Evening star., 1943-01-05
Trade Treaty Spells
Mexico's Triumph
Over Oil Companies
Signing Of Agreement
Lost Week Lifted Lid
On Exports to U. S.
BY LEON PEARSON.

Mexico 1t deserved the headlines
on both sides of the Rio Grande
for it spelled the final triumph of
the Mexican government over the
American oil companies.
The event was the signing of q
trade agreement between Mexico
and the United States-an agree
ment which had been stalled last
summer because of the objections
of Standard Oil Co., but which
finally contained far greater con-
cesSions to Mexico than those OBJ
Jected to six months ago.
Quotas Lifted Entirely.
In short, the agreement lifts the
quota entirely and admits to the
United States unlimited quantities
of foreign petroleum at a reduced
rate of duty. This means that not
only Mexico, but Venezuela, Colom-
bla, or any country not blacklisted
by the United States. may now send
oil to our ports in unlimited quanti-
ties at a trifling duty.
For most countries the conces-
sion is academic, since the subma-
rines and the shipping shortage are
still an effective barrier But Mexi-
co is less affected by these factors,
since the shipping distance is less,
and since she has her own fleet of
tankers for delivery. Thus the con-
cesSion is real and tangible for
Mexico, and she may be depended
upon to make the most Of it,
The point to be remembered Is
that Mexico has been struggling for
nearly five years to get a foreign
market for her oil, and has failed
because of North American opposi-
ton. Now she succeeds in getting
that market, and it is North Amer
lea which provides the market.
Dates Back to Seizures.
The struggle dates back to the
appropriation of oil properties by
the Mexican government in 1888.
For years thereafter the injured
companies, with the support of this
Government, tried to make failure
of MeXicos efforts to manage the
properties by denying to Mexico a
foreign outlet. This drove Mexico
into the arms of Italy and Germany.
who were glad enough to take the
oil and to provide tankerS in eX-
change, in which still more oil
might be shipped.
But when the war broke, Britain's
blockade prevented fulfillment of
these agreements, and Mexico re-
neWed her efforts to sell Oil across
the border in the United States.
We were still unwilling to buy and
said so in blunt language at the
time of negotiating the United
trade agreement.
That agreement set quota OF g.
600 1000 barrels of oil to be admitted
to the United States, from all coun-
tries. at the reduced tariff of 10l2
cents a barrel against the full tariff
of 81 cents). OF the total, the lions
share was allotted to Venezuela. or
70 per cent, while Mexico got
paltry per cent.
Policy Fails.
Thus was the United States Gov
ernment working with the United
States oil companies to deny Mexi-
CO a market for the oil she was
pumping from appropriated wells.
1t was hoped Mexico might be driven
to see the error of her ways. But
the policy failed We reversed our
selves, and sent Morris Cook, we'll
known Philadelphian, to Mexico last
winter to make a settlement. Where
as the American companies had
claimed their properties were worth
at least S15000O,O00 the Cook-Ze-
bada agreement made a settlement
at S23,995 ,99l.
The companies were furious and
declined to accept the settlement.
Then came the trade agreement dis
cuSsions. The State Department,
following the new policy of concilia-
ton, was willing to give Mexico a
larger share of the quota of half
duty oil, but when the question was
referred to the petroleum co-ordi-
nator's office, as matter of routine,
1t struck a snag.
For weeks it hung on that snag.
Mexico became reStive. Her princi-
pal negotiator. Dr. Ramon Beteta,
Undersecretary of Treasury, threw
up his hands and went home. The
State Department became restive,
and tried to blast the agreement
free from the snag. Not until fall
was this accomplishment then it
was too close to election time for
comfortable negotiation of a trade
agreement.
Snag Laid to Davies.
The snag was the Deputy Petro-
leum Co-ordinator, Mr.. Ralph K
Davies, vice president Of Standard
Oil Co, of California. one of the
companies whose properties were
appropriated by Mexico. Though
MI. Davies is on leave from Stand
ard Oil, he still receives S55,000 a
year from that company, in addi-
ton to his salary of $1,000 from
the Government.
For a time at least, Standard Oil
enjoyed its revenge.
The concession which Mr. Davies
objected to was to give MiXico &c
per cent instead of per cent OF
the half duty quota. He succeeded
in blocking that concession. But
when the trade agreement was final
ly signed. it contained a far greater
concession. Instead of giving MeXi-
co the desired 80 per cent, the agree
ment lifts the lid and says, the
sky's the limit.
We have come around to the posi-,
ton of welcoming any oil we can ge
especially when the shipper, as ir
the case of Mexico, can deliver te
East Coast ports.
The negotiators were impelled not
only by the immediate needs of The
United States, but also by the long.
range consideration that American
oil resources should be conserved
and that in the national interest
we should encourage rather thar
hinder the importation of oil from
abroad.
(Press Alliance. IncD