711.542/22
The Minister in Switzerland (
Wilson
) to the Secretary of
State
Berne
,
July 18,
1928
.
[Received August 6.]
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.
[Page 930]
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.]
[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.
[Page 932]
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.
