611.3731/794a

The Secretary of State to the Ambassador in Cuba (Caffery)

No. 289

Sir: There is enclosed herewith a draft of the general provisions of the proposed trade agreement with Cuba. While this draft has not [Page 147] yet received the formal approval of the interested Government Departments, and although the Department may want to introduce certain refinements in language, I believe that the draft is in a sufficiently advanced form to serve as a basis for discussion with the Cuban authorities. In view of the desirability of concluding the negotiations at the earliest possible moment, please refer to the Department by cable any comments requiring further instructions that the Cuban authorities may have regarding the draft.

Very truly yours,

For the Secretary of State:
Sumner Welles
[Enclosure]

Draft of the General Provisions of the Reciprocal Trade Agreement With Cuba

Preamble

The President of the United States of America and the President of the Republic of Cuba, desirous of strengthening the traditional bonds of friendship and commerce between their respective countries by maintaining as the basis for their commercial relations the granting of reciprocal preferential treatment, in continuation of the policy adopted in the convention of commercial reciprocity of 1902 between the two countries, and taking into consideration that changed conditions have rendered it necessary to modify the provisions of that convention, have arrived at the following agreement:

Article I

During the term of this Agreement, all articles the growth, produce or manufacture of the United States of America which would have been admitted free of duty if imported into the Republic of Cuba on the day of signature of this Agreement, and all articles the growth, produce or manufacture of the Republic of Cuba which would have been admitted free of duty if imported into the United States of America on the day of signature of this Agreement, shall be so admitted by the respective country free of duty.

Article II

Articles the growth, produce or manufacture of the United States of America enumerated and described in Schedule I annexed hereto and made a part of this Agreement, shall, on their importation into the Republic of Cuba, be granted exclusive and preferential reductions in duties not less than the percentages specified respectively in Column 1 of the said schedule, such percentages of reduction being applied to the lowest rates of duty, respectively, now or hereafter [Page 148] payable on like articles the growth, produce or manufacture of any other foreign country.

No article the growth, produce or manufacture of the United States of America enumerated and described in Schedule I annexed hereto, with respect to which a rate of duty is specified in Column 2 of the said schedule, shall in any case, except as provided in Article VIII or XI, be subject to any customs duty in excess of the rate so specified.

Every article the growth, produce or manufacture of the United States of America which is not provided for in Article I, and which is not enumerated and described in Schedule I annexed to this Agreement, shall, on importation into the Republic of Cuba, be granted an exclusive and preferential reduction in duty of not less than 20 per centum, such percentage of reduction being applied to the lowest rate of duty now or hereafter payable on the like article the growth, produce or manufacture of any other foreign country.

Article III

Articles the growth, produce or manufacture of the Republic of Cuba enumerated and described in Schedule II annexed hereto and made a part of this Agreement, shall, on their importation into the United States of America, be granted exclusive and preferential reductions in duties not less than the percentages specified respectively in Column 1 of the said schedule, such percentages of reduction being applied to the lowest rates of duty, respectively, now or hereafter payable on like articles the growth, produce or manufacture of any other foreign country.

No article the growth, produce or manufacture of the Republic of Cuba enumerated and described in Schedule II annexed hereto, with respect to which a rate of duty is specified in Column 2 of the said schedule, shall in any case, except as provided in Article VIII or XI, be subject to any customs duty in excess of the rate so specified.

Every article the growth, produce or manufacture of the Republic of Cuba which is not provided for in Article I, and which is not enumerated and described in Schedule II annexed to this Agreement, shall, on importation into the United States of America, be granted an exclusive and preferential reduction in duty of not less than 20 per centum, such percentage of reduction being applied to the lowest rate of duty now or hereafter payable on the like article the growth, produce or manufacture of any other foreign country.

Article IV

The United States of America and the Republic of Cuba agree that the notes included in Schedules I and II are hereby given force and effect as integral parts of this Agreement.

