RECIPROCAL TRADE Exchange of notes at Quito March 2, 1942, modifying agreement of SUBJECT: MODIFICATION OF THE TRADE AGREEMENT BETWEEN ECUADOR AND THE UNITED STATES OF AMERICA MR. MINISTER: I have the honor to refer to recent conversations which have taken place with regard to the financial emergency with which the Government of the Republic of Ecuador is today confronted and, in that connection, to certain provisions of the trade agreement between the Republic of Ecuador and the United States of America signed at Quito on August 6, 1938, as amended by notes exchanged at Quito on August 6, 1938, September 9, 1938, and September 13, 1938.2 In the course of these conversations it has been pointed out that the Government of the Republic of Ecuador finds it necessary, as a fiscal measure designed solely to meet the existing financial emergency, to augment customs revenues, which make up such a large percentage of total revenues, to an extent deemed necessary to safeguard vital interests of the nation. Consideration was given to the possibility of terminating both schedules of the trade agreement as a way out of the difficulty; but neither Government desires to adopt this course if it should be possible to avoid it. Therefore, the conversations to which I have referred have disclosed a mutual understanding which, specifically, is as follows: 1 2 Pursuant to notice of termination given by the United States Jan. 17, 1956. In view of the existing circumstances, the Government of the United States of America will not invoke the provisions of article I of the trade agreement in respect of the application of the proposed increase in customs duties to articles imported into Ecuador from the United States which are included in schedule I of the agreement. It is understood that such increase will be applied equally to all dutiable imports from all foreign countries and that such increase will not become effective with regard to imports from the United States prior to a period of 30 days from the date of this note. It is understood, further, that such increase will be reduced and finally eliminated as soon as Ecuador's fiscal situation improves sufficiently to warrant such a measure. I also desire to take this occasion to confirm the understanding which has been reached between the Government of the Republic of Ecuador and the Government of the United States of America that, notwithstanding the provisions of article X of the trade agreement concerning the control of foreignexchange transactions relating to trade between the two countries, the Governments of the two countries agree to apply and administer any control over such transactions as follows: 1. If the Government of either country establishes or maintains any form of control of the means of effecting international payments, it shall accord unconditional most-favored-nation treatment to the commerce of the other country with respect to all aspects of such control. 2. The Government establishing or maintaining such control shall impose no prohibition, restriction, or delay on the transfer of payment for any article the growth, produce, or manufacture of the other country which is not imposed on the transfer of payment for a like article the growth, produce, or manufacture of any third country. With respect to rates of exchange and with respect to taxes or charges on exchange transactions, articles the growth, produce, or manufacture of the other country shall unconditionally receive treatment no less favorable than that accorded to like articles the growth, produce, or manufacture of any third country. The foregoing provisions shall also extend to the application of such control to payments incidental to or necessary for the importation of articles the growth, produce, or manufacture of the other country. In general, the control shall be administered so as not to influence to the disadvantage of the other country the competitive relationship between the articles the growth, produce, or manufacture of that country and like articles the growth, produce, or manufacture of third countries. It is further understood that none of the provisions of paragraphs 1 and 2 above or of the trade agreement of August 6, 1938, as amended, shall prevent either of the two countries from adopting or putting into effect measures relating to public security or imposed for the protection of the country's essential interests in time of war or other national emergency. I avail myself of this opportunity to renew to Your Excellency the assurances of my highest consideration. His Excellency J. TOBAR DONOSO BOAZ LONG, Envoy Extraordinary and Minister Plenipotentiary of the United States of America, I have the honor to acknowledge the receipt of Your Excellency's Note No. 33-DC-9 of today's date with regard to the mutual understanding reached between representatives of the Government of the United States of America and the Government of the Republic of Ecuador concerning the application of certain provisions of the Trade Agreement between our two countries. I have the honor to confirm the statement in Your Excellency's Note of the understanding reached with reference to the matters dealt with therein. Please accept, Excellency, the renewed assurances of my highest and most distinguished consideration. His Excellency Dr. JULIO TOBAR DONOSO, Quito. BOAZ LONG LEND-LEASE 1 1 Agreement signed at Washington April 6, 1942 1942 For. Rel. (VI) 379 WHEREAS the United States of America and the Republic of Ecuador declare that in conformity with the principles set forth in the Declaration of Lima, approved at the Eighth International Conference of American States on December 24, 1938,2 they, together with all the other American republics, are united in the defense of the Americas, determined to secure for themselves and for each other the enjoyment of their own fortunes and their own talents; and WHEREAS the President of the United States of America, pursuant to the Act of the Congress of the United States of America of March 11, 1941,3 and the President of the Republic of Ecuador have determined, that the defense of each of the American republics is vital to the defense of all of them; and WHEREAS the United States of America and the Republic of Ecuador are mutually desirous of concluding an Agreement for the providing of defense articles and defense information by either country to the other country, and the making of such an Agreement has been in all respects duly authorized, and all acts, conditions and formalities which it may have been necessary to perform, fulfill or execute prior to the making of such an Agreement in conformity with the laws either of the United States of America or of the Republic of Ecuador have been performed, fulfilled or executed as required; The undersigned, being duly authorized for that purpose, have agreed as follows: ARTICLE I The United States of America proposes to transfer to the Republic of Ecuador under the terms of this Agreement armaments and munitions of war to a total value of about $17,000,000. 1Final settlement payment made on Feb. 12, 1951, and reported in 32d Report to Congress on Lend-Lease Operations, p. 3; arrangement for settlement of certain accounts contingent to this agreement signed Aug. 28, 1956, and final payment reported in 43d lend-lease report, p. 2. 'Ante, vol. 3, p. 534. * 55 Stat. 31. In conformity, however, with the Act of the Congress of the United States of America of March 11, 1941, the United States of America reserves the right at any time to suspend, defer, or stop deliveries whenever, in the opinion of the President of the United States of America, further deliveries are not consistent with the needs of the defense of the United States of America or the Western Hemisphere; and the Republic of Ecuador similarly reserves the right to suspend, defer, or stop acceptance of deliveries under the present Agreement, when, in the opinion of the President of the Republic of Ecuador, the defense needs of the Republic of Ecuador or the Western Hemisphere are not served by continuance of the deliveries. ARTICLE II Records shall be kept of all defense articles transferred under this Agreement, and not less than every ninety days schedules of such defense articles shall be exchanged and reviewed. The Government of the United States of America agrees to accord to the Government of the Republic of Ecuador a reduction of 96.47 percent in the scheduled cost of the materials delivered in compliance with the stipulations of the present Agreement; and the Government of the Republic of Ecuador promises to pay in dollars into the Treasury of the United States of America 3.53 percent of the scheduled cost of the materials delivered. The Republic of Ecuador shall not be required to pay more than a total of $100,000 before January 1, 1943, ARTICLE III The United States of America and the Republic of Ecuador, recognizing that the measures herein provided for their common defense and united resistance to aggression are taken for the further purpose of laying the bases for a just and enduring peace, agree, since such measures cannot be effective or such a peace flourish under the burden of an excessive debt, that upon the payments above provided all fiscal obligations of the Republic of Ecuador hereunder shall be discharged; and for the same purpose they further agree, in conformity with the principles and program set forth in Resolution XXV on Economic and Financial Cooperation of the Second Meeting of the Ministers of Foreign Affairs of the American Republics at Habana, July 1940,* to cooperate with each other and with other nations to negotiate fair and equi For text, see Department of State Bulletin, Aug. 24, 1940, p. 141. |