711.94/254019/25
Oral Statement Handed by the Secretary of State to the Japanese Ambassador (Nomura) on November 15, 1941
The Japanese Government has stated that it “recognizes the principle of non-discrimination in international commercial relations to be applied to all the Pacific areas, inclusive of China, on the understanding that the principle in question is to be applied uniformly to the rest of the entire world as well”. (Underlining added.)
The underlined portion of the statement sets forth a condition the meaning of which is not entirely clear. It is assumed, however, that it is not the intention of the Japanese Government to ask the Government of the United States to assume responsibility for discriminatory practices in areas outside of its sovereign jurisdiction, or to propose including in an arrangement with the United States a condition which could be fulfilled only with the consent and cooperation of all other Governments.
The principle of unconditional most-favored-nation treatment has for many years been the cornerstone of the commercial policy of the United States. Since the first World War this principle has been embodied in virtually every commercial treaty concluded by this Government. Since 1934, when the United States embarked upon an extensive program of commercial agreements for the reduction of [Page 735] trade barriers, it has constantly applied this principle. In twenty-two agreements this Government has on its part reduced duties on over a thousand classifications of the American tariff, and it has extended these reductions to Japan and all other countries of the world with only two exceptions. These exceptions have been countries whose commercial practices represented a flagrant departure from the principle of non-discriminatory treatment. The withholding of trade-agreement concessions from those countries was itself a step in furtherance of the policy of non-discrimination since the purpose was to create inducement for the abandonment of discriminatory practices. One of the countries from which the benefit of such concessions had been withheld abandoned its flagrant discriminatory measures, and the United States at once extended to that country the benefit of the duty reductions made in its trade agreements.
The Government of the United States has not only placed its own trade relations with foreign countries on an unconditional most-favored-nation basis, but has sought consistently to further the application of that policy throughout the world. On every appropriate occasion it has urged upon other countries the adoption of non-discriminatory policies and has sought to bring about the progressive elimination of preferences and discriminations of all kinds.
In the twenty-two trade agreements above referred to, the Government of the United States has obtained from foreign countries commitments respecting the reduction of tariffs and other trade barriers on thousands of products. These concessions affect products which are imported not only from the United States but from other countries as well. The Government of the United States has neither sought nor accepted commitments whereby these benefits would be restricted to imports from the United States. On the contrary, it has obtained these reductions in the trade barriers of foreign countries on the assumption and expectation that they would be extended to other supplying countries. Indeed, as part of its general policy of nondiscrimination in international trade, it has advocated the extension to all countries of the concessions made in such agreements. In this way the reduction of trade barriers which results from a program of trade agreements such as that pursued by the United States is given the widest possible effect and makes the maximum contribution to the building up of world trade from which all nations benefit.
It is believed that, if Japan would devote itself to wholehearted cooperation in furthering the policy of non-discrimination as practiced and advocated by the Government of the United States and as practiced and advocated for many years by the Government of Japan, a long forward step would be taken toward attaining the objective which the Japanese Government’s statement under reference has in view.
[Page 736]In the light of the foregoing, the Government of the United States raises question whether in the view of the Japanese Government there is need of the proviso under discussion, namely, “on the understanding that the principle in question is to be applied uniformly to the rest of the entire world as well”, and whether the proviso might not be omitted.
As a practical manifestation of the way in which the Government of the United States has applied and is prepared to apply the principle of non-discrimination in international commercial relations, there is offered for consideration as a purely tentative suggestion a draft of a possible United States-Japanese declaration on economic policy. It is understood, of course, that agreement as to such a declaration is subject to agreement on the other points involved in a peaceful settlement covering the Pacific area as a whole and that this Government would expect, before entering into negotiations on such a possible United States-Japanese declaration on economic policy, to discuss the matter with the British Government and with other specially interested governments.