711.632/28: Telegram
The Acting Secretary of State to the Minister in Austria (Washburn)
Washington, September 23, 1927—6
p.m.
17. Your despatch No. 1468, July 11 last. Article seven.
- 1.
- Bases of Duties. In case of duties or charges expressed as a percentage, bases refers to value upon which duty is calculated, namely, whether invoice value, value at the frontier, duty-paid value, wholesale or retail prices; in case of duties or charges collected by weight or quantity, reference is to dutiable weight, whether gross, net, or other weight basis. It is obvious that effective most-favored-nation treatment could in practice be denied through discrimination in the basis upon which duty is collected. The purpose of this Government is to make clear that most-favored-nation treatment includes bases of duties. While this Government considers that the provisions of the original draft of Article VII cover by implication the bases on which duty is computed, it believes that it is desirable to have the assurance stated specifically as in the new draft. It is hoped that with this explanation the phrase will be accepted by the Austrian negotiators. It is included in drafts which this Government now has under negotiation with other countries.
- 2.
- Retroactive Application. You are authorized to agree that the clause end with the word “retroactively.”
- 3.
- Licensing Systems. The United States regards the provisions of the International Customs Agreement of 1923 and the substitute provision proposed by Austria to the American draft as inadequate, because they give assurance only with regard to formalities to be observed in granting licenses, and do not give assurances as to commodities and the relative quantities thereof. The resolutions of the Geneva Economic Conference of 1927 recommended that “the scope and form of the most-favored-nation clause should be of the widest and most liberal [Page 986] character, and it should not be weakened or narrowed either by conditions expressed or by interpretation.” The embodiment in a permanent commercial treaty of provisions limiting the assurances with regard to the favorable treatment to formalities in connection with licenses, and omitting the material factors of commodities and quantities would be a narrowing of the favored-nation clause in a way to which this Government would not agree. This Government hopes that the Austrian Government will agree to the precise assurances of most-favored-nation and equitable treatment contained in paragraph 4 of the American draft.
- 4.
- Emergency Exceptions. The Department would be glad if Austria will accept the exception limited to “war”. It desires to avoid a term which might be interpreted to include financial or economic crises. If Austria insists upon an enlargement of this exception, you are authorized to agree to “in the event either High Contracting Party shall be engaged in war, or shall experience similar national emergency.”
- 5.
- Frontier Traffic. This Government considers that it is desirable to define the limits of the frontier traffic. You are, therefore, authorized to accept the second of the alternatives quoted in your despatch.
- 6.
- It is understood that a copy of a memorandum by Mr. Chalmers95 was sent to the Commercial Attaché at Vienna who will be glad to render any assistance you may desire.
Carr
- Mr. Henry Chalmers of the Bureau of Foreign and Domestic Commerce, Department of Commerce.↩