The Secretary of State to President Harding

My Dear Mr. President: I have your letter of February 27, informing me that it is your view that the adoption of the unconditional favored nation policy by the United States in the commercial treaties which are about to be negotiated or revised is the simpler way to maintain our treaty policy in accordance with the recently enacted tariff law and probably the surer way to extend American foreign trade and authorizing me to proceed with negotiations upon the unconditional policy.

The relation of the Reciprocity Convention of 1902 with Cuba90 to the unconditional most favored nation policy has been given consideration by this Department. The importance which Congress attaches to the preservation of this reciprocity arrangement is shown by the fact that in each of the three tariff laws, Acts of 1909, 1913 and 1922, enacted since the Convention was concluded a special provision was made saving the Convention from abrogation or impairment by the tariff legislation. With a view to recognizing the expressed will of Congress in regard to the Reciprocity Convention with Cuba, it is my purpose to ask countries with which we enter into negotiations to include in the treaties which they sign with the United States an Article which will except the Reciprocity Treaty with Cuba from the operation of the unconditional most favored nation clause.

I apprehend that other powers will not make serious objection to an agreement of this sort in regard to Cuba, although it may be that certain of them will ask on their own part for similar exceptions [Page 130] to the unconditional clause. It would seem to me that such demands should be judged by the particular circumstances of each case, and that we might agree to those which involve an intimate geographical, political and economic relationship such as exists between the United States and Cuba. I may mention that Latvia recently has proposed to conclude a treaty of commerce and navigation with the United States and in connection with this proposal has indicated a desire that a qualification be admitted to the most favored nation clause permitting Latvia to make special commercial arrangements with its immediate neighbors, Esthonia and Lithuania, and possibly with Russia without extending identical treatment to the commerce of the United States.91

The result of negotiations in situations of the kind presented by the proposal from Latvia should be that the treaties would provide for the exception of the Reciprocity Convention with Cuba from the operation of the most favored nation clause and for the exception of such of the special reciprocity agreements of the other party as may fairly be regarded as involving a political and economic relationship equivalent to that on which the Convention between the United States and Cuba rests.

I should be pleased to be informed whether the policy indicated by this illustration would receive your approval.

Faithfully yours,

Charles E. Hughes
  1. Foreign Relations, 1903, p. 375.
  2. See par. 6 of the provisional commercial agreement between the United States and Latvia, signed Feb. 1, 1926, printed by the Department of State as Treaty Series No. 740.