711.542/22

The Minister in Switzerland (Wilson) to the Secretary of State

No. 518

Sir: I have the honor to transmit herewith a French text and translation of a project handed to me by the Department of Public Economy of the Swiss Government for a commercial treaty between the United States and Switzerland. It will be noted that in general [Page 927] it follows the commercial clauses of the draft treaty of commerce, amity, and consular rights which we submitted to the Swiss Government in 1926.

Following the procedure which I had adopted in connection with the Swiss draft for the treaty of establishment, I called on Dr. Walter Stücki, Director of Public Economy, and explained to him that I was not authorized to negotiate on the draft which he had submitted but that I desired to ask him for certain elucidation on his draft.

It will be noted that the Swiss draft omits completely Article 13 of the original draft submitted to them relative to right of transit; a similar article, however, is included in Swiss Commercial Treaties with neighboring countries. Mr. Stücki explained, when this was brought to his attention, that of course the Swiss Government had no objection to the idea expressed in the article; they had merely considered it superfluous in view of the phraseology of their Article 1, paragraph 1, (our Article 7, paragraph 1) which states that commerce will be free between territories of the contracting parties. He added that they would certainly construe this as giving all benefits which are provided under our Article 13 above-mentioned.

I asked Mr. Stücki what had motivated the Swiss Government in its insertion of paragraph 1 of “the additional stipulations”, relative to most-favored-nation treatment for Swiss merchandise regardless of the nationality of the vessel importing the goods. Dr. Stücki explained in entire frankness that they had been encountering difficulties with the Canadian Government on this very question; that the Canadian Government had been subjecting merchandise imported in German bottoms to three times the charges to which merchandise was subjected imported in British or French bottoms. But certain of the Swiss merchants had old established agreements with German shipping companies for carrying their goods and it was inconvenient to alter this. No question of discrimination had ever arisen as concerned the United States of America. It was Dr. Stücki’s desire merely to select from the various shipping clauses (which of course have no application to Switzerland) the single matter which was of interest to them.

Paragraph 2 of the “additional stipulations” raises a point of exceeding interest now that the nations of the world are beginning to negotiate multilateral economic treaties. I had noticed that Dr. Stücki, who represented Switzerland at the Export and Import Conference,29 had been peculiarly insistent on the fact that a bilateral most-favored nation obligation did not necessarily give to the contracting parties all the privileges which one of the contracting parties might have conceded to the other signatories under a multilateral treaty. Dr. Stücki explained that in the last meeting of the Economic Committee of the [Page 928] League of Nations he had been named Rapporteur, charged with making a report to the Committee on this very question. He had not desired to make this additional stipulation too lengthy an article and too complex but had wished primarily to raise the question so that some sort of a formula might be evolved. He explained that in his report to the Economic Committee (which by the way has not yet been acted on) he had proposed that in the event that a state which was not signatory to a multilateral agreement and which, however, did not maintain those forms of restrictions or customs or whatever restraint the multilateral treaty was designed to eliminate, should enjoy the benefits of the most-favored nation. It was only in the case where a non-signatory state refused to accept the obligations of a multilateral treaty that it could not claim the benefits thereof under the most-favored nation bilateral agreement.

Relative to the Protocol, I again emphasized the fact that I was not negotiating and had no authorization to do so. I pointed out, however, that by this paragraph and particularly the last sentence thereof the Swiss Government was proposing to us to submit to our Senate something which was in direct conflict with our existing law. I then asked him whether he really considered that this was of high importance to Switzerland. Dr. Stücki replied that my question was almost as delicate as the one which they raised by inserting the Protocol. Certainly as evidenced by the Swiss press a great deal of hostility in Chambers of Commerce and business circles has been shown against any idea of examination into costs on Swiss territory by American agents, and the Federal Council and the legislative bodies of Switzerland would certainly want to know very definitely why mention of this had been omitted by Mr. Stücki and would certainly be extremely desirous of seeing some method adopted which could eliminate the possibility of such examination. Naturally, Mr. Stücki did not consider this as sine qua non for acceptance of a commercial convention with ourselves. Nevertheless, he did regard it as of high importance and added that he understood that we were now engaged in some sort of arrangement with the French Government relative to this matter and stated that he would have to insist upon most-favored nation treatment in this particular application of law. I am not entirely familiar with the procedure which we have adopted toward the French Government in this connection. It may be that some unofficial arrangement has been reached which, if we accorded it to Switzerland, would eliminate the necessity for the Protocol in the Convention.

  • Article 2, paragraph 1. I pointed out that the meaning was somewhat obscure and there appeared to be a non-sequitur of thought. Mr. Stücki agreed that the French text was not entirely clear and stated that his office would work over this text and try to improve it. He explained that what they were trying to reach was exactly the meaning [Page 929] conveyed by Article 4, paragraph 7, of the Export and Import Convention of November 8, 1927.30
  • Article 3, paragraph 1. I call special attention to the question of translation of this paragraph. It is of considerable difficulty and should be examined with some care. In the last line I have translated “les industriels (voyageurs de commerce)” as “wholesale commercial travelers”, basing this translation on Dr. Stücki’s explanation of his meaning.