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Article V

The Republic of Cuba undertakes that no change will be made in the customs treatment provided for by Decree No. 1660 of November 5, 1927, promulgated in the Official Gazette of Cuba, No. 109 of November 7, 1927, affecting any article classified under Items 270 or 271 of the Cuban customs tariff, without prior negotiation with the Government of the United States of America.

The Republic of Cuba further undertakes that no change will be made in the customs treatment or internal taxation of any article classified on the day of the signature of this Agreement under Items 5 to 8 inclusive of the Cuban customs tariff without prior negotiation with the Government of the United States of America.

Article VI

The Republic of Cuba undertakes that no reduction will be made in the customs duty or consumption tax in force on the day of the signature of this Agreement on any article classified under Items 101, 102, 239 or 274 (sub-items to be specified) of the Cuban customs tariff, unless simultaneous and proportionate reductions are made in the import duties or consumption taxes on all other articles described in such tariff items.

Article VII

Fees, charges or exactions imposed by the United States of America or the Republic of Cuba for consular certification of invoices or for other consular services pertaining to the complete documentation of any shipment of articles the growth, produce or manufacture of the territory of the other country shall not exceed in the aggregate two per centum of the free on board (F. O. B.) invoice value of the merchandise concerned, at the port of exportation, except that this limitation shall apply only where the charges for such services would otherwise be in excess of two dollars and a half on merchandise of Cuban origin or two pesos and a half on merchandise of origin in the United States of America. Such fees, charges or exactions shall not in any case be higher than those imposed by the United States of America or the Republic of Cuba, respectively, upon shipments of like merchandise from any other country. This article, however, shall not be construed to embrace such reasonable fees, charges or exactions pertaining to documentation required by the sanitary laws or regulations of the United States of America or the Republic of Cuba as are commensurate with the services performed.

Article VIII

In respect to articles the growth, produce or manufacture of the United States of America or the Republic of Cuba, imported into the [Page 150] other country, on which ad valorem rates of duty are assessed, it is understood and agreed that the methods of determining dutiable value and of converting currencies shall be no less favorable to importers than the methods prescribed under presently existing laws and regulations of the respective importing country.

Article IX

All articles the growth, produce or manufacture of the United States of America or the Republic of Cuba, shall, after importation into the territory of the other country, be exempt from national or federal internal taxes, fees, charges or exactions, other or higher than those payable on like articles of national or any other foreign origin: Provided, That all articles enumerated and described in Schedule I annexed to this Agreement, with respect to which a rate of duty is specified in Column 2 of the said schedule, shall be exempt from all taxes, fees, charges, or exactions, other than customs duties, in excess of those imposed or required to be imposed by laws of the Republic of Cuba in force on the day of the signature of this Agreement; and all articles enumerated and described in Schedule II annexed to this Agreement, with respect to which a rate of duty is specified in Column 2 of the said schedule, shall be exempt from all taxes, fees, charges or exactions, other than customs duties, in excess of those imposed or required to be imposed by laws of the United States of America in force on the day of the signature of this Agreement. The provisions of this Article, insofar as they apply to taxes, fees, charges, or exactions imposed within the United States of America, shall apply only to such taxes, fees, charges, or exactions as are subject to statutory control by the federal government of the United States of America.

Article X

On and after the day on which this Agreement comes into force, articles the growth, produce or manufacture of the United States of America and articles the growth, produce or manufacture of the Republic of Cuba previously imported into the other country shall be subject to the term of this Agreement, if entry therefor has not been made, or if they have been previously entered without payment of duty and under bond for warehousing, transportation, or any other purpose, and without any permit of delivery to the importer or to his agent having been issued; Provided, That when duties are based upon the weight of merchandise deposited in any public or private warehouse, the said duties shall, except as may be otherwise specially provided in the tariff laws of the respective countries in force on the day of signature of this Agreement, be levied and collected upon the weight of such merchandise at the time of its entry.

