I am enclosing a draft reply for your signature if you deem it
appropriate.
[Enclosure]
Draft of Letter From President Roosevelt to the Ambassador in
Chile (Bowers)
Dear Claude: I have received your letter
of December 13. In regard to the trade agreement proposals, it seems
to me from information furnished by the State Department that you
may not have taken sufficiently into account in your appraisal of
the situation that in an arrangement of this kind the binding of
duties may be of as much or greater importance than duty reductions
from a long-range viewpoint. I am told that on the basis of both
duty bindings and reductions, our proposals cover 55 percent of our
imports from Chile
[Page 439]
in
1938, whereas our requests cover only 39 percent of Chilean imports
from this country. One of the bindings which we offered was on
nitrate, and we were able to make this offer only after considerable
discussion necessitated by certain views expressed by the War
Department. Your computation does not seem to give weight to the
importance of this concession to Chile.
I agree that on the whole, the concessions we are now able to offer
leave something to be desired. It must be kept in mind, however,
that we are facing bitter opposition to the continuance of the
trade-agreements program which will come to a head when the Trade
Agreements Act comes up for renewal at the next session of Congress.
In these circumstances, it is necessary to proceed with caution.
With regard to our requests for tariff concessions from Chile, it may
be that these can properly be regarded as excessive, but it must be
borne in mind that in formulating our requests, we naturally must
indicate what would serve our interest. If the Chilean Government
considers them unreasonable and will indicate the ground on which it
finds them so, we will, of course, be glad to reconsider them.
We are hopeful that Pedregal can present specific proposals for the
proper utilization of the $5,000,000 credit, for the mutual benefit
of both countries. As yet, however, there seems to be little of a
concrete nature to report. I have asked the State Department to keep
you currently informed.
Very sincerely yours,
