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.

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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.

[Annex]

Draft Document Handed by the Secretary of State to the Japanese Ambassador (Nomura) on November 15, 1941

Unofficial, Exploratory and Without Commitment

Joint Declaration by the United States and Japan on Economic Policy

i. general policy

1.
The Government of the United States and the Government of Japan undertake to cooperate fully in urging all nations to reduce trade barriers, to eliminate all forms of discrimination in international commercial relations, and in general to work toward the creation of conditions of international trade and international investment under which all countries will have a reasonable opportunity to secure, through peaceful trade processes, the means of acquiring those goods and commodities which each country needs for the safeguarding and development of its economy.
2.
The Government of the United States and the Government of Japan undertake that each of them shall make its appropriate contribution toward the creation of the type of international economic relations envisaged above.
3.
As important steps in that direction, the Government of the United States and the Government of Japan shall establish between themselves and shall seek to establish in the Pacific area the economic relationships indicated below.
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ii. the united states-japan relationship

1.
The United States and Japan undertake to inaugurate, as rapidly as practicable, measures toward restoring the commercial, financial and other economic relationships between them to a normal basis.
2.
The United States and Japan agree to enter into discussions looking toward the negotiation of a reciprocal trade agreement between the two countries.
3.
It is understood that during the present international emergency Japan and the United States each shall permit export to the other of commodities for its own use subject to such restrictions or limitations as may be required by each for its own security and self-defense. It is understood that both governments will apply any such restrictions or limitations in the spirit dominating relations with friendly nations.

iii. policy in the pacific area

1.
Complete control over its economic, financial and monetary affairs shall be restored to China.
2.
The Government of the United States and the Government of Japan undertake not to seek in China any preferential or monopolistic commercial or other economic rights for themselves or their nationals, but to use all their influence toward securing from China commercial treatment for themselves no less favorable than that accorded to any third country and full cooperation in the promotion of the general policy stated in the first paragraph of this Declaration.
3.
The Government of the United States and the Government of Japan undertake to suggest to the Chinese Government that it inaugurate, with foreign assistance where necessary, a comprehensive program of economic development, a full opportunity to participate in which shall be accorded the United States and Japan on terms no less favorable than those accorded any third country.
4.
The relations which the United States and Japan, respectively, will seek to establish with other countries of the Pacific area shall be governed by the basic principles set forth in this Declaration; and the Governments of the United States and of Japan agree to urge those countries, wherever feasible, to undertake comprehensive programs of economic development with full opportunity to participate in such programs, in so far as foreign assistance may be requested, accorded to the United States and to Japan on terms no less favorable than those accorded any third country.