The Secretary of State to the Ambassador in France (Edge)
208. Your 316, May 13, 4 p.m., and 324, May 19, 11 a.m.32 We have gone over thoroughly the results to date of the quota negotiations with the French. The negotiations have secured some helpful concessions on minor points but the principle of a uniform period as a basis for all quotas is so invaded by exceptions notably those excluding agricultural quotas and protecting industrial agreements that the conception of the uniform period scarcely survives at all. We began the negotiations primarily to establish this principle of uniformity and we must now consider whether a reopening of this topic or an approach to the quota calculation from another angle would be wisest. The present French Government has apparently found it impossible to meet us fully and we are satisfied the Embassy has made all progress possible just now. Since we are not prepared to recede from our position we feel that continued discussions in this connection would serve no useful purpose and that such discussions might [Page 231] well be held in abeyance pending an adjustment of the present political situation in France. In the meantime we shall give further consideration and study to this particular aspect of the negotiations with a view to renewing discussions thereon when a new French Government has been formed.
We do find acceptable points C, D, E and F, and the provision in point B33 by which the United States would be granted a quota equal to 1931 French imports when the American share of those imports was 10% or less. It is therefore, suggested that you seek to obtain from the French agreement to make immediately effective, as a measure of interim relief, the points mentioned above in which we do find ourselves in accord and it be meantime understood the broader questions may be reopened as the situation develops.
In direct answer to your 324, it is my feeling that it would be well for you to sound out the French informally as to the possibilities of negotiating a definitive commercial treaty. I feel that before getting into direct treaty negotiations themselves it is essential to lay the foundation for mutual understanding in respect of the divergent theories which the two countries have as to the process leading up to the conclusion of a most-favored-nation treaty. It is essential that we avoid a recurrence of the impasse reached in 1927 when each side preached the virtues of its system as opposed to that of the other country. In other words, the French should recognize the inflexibility of our tariff laws as we will recognize the requirement in theirs that there be some quid pro quo in return for a most-favored-nation treaty. The French should likewise recognize that the non-application of Section 338 in itself is in the nature of a quid pro quo. Section 338 is comparable to the French general rates. I know, however, that the French cannot overlook the retaliatory aspect of this section, but, after all, their general rates are retaliatory as well. We, of course, do not know that there will be anything which we can find in the nature of a quid pro quo which will satisfy the French. If they are willing to be reasonable and give us plenty to choose from it may be that something can be found. For example, it may be possible to obtain legislation giving protection to French dress models or some such provision might be written into the treaty itself. I think that if we can start out on a reasonable mutual understanding the ultimate negotiation of a treaty acceptable to both countries ought not to be impossible.