The American Legation in Persia to the Persian Ministry for Foreign Affairs 7
The Government of the United States of America considers that the most-favored-nation clause of the Provisional Agreement of May 14, 1928, between the United States and Persia entitles American trade with Persia to privileges equivalent to those accruing to Soviet trade under the Perso-Soviet Convention of October 27, 1931, if and when ratifications of the latter are exchanged.
In its consideration of this question the American Legation has been directed by its Government to exchange views with the British Legation at Teheran. In that exchange the American Legation was informed of representations made some months ago by the British Legation and of the subsequent dependent negotiations which have ensued and are still continuing between that Legation and the competent authorities of the Imperial Government. With the views thus expressed by the British Legation the American Government is substantially in accord.
In particular the Government of the United States concurs in the suggestion that in future the Imperial Department of Commerce grant import permits without requiring the prior submission of export certificates but upon the submission in lieu thereof of a responsible bank or otherwise acceptable guarantee.
In this latter connection the Government of the United States considers, as an abstract proposition, that a closer and more practical equivalent of the concession to Soviet trade might properly involve the granting of import permits subject to the production of requisite export certificates within six months after the date of actual importation. But there is no disposition to press this point should the Imperial Government believe, for reasons of control, that its adoption would prove impracticable.
The Government of the United States is, at the same time, confident that the Imperial Government will realize the importance of a stipulation to the effect that applications for import permits enjoying the proposed privileges should not be less favorably treated than applications, if any, not similarly favored.[Page 799]
With respect to the import quota percentages reserved to Soviet trade, as well as the entire monopolization of certain quotas and the possible extension of such monopolization, to the direct injury of American exports to Persia, the Government of the United States is not now prepared to assert a definite policy. It desires to associate itself with the British reservation on this point, with the clear understanding that any failure on its part to protest regarding these