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Article XI

In respect to articles subject to specific rates of duty, neither the United States of America nor the Republic of Cuba shall impose any additional duty, surtax, or other charge, by reason of any reduction in the value of its coin or currency with reference to the legal gold equivalent thereof as of June 1, 1934: Provided, That in the event that any such reduction shall have exceeded ten per centum with reference to the legal gold equivalent of such coin or currency as of June 1, 1934, the rates of duty levied on a specific basis in the country whose coin or currency is so reduced in value on imported articles the growth, produce or manufacture of the other country may be increased to an extent no greater than is necessary to compensate for such reduction on the date of the arrival of the imported merchandise at the port of entry.

Article XII

The Customs preferences and other benefits provided for in this Agreement are granted by the United States of America and the Republic of Cuba to each other subject to the condition that the Government of each country will refrain from subjecting payments or the transfer of means of payment or the disposition thereof to any regulation, restriction, charge of exaction, other or higher than was in force on April 1, 1934, which results in (one) impairing or circumventing any provision of this Agreement, (two) placing an undue burden on trade between the nationals or residents of the respective countries, or (three) preventing or hindering nationals of either country residing, doing business, or traveling in the territory of the other country from securing and transferring in or to either country the funds reasonably necessary for, or arising from, such residence, business, or travel. In the event that the Government of either country considers that the other country has failed to comply with the conditions expressed in this article, and the latter country shall not have satisfactorily corrected the regulation, restriction, charge or exaction out of which such failure arises, after formal complaint has been made thereof, the Government of the country so complaining may terminate the Agreement thirty days after giving notice to the other Government.

Nothing in this article shall be construed to prevent the adoption of measures prohibiting or restricting the exportation of gold or silver.

Article XIII

The United States of America and the Republic of Cuba retain the right to apply such measures as they respectively may see fit with [Page 152] respect to the control of the export or sale for export of arms, munitions, or implements of war, and in exceptional circumstances of other material needed in war.

Article XIV

No administrative ruling by the Government of the United States of America or the Government of the Republic of Cuba effecting advances in duties or charges applicable under an established and uniform practice to imports from the territory of the other country shall be effective retroactively or with respect to articles either entered for or withdrawn for consumption prior to the expiration of thirty days after the date of publication of notice of such ruling in the usual official manner. The provisions of this article do not apply to administrative orders imposing anti-dumping duties, relating to sanitation or public safety, or giving effect to judicial decisions.

Article XV

Laws and regulations and decisions of administrative and judicial authorities pertaining to the classification of articles for customs purposes and to rates of duty shall be published promptly in such a manner as to enable traders to become acquainted with them, and shall apply uniformly at all ports of entry.

Article XVI

The provisions of this Agreement shall not apply to the Philippine Islands, the Virgin Islands, American Samoa, the Island of Guam, nor to the Panama Canal Zone.

Article XVII

The operation of the provisions of the Commercial Convention, concluded between the United States of America and the Republic of Cuba on December 11, 1902, shall be suspended on the day on which the present Agreement comes into force. In the event of the expiration or the denunciation of the present Agreement, the provisions of the aforesaid Convention of 1902 shall automatically resume operation and shall continue in full force and effect as provided therein until the expiration of one year from the day on which the Government of either country shall have given notice to the other Government of an intention to terminate it.

Article XVIII

The present Agreement shall come into force on the tenth day following the day of the signature thereof, after proclamation by the President of the United States of America and the President of the [Page 153] Republic of Cuba, and shall remain in full force for the term of three years thereafter, unless terminated pursuant to the provisions of Article XII. Unless within six months before the expiration of the aforesaid term of three years the Government of either country shall have given to the other Government notice of an intention to terminate the Agreement upon the expiration of the aforesaid term, the Agreement shall remain in full force thereafter until six months from such time as the Government of either country shall have given notice to the other Government.

In witness whereof the respective Plenipotentiaries have signed this Agreement and have affixed their seals hereto.

Done in duplicate, in the English and Spanish languages, both authentic, at the City of Washington, this . . . . . day of August, 1934.

For the President of the United States of America

For the President of the Republic of Cuba.