411.3331/5–553: Telegram

The Secretary of State to the Embassy in Uruguay 1


200. Uruguayan Embassy has delivered long memorandum2 (urtel 311).3 We hope our reply now being drafted will help dispel misunderstandings.

Suggest meanwhile you emphasize verbally these points to Uruguayans.

Countervailing duty fixed at 18% invoice value based on extent bounty found by Treasury although complaints received alleged bounty totaled 49%.
Treasury action open to review if Uruguay takes action which eliminates basis for finding bounty exists and we are willing continue consultation effort find mutually satisfactory solution.
Uruguay informed more than year ago and many times since difficult situation caused by stimulation export wool tops U.S. plus law Congress making countervailing duty mandatory where bounty existed. [Page 1562] In repeated discussions problem since then Uruguayans have not proposed any solution.
Our tentative figures show general imports of Uruguayan wool tops increased from about 3% U.S. consumption 1951 to 9% in 1952. Total imports from all sources about 11% consumption. However, relationship of imports to U.S. consumption is not basis for conclusion bounty exists.
There is no intention discriminate against Uruguay. Rather it has been found exports wool tops from Uruguay to U.S. in effect receive benefit of bounty. So far bounties not found exist on wool tops imports from any other country supply significant amounts U.S. market. If any other countries are found be granting bounties on their exports wool tops to U.S. similar countervailing duties will be applied.
Question MSA legislation in our opinion unrelated this problem.
Right to levy countervailing duty in event subsidy internationally recognized. Treasury action cannot be interpreted as U.S. return to high tariff policy since action required by long existent law. President Eisenhower favors expanded world trade balance at high levels and administration will conduct exhaustive studies to determine future trade policies4 for attainment this objective.

Without minimizing importance countervailing duty action to Uruguayan economy we should attempt discourage tendency (1) portray this as political rather than economic measure (2) exaggerate its importance (3) assume pessimistic attitude possibility satisfactory future resolution problem.

Points mentioned above may be used at your discretion for statement urtel 313.5

  1. Drafted by Deputy Assistant Secretary Mann and signed by Mr. Atwood.
  2. Not printed.
  3. The referenced telegram, dated May 5, 1953, is not printed (411.3331/5–553).
  4. For documentation relating to U.S. trade and commercial policy, see volume i .
  5. The referenced telegram, dated May 7, 1953, is not printed (411.3331/5–753).