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  4. Document 554

554. Memorandum From the Special Assistant to the Assistant Secretary of State for Inter-American Affairs (King) to the Assistant Secretary of State for Inter-American Affairs (Rubottom)1

Washington, May 6, 1957.

SUBJECT

  • Uruguayan Trade Contacts with Soviet Bloc in 1956
(1)
A Uruguayan firm was reported to have sold 300,000 pounds of wool to Communist China in mid-1955. About a year ago, reports were received that Communist China had contracted for the purchase of an additional 600,000 pounds of Uruguayan wool at world market prices.
(2)
A treaty of commerce and navigation, a commercial agreement and a payments agreement were concluded with the USSR during 1956. These agreements are not yet effective, since they have not been ratified by the respective governments.
(3)
Three economic agreements were signed with the USSR on August 11, 1956 providing for an increase in trade. The payments agreement included provision for a $4 million short-term credit in the case of payments imbalance.
(4)
Early in the fall, the Uruguayan Government was reportedly studying but considered not likely to approve a proposed payments agreement with Communist China.
(5)
During the year, Uruguay considerably increased its purchases from the bloc, especially cotton. A Uruguayan firm was granted $1.9 million in foreign exchange for imports of textile machinery from East Germany.
(6)
A Czechoslovak industrial exposition was held in Montevideo in November. Czechoslovakia reportedly made overtures for a new trade agreement with Uruguay.
(7)
Towards the end of the year, 2,700 tons of cotton, valued at $2.25 million, purchased from the USSR, arrived in Montevideo.
(8)
A contract was reportedly signed on November 17 in Peiping under which Uruguay was to export more than $3.6 million of wool tops to Communist China.
(9)
In an effort to balance its trade with the Soviet bloc, Uruguay established a network of inter-bank agreements with six bloc countries. (Uruguay had previously built up substantial balances in its favor as a result of Soviet bloc failures to provide commodities.) The inter-bank agreement and exchange regulations appeared at the end of the year to have resulted in some reduction in total trade with the bloc.
  1. Source: Department of State, ARA Files: Lot 59 D 376, Uruguay 1957. Secret.↩