560.M2/37: Telegram

The Chief of the American Delegation ( Wilson ) to the Secretary of State

4. Third session, morning, general discussion continued. Roumanian delegation introduced following text either to be included in article 1 or as special declaration:

“It is understood that the present agreement does not apply to export and import, each state reserving the right to determine its own customs tariffs.”

Since this is in some respects similar to your desires as outlined in criticism of article 1, contained in your 65, October 6th, I consulted Roumanian delegate after session, pointed out difficulty for us to urge acceptance of an article mentioning “export duties” and mentioned our desire to specify right to counteract dumping and bounties. Roumanian delegate suggested that if I would introduce, as substitute for his resolution, the following text he would immediately withdraw his and support ours. Text follows:

“It is understood that the present agreement does not apply to customs tariffs, each state reserving the right to establish customs duties in accordance with its own necessities.”

Does Department feel that this text is sufficient for our needs? If so, it gives a convenient way to enter this question with full support of another nation. Urgent reply requested.

Dutch delegation stated that if they surrender the right to impose restrictions, they would be giving up their only weapon against nations of excessive tariffs. Therefore, the cooperation of Dutch delegation in this convention could only be expected if the convention includes a declaration against excessive tariffs which constitute another handicap to free intercourse.

Fourth session afternoon. President announced that he intended to form very small committees of rapporteurs. He had grouped the articles of similar nature into four groups and would form eventually four such committees as follows:

  • Group 1. Articles 1, 6, 9 and 10.
  • Group 2. Articles 2, 3, 11.
  • Group 3. Articles 8 and 12.
  • Group 4. Articles 4, 5 and 7.

He added that there would be debate and explanation of amendments in plenary session; that all amendments would then be returned to small group for classifying and reporting back to the Conference [Page 268] with recommendations. He then opened discussion on article 1. Amendments were proposed by Italian and British delegations both tending to emphasize reciprocal character of contractual obligations. Since document C.I.A.P.1, page 20, paragraph 2, assumes obligations could only be held to extend to contracting states, a principle corroborated in paragraph 1 of discussion article 6, on page 24, I offered no objection to this interpretation. Extended discussion followed as to rights of noncontracting states under most-favored-nation clauses which was inconclusive. This I believe is not a question which can be settled by this Conference.

Discussion of point 6 followed. Some doubts were cast by French and British delegations as to necessity for this article. I stated that we considered this article necessary and reserved the right to offer an amendment and explain it subsequently.

Debate on article 9 was inconclusive and reverted to the previous discussion on rights of noncontracting states under most-favored-nation clause, since certain states feared obligation to grant concessions to such noncontracting states. Great Britain made the only tangible proposal, namely, that the number of states in blank should be double the number of those holding permanent seats on the Council and states listed in appendix should be those holding permanent seats. I desire more time to shape views for recommendations on this subject. It may be advisable to await report of reviseurs before making recommendations.

Article 10 was not specifically discussed.

President announced that at plenary session tomorrow articles 2 and 3 will be taken up, adding that reviseurs would begin work in group 1 after morning plenary session.