611.5131/563: Telegram
The Chargé in France (Whitehouse) to the Secretary of State
352. My 350, September 14, 5 p.m.67 The following aide-mémoire was handed me this morning by Foreign Office. Owing to its importance I am transmitting it textually.68
[Page 674]“The French Government has noted the proposals and requests contained in the aide-mémoire which the First Secretary of the Embassy of the United States was good enough to forward to the Political Director of the Ministry for Foreign Affairs on September 7.
The French Government has considered, with the most cordial desire to do justice to American interests, the situation arising from the tariff reform of August 30, 1927.
There can be no misunderstanding that this reform implies as regards certain products originating in and coming from the United States which are not included in lists A and B of the modus vivendi of March–April 191069 an augmentation resulting both from the increase of basic duties and the withdrawal of the benefits which article 2 of the decree of March 28, 1921,70 assured to the said products.
But it has appeared to the French Government that the benefits assured by this decree as to American products without any contractual obligation constituted a measure motivated in 1921 by exceptional circumstances and particularly by the monetary position of certain European states to which other states had taken exception or had claimed the benefit of these advantages and that finally the exceptional treatment which they implied for the United States was not in harmony with the constant increase in the American tariffs and the reinforcement of customs barriers practiced by America since that time to the detriment of certain specific products of the French trade.
The French Government has therefore deemed that it should return, on the occasion of the customs reform instituted in consequence of the Franco-German treaty, and within the limit of this reform, to the legal position which resulted from the simultaneous acts of 1910.
It welcomes on the other hand with the greatest satisfaction the offer made to it by the Government of the United States to substitute for these simultaneous acts which have only given an incomplete status to exchanges between the two countries a treaty giving to individuals and corporations of each of the two states as well as to their trade and navigation extended guarantees consistent in all points with their traditional friendship.
As the American Government suggests, the French Government is ready to begin within a few weeks the negotiation of a treaty of this nature but it believes however that it should subordinate its adhesion to a preliminary assurance.
Today, as during the laborious negotiations carried on from 1897 until 1910, the French Government believes that it is not possible to place on the same level the indiscriminate application of the common customs law practiced by the United States which excludes any present or eventual favor being granted to third states and the positive advantages of the most-favored-nation treatment and of the granting of the minimum French tariff.
On the other hand the French Government is of the opinion that the prohibitive regime resulting for certain French products from the particularly high tariffs which the United States has in force at present and the moderate rates of the French minimum tariff [Page 675] which offer to American exporters generous possibilities on the French market cannot be considered as equivalent.
The French Government cannot therefore consider that article 7 of the preliminary draft presented by the American Embassy under date of September 12th constitutes a favorable basis for the negotiations which it is disposed to undertake. It would like to receive the assurance of the American Government that it agrees to consider that the negotiations which are about to be undertaken must on the one hand guarantee to America a treatment of more complete equality with its most-favored competitors on the French market under the regime of granting the minimum tariff to the principal exported products and on the other hand guarantee to French exports advantages of the same nature on the American market not only by the application without discrimination of the tariff of the United States but also, should there be occasion, by such reductions or adaptations of this tariff as might appear necessary to permit the sale of certain specific French goods on the American market.
If the French Government were to receive this preliminary assurance which appears to it to be the indispensable starting point for the elaboration of a treaty consistent with equity and the interests of the two countries, it would be disposed, in order to facilitate the negotiations and to permit their development in an atmosphere of active cordiality, to enact immediately a decree diminishing by 50 percent the surplus rates instituted by the decree of August 30 for the benefit of products originating in and coming from the United States which, not being covered by the statute of 1910, find themselves at present subjected to the maximum rates of the said tariffs.
This highly conciliatory measure would take place immediately after an exchange of letters specifying the object which the two Governments have in view in opening the negotiations for a definite treaty.
It may be withdrawn if these negotiations should not bring forth the happy result that the two Governments hope for.
Paris, September 15, 1927.”
[Paraphrase]
Commenting on its aide-mémoire the Foreign Office said that the observations made by the American Government (as set forth in Department’s telegram No. 260, September 3, 1 p.m.), constituted request for maximum benefit possible and that the Government of the Republic, without appropriate compensation, could not grant this; that the minimum rates which were granted to Germany after 3 years of laborious negotiation had been balanced by very substantial concessions by Germany to French exports, and that it seemed unreasonable that a nation which has no contractual commercial relations with France should expect to obtain, automatically, equal benefits.
In reply I pointed out that France enjoys most-favored-nation treatment from us, and that all we are asking is that same treatment [Page 676] be accorded us provisionally until treaty negotiations can be consummated.
The Foreign Office replied that to say we granted France most-favored-nation treatment was to its mind a misnomer; that all we do in reality is to refrain from discriminating against France, and consequently France feels that even for transitory period we are seeking an extremely large concession for which, as a return, we should offer some quid pro quo. As Department will note, French aide-mémoire raises at once fundamental question of principle concerning basis of commercial treaty negotiations.
The Foreign Office stated that in its offer to us of 50 percent reduction in general tariff, the French Government was paying us good money in return for promises. I asked how it could be thought that we could promise either reductions or adaptations for specific benefit of French commodities when provisions of Tariff Act of 1922 are well known to the Government of the Republic; I added that I felt confident that the Government of the United States would not be able to contemplate treaty negotiations on any such basis as that, and that I felt obliged, on the other hand to refer to the provisions of section 317 of the present tariff law.
I regret to say that the Foreign Office insisted that present offer constituted really friendly effort to satisfy us, and that means can be found for agreements within its scope (the Department will please note in this connection the elasticity of the important phrase which begins “should there be occasion,” referring to tariff reductions by us).
I said in conclusion that while I should report immediately and fully to my Government, I was unable to conceal my disappointment and my fear that the consequences which would follow in the United States as result of persisting in application of new general tariff rates and which I was earnestly hoping to avoid, would not be either retarded or averted by present answer of the French Government.
I am still under impression that the Foreign Office to greater or less extent realizes disastrous effects of uncompromising attitude in this matter, but that it has encountered determined opposition in Ministry of Commerce and possibly in Poincaré himself. If the Foreign Office is to have its hands strengthened in further discussion with other interested French Ministries, this result could probably be best brought about by urgent recommendations from the French Ambassador in the United States. For that reason I respectfully suggest that power of President to increase duties 50 percent be brought prominently to his attention.
- Telegram in four sections.↩
- Not printed.↩
- Translation slightly revised, from the French text forwarded with despatch No. 7898, Oct. 4, 1927, printed on p. 681.↩
- Law of March 29, France, Journal Officiel, Mar. 30, 1910, p. 2621; decree of April 4, ibid., Apr. 5, 1910, p. 2975.↩
- France, Journal Officiel: Lois et décrets, Apr. 3, 1921, p. 4155.↩