviewed for the Secretary the discussions which we have had with Treasury Department representatives regarding the matter. He then said that he believed it is likely, in the absence of action on wool tops by the Executive, that Congress may take action which will make it mandatory that the Executive levy countervailing duties on a much larger scale. He also stated that he thought the Treasury representatives would be in an impossible position in testifying on the Customs Simplication Bill in the absence of action on wool tops.

The Secretary asked that a reply be prepared to the note from the Uruguayan Foreign Minister expressing the Secretary’s regret that he was not able to accede to the Minister’s request. He also asked that a letter to Senator Millikin³ be drafted for his signature enclosing a copy of the Foreign Minister’s note as an indication of the difficulties raised in our foreign relations by action such as that contemplated on wool tops. The Secretary pointed out that Senator Millikin had requested that he consent to the proposed action by Treasury on wool tops.⁴

1. A translation of the referenced note, dated Apr. 30, 1953, is attached to the source text, but not printed.
2. Richard M. Simpson (R.–Pa.).
3. Eugene D. Millikin (R.–Colo).
4. On May 6, 1953, the Treasury Department announced that it was establishing countervailing duties on imports of wool tops from Uruguay. For text of the Treasury Department’s press release, see Annual Report of the Secretary of the Treasury on the State of the Finances for the Fiscal Year Ended June 30, 1953 (Washington, 1954), p. 227.