Relative to the formal certificate (Annex A),31 I asked Dr. Stücki whether this was intended to be an official document. He stated that it was official; that under the treaty of Customs Formalities to which Switzerland was a party, facilities for commercial travelers had been made as broad as possible and a certificate such as proposed to us was now accepted by all states signatory to this Convention. In Switzerland such documents were issued by special cantonal bureaus or by the Department of Public Economy. The document bore the name and seal of the authority issuing it. No visa or other further formality was required for the user of this certificate.

The Department will note that very decided restrictions are put on retail commercial travelers, as well as on peddlers and hawkers. Inasmuch as I know of only one American commercial traveler who obtained a license to visit Switzerland during the past year, as against some 250 German commercial travelers, it would seem to be to our advantage that the activities of commercial travelers should be rigidly confined to those in the wholesale market.

Dr. Lyon, the Commercial Attaché, has in preparation a comparative analysis of Switzerland’s contractual commercial relations. As soon as this document is completed, I shall forward a copy to the Department, inasmuch as I believe it will be found of value, in consideration of this general question, to understand the practice and broad principles which Swiss public economy is endeavoring to follow.

This Swiss draft is the final step in the preparation of the Swiss counter-project, and I venture for your convenience to cite the references to the various reports which I have made and which it may be found advantageous to consider as a whole. The list follows:

  • 335 of March 8, 1928;
  • 358 of March 18, 1928;
  • 387 of April 4, 1928;
  • 415 of April 24, 1928;
  • 423 of May 5, 1928.

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I shall take no further steps in this matter until the Department has had the opportunity to reflect upon what has been submitted and instruct me in the premises.

I have [etc.]

Hugh R. Wilson
[Enclosure—Translation]

Swiss Draft of a Treaty of Commerce

The Federal Council of the Swiss Confederation and the President of the United States, desirous of promoting the commercial relations between Switzerland and the United States, have resolved to conclude a treaty and have designated for this purpose as their plenipotentiaries, to-wit:

who, after having communicated to each other their full powers, found in good and due form, have agreed upon the following articles:

Article I

  • P. 1. Between the territories of the contracting parties there shall be freedom of commerce; the nationals of each of the contracting parties shall enjoy the treatment granted the nationals of the most favored nation respecting the free access of their goods to all places which are or may be open to foreign commerce. Nothing in this treaty shall be construed to restrict the right of either contracting party to decree, on such terms as it may see fit, prohibitions or restrictions of a sanitary character designed to protect human, animal, or plant life, or regulations for the enforcement of police or revenue laws.
  • P. 2. Each of the contracting parties binds itself unconditionally to impose no higher, more onerous, or other duties, charges, and conditions, and no prohibition on the importation of any article, the growth, produce or manufacture of the territory of the other party, arriving directly or indirectly, other than are or shall be imposed on the importation of any like article, the growth, produce or manufacture of any other foreign country; nor shall any duties, charges, conditions, or prohibitions on importations be made effective retroactively on imports already cleared through the customs or on goods declared for entry into consumption in the country.
  • P. 3. Each of the contracting parties also binds itself unconditionally to impose no other, higher, or more onerous, charges or other restrictions or prohibitions on goods exported to the territory of the other party than are imposed on goods exported to any other foreign country.
  • P. 4. Any advantage of whatsoever kind which either contracting party may extend, now or in the future, by treaty, law, decree, regulation, [Page 931] practice or otherwise, to any article, the growth, produce, or manufacture of any other foreign country, shall immediately, without request, unconditionally, and without compensation be extended to the like article, the growth, produce or manufactured of the other contracting party.
  • P. 5. With respect to the amount and collection of duties of every kind on imports and exports, each of the contracting parties binds itself to give to the nationals and goods of the other party the advantage of every favor, privilege, or immunity which it shall have accorded to the nationals and goods of a third state, whether such favored state shall have been accorded such treatment gratuitously or in return for reciprocal compensatory treatment. Every such favor, privilege, or immunity which shall hereafter be granted the nationals or goods of a third state shall simultaneously, without request, unconditionally and without compensation be extended to the other contracting party for the benefit of itself, its nationals, or its goods.
  • P. 6. The stipulations of the present Article do not extend:
  • insofar as the United States is concerned to the treatment which is accorded the commerce of Cuba under the provisions of the Commercial Convention concluded by the United States and Cuba on December 11, 1902, or any other commercial convention which hereafter may be concluded between the United States and Cuba. Such stipulations moreover do not extend to the treatment accorded to the commerce between the United States and the Panama Canal Zone or any of the dependencies of the United States or to the commerce of the dependencies of the United States with one another, under existing or future federal laws. Insofar as Switzerland is concerned such stipulations do not extend to the privileges which have been or may be accorded to a bordering state with a view to facilitating frontier trade in a zone, not to exceed 15 kilometers beyond the frontier, nor to the obligations resulting from any customs union which the Confederation has concluded or may hereafter conclude.

