Evening star., 1927-09-11
LATIN AMERICANS SEEK
RECIPROCITY TREATIES
Tariff Bargaining Is Desired to Get
Suitable Markets-Present u. S.
Policy Bars Plan.

The actual author (Secretary
Hughes is generally credited with be-
ing the father of the plan) who drew
up the unconditional" trade treaties
is understood to have been DIR. w. S.
Culbertson, formerly a member of the
Tariff Commission, formerly adviser
of the Department of State on COM
m:ercial matters, and now Minister to
Rumania. Since the conclusion Of the
German treaty two others of similar
type have been signed and approved
with Hungary and Esthonia. 1t Is
interesting to note that in that with
Esthonia reservation is made with
regard to the relations Of that new
country with the other Baltic states
with whom there are reciprocal rela-
tions similar to ours with Cuba, but
in all else they are identical in spirit
and plan with the German treaty. We
also have exchanged notes providing
a "modus vivendi" (pending the con-
clusion of formal treaties) with about
~ other countries, all along the ''un.
conditional most favored treatment"
line.
Not Much Favored.
Only one of the countries Of Latin
America has signed an unconditional
most favored nation" treaty with us.
This is Salvador, and this treaty was
modified by so many reservations in
the Salvador Congress that we have
asked for a reconsideration OF the
matter. Thus there is now no "un-
conditional" treaty in force between
the United States and any Latin
American country. There are five
with whom we have arranged the
"modus vivendi'' along that line, how
I1ro ozil Ia foor
Haiti and the Dominican Republic.
Thus we may gather by the record
that this type Of treaty is not much
favored there. At first glance this
might be called short-sighted, for we
have very specific provisions in the
tariff law that give privileges to fav-
ored nations, and this country offers
vast market into which Latin
American products ought certainly
enter on an equality-for instance.
with Africa, the growing rival Of
Latin America as a producer Of raw
materials. The reason for Latin
American disapproval Of 'uncondi-
tional most favored nation treaties"
has, however. another cause than
illogical prejudice. This has to do
with the peculiarly favorable position
in which Latin America sits at this
moment as a buyer of foreign goods.
Latin American countries-virtually
all the commercially important ones,
at any rate-are now enjoying a
virtually boundless credit in the
money markets of the world. I'M
mense loans are being floated with
ease, chiefly for public improvements.
Latin America Is today, more than
ever before, in a position to pick and
choose where she will buy; she has
more money to spend than she Is get.
, ting from her trade. and this condi-
ton will continue for some time to
come as the money from these loans
becomes available. She wants to use
this buying power to bargain with.
Her economists, and her politicians
who are not economists, want to trade
their big buying power for better
terms for what they sell in foreign
markets. They hate to be spending
lot of money. even If it is borrowed.
In markets where their goods are shut
out by tariff walls and embargoes.
They feel they are in a position to
make some advantageous trades. and
| first-off they discover that the chance
to use their advantages in the best
market in the world is eliminated by
a policy of substituting ''uncondi.
tional most favored nation" trade
| trea ties for those which allow for bar
gains. For instance, II Argentina is
going to buy q large order Of steel
rails she might like to take this occa-
sion to dicker with the United States
for a lower tariff on meat in exchange
| for a lower tariff on our rails Inn
ported into Argentina, thus enabling
our manufacturers to underbid COM
petitors and in exchange for this OBJ
tanning fine new market for Argen-
tine chilled beef here. That is the
gist of the story. Argentina will
conceivably do that very thing tomor-
row with Czechoslovakia, say, reduc-
ing the Argentine tariff on Czecho-
slovakian pottery in exchange for a
lower rate of duty on Argentine beef
into Czechoslovakia.
Sound Opposing Arguments.
OF course, as have presented It. 1t
seems that something ought to be done
about it here, but there are sound ar
guments on the other side, as well. In
the first place, the present policy of
making unconditional most favored
nation" treaties was entered into after
great deliberation by the experts of
the State, Treasury and Commerce
Departments. Already the existence
''modus vivendi' arrangements with 30
many other countries, would hardly
allow us to start making new reci-
procity treaties at this time: IL we did,
the only result would be to reduce the
tariff all along the line. Another
point Is that the position Of the United
States is so powerful in the CONNER
cial and industrial world that the safe
guard of guaranteed unconditional
most favored nation treatment is far
more vital to our commerce than reci-
procity treaties could possibly be
and they eliminate the endless mis-
understandings which specialized
agreements bring in their train. With
such treaties in force the richest coun-
try in the world is assured of an open
door for it's products, and with our
growing efficiency in production we
are already able to compete in hun
dreds of markets where a few years
ago we did not dream of ever entering.
For our own national ends, at least,
the "unconditionar' kind Of favored
nation treaty seems likely to persist.
Beyond that there remains forever
one of those great maxims Of Ameri.
can diplomacy which are too often
forgotten when we turn our eyes on
specific problems. This one Is that
policy Of the "open door and equality
of trade opportunity" once iterated
with relations to China, but actually
a fundamental Of our foreign COM
mercial policy. The unconditional
most favored nation" clause IL the
natural development of that policy.
The "open door" attitude may in times
to come conflict even more than today
with the opportunities, If not the re-
sponsibilities, that are ours under the
Monroe doctrine and it's innumerable
corollaries. But it is none the less
one of the realities of our world rela-
which has to be accepted and
handled along with many others Of
which the layman realizes but little
in the great game Of Pan-American
rala tiopS