611.2531/619
Memorandum of Conversation, by Mr. H. Gerald Smith of the Division of Trade Agreements
| Participants: | Señor Guillermo Gazitúa, Counselor, Chilean Embassy |
| Mr. Hawkins | |
| Mr. Smith |
Señor Gazitúa called to discuss certain questions in connection with the general provisions of the proposed trade agreement, concerning which he had received cabled instructions from his Government.
With regard to Article I, on most-favored-nation treatment, the proposal of the Chilean Government was for the use of the formula developed by the League of Nations on this subject.40 Señor Gazitúa was informed that his Government’s proposal was acceptable in principle, subject to a close examination of the actual language of the League of Nations’ formula in relation to that proposed by this Government, but it was believed that the final clause of the League of Nations’ formula, on exceptions for frontier traffic and customs unions, should remain in Article XVI with other exceptions, as set forth in the draft proposed by this Government.
With respect to Article V, on monopolies, the Chilean Government expressed a desire that this be eliminated from the proposed agreement. It was indicated to Señor Gazitúa that we wish to retain this Article, and before considering its elimination, we would wish to know the reasons why the Chilean Government desired to have it dropped.
The Chilean Government also desired to eliminate Article IX of the proposed draft which provides specifically that the schedules annexed to the agreement and the notes included in them will be considered as integral parts of the agreement. It was indicated to Señor Gazitúa that we might eliminate Article IX provided the appropriate changes were made in Articles VII and VIII to the effect that the schedules were to be considered parts of the agreement.
In Article XIV, the general safeguard provision, the Chilean Government desired to have a thirty day escape clause inserted. Señor [Page 437] Gazitúa was informed that such a proposal would be acceptable to this Government and that appropriate changes should be made in the first and third paragraphs of Article XX.
Señor Gazitúa stated that his Government desired to have Article XVI broadened to include exceptions to most-favored-nation treatment in connection with trade between Chile and its contiguous countries (Peru, Bolivia and Argentina). He was informed that this Government was opposed in principle to such exceptions to most-favored-nation treatment, that the Cuban exception on our side was a special case based on historical considerations and was much less comprehensive than the Chilean proposal respecting contiguous countries, that it would be to Chile’s disadvantage if the United States were to permit exceptions in the case of Canada and Mexico, (which we would not in any case desire), and finally that in view of the fact that various countries with which Chile has treaties or agreements do not reciprocate in the matter of exceptions of contiguous countries, the exception proposed by Chile would have little practical significance. On the basis of the foregoing, this Government could not agree to the Chilean proposal.
With regard to the third paragraph of Article XVII, respecting the constitutional limitations on the authority of the Federal Government in the United States with respect to the sale, taxation or use of imported articles, the proposal of the Chilean Government was to make this provision reciprocal. It was indicated to Señor Gazitúa that there would be no objection to this proposal.
Señor Gazitúa pointed out with respect to Article XX, the termination provisions, that his Government had stated that only the schedules and the related general provisions could be put into effect provisionally, the entry into force of the remaining general provisions being subject to ratification by the Chilean Congress. It was suggested to Señor Gazitúa that he inquire of his Government whether it was believed possible that the agreement could be ratified by the Chilean Congress within thirty days following signature, and if so that the provisions of Article XX be drafted so as to provide for the entry into force of the entire agreement on that basis. If it should develop that Congressional ratification could not be secured within thirty days then the suggestion was made that the schedules and related general provisions be put into effect provisionally thirty days after signature and the remainder of the agreement following exchange of the instruments of proclamation by the President of the United States and of ratification by the Chilean Congress.
Señor Gazitúa said that he would send a cable immediately to his Government conveying the foregoing information.
- League of Nations, Official Journal, Special Supplement No. 138, p. 128.↩