additional stipulations

  • P. 1. It is agreed that the most-favored nation treatment to be accorded Swiss goods imported into the United States shall apply, without any restriction, irrespective of the nationality of the vessel by which they are carried.
  • P. 2. It is agreed that the most-favored nation treatment stipulated in the present article does not entitle either of the contracting parties to the benefits of the stipulations granted in multilateral international conventions to which the other party is not also an adherent.
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protocol

P. 1. Whenever doubts may arise regarding the valuation or the proof of value of merchandise for importation, the injured contracting party will call the fact to the attention of the other contracting party. The Government of the party thus complained to will at once institute a special inquiry and communicate the result thereof to the complaining party. In no event will one of the contracting parties proceed to institute an investigation on the territory of the other contracting party through its own agencies.

Article II

The nationals and merchandise of each contracting party within the territory of the other shall receive the same treatment as nationals and merchandise of the country with regard to internal taxes, transit dues, charges in respect to warehousing, and other facilities and the amount of bounties and drawbacks.

This stipulation does not extend to merchandise, which is or may become, in the territory of one of the contracting parties, a state monopoly, as well as to the intention of applying to foreign merchandise all the prohibitions and restrictions which have or may be the result of national legislation relative to the production, transportation, sale, or consumption within the country of similar native merchandise.

Article III

  • P. 1. Without prejudicing the possibility of their receiving greater advantages as the result of the most-favored nation treatment, merchants, and other manufacturers of one of the contracting parties, as well as their commercial travellers, shall have the right, upon presenting a certificate delivered by the authorities of their country, and conforming to the laws and regulations in force, to purchase goods within the territory of the other contracting party, whether from dealers, in places of public sale, or at the residence of persons producing the said goods. They may also take orders from dealers or other persons engaged in business in which are used those types of merchandise they are offering. They may bring with them samples or models and, insofar as concerns their activity as described in the present paragraph, they shall not be subject either to taxes or special fees. Wholesale commercial travellers who are provided with a certificate have, however, the right to bring with them merchandise to the same extent as is authorized to wholesale commercial travellers within the country.
  • P. 2. Samples or models imported by the above-mentioned persons shall be admitted free of import and export dues, in conformity with the customs regulations and formalities drawn up to enforce their reexportation, or the payment of customs duties in the event of their not being re-exported within the period fixed by law.
  • P. 3. Re-exportation of samples or models belonging to commercial travellers may be effected through another customs house than the one of their import. The re-exporting office will be authorized to reimburse on its own authority the duties or taxes which have been provisionally paid, or deposited, or if the sum has been merely guaranteed to take the necessary steps to cancel the guarantee furnished.
  • P. 4. The contracting parties further agree that samples of objects in precious metals (jewelry, goldsmith work, clockwork) shall be exempted from the requirements of marking or stamping in the country of importation, provided that they are re-exported within the customary period.
  • P. 5. The certificate must be drawn up in conformity with the model of annex A. The contracting parties will reciprocally inform each other of the authorities competent to issue such certificates.
  • P. 6. The stipulations of the present article shall not be applicable to peddling, hawking, or retail travelling salesmen seeking orders from persons without business or trade, and the contracting parties in this matter reserve full legislative liberty.

Article IV

  • P. 1. Subject to any limitation or restriction hereinabove set forth or hereinafter agreed upon, the territories of the contracting parties to which the provisions of this treaty extend shall be understood to comprise all areas of land, water, and air over which the parties respectively claim and exercise dominion as sovereign thereof, except the Panama Canal Zone.
  • P. 2. The present treaty shall likewise comprise the principality of Liechtenstein so long as the latter is bound to Switzerland by a treaty of customs union.

Article V

  • P. 1. Differences which may arise regarding the interpretation or application of the present treaty and which shall not have been settled through diplomatic channels within a reasonable period shall be submitted at the request of one of the contracting parties to an arbitral [Page 934] tribunal which, unless otherwise agreed upon, shall contain three members, each of the contracting parties naming one arbitrator and appointing by common accord the presiding arbitrator.
  • P. 2. If the Arbitral Tribunal has not been constituted within two months following notification of a request for arbitration, the procedure set forth in part 4 of the Convention of the Hague of October 18, 1907, for the pacific settlement of international disputes, shall obligatorily apply.
  • P. 3. In case doubt arises as to whether the difference of opinion bears upon the interpretation or the application of the treaty, this preliminary question will be submitted to arbitration under the same conditions as those stipulated in paragraph[s] 1 and 2 of the present article.

Article VI

The present treaty will be ratified as soon as possible and the ratifications thereof shall be exchanged at . . . . . .

The treaty is concluded for a period of ten years from the date of exchange of ratifications. If within one year before the expiration of the aforesaid period neither contracting party denounces the treaty, it shall remain in force until one year from such time as either of the contracting parties shall have notified to the other an intention of terminating it.

In witness whereof, the above mentioned plenipotentiaries have signed the present treaty in duplicate in the French and English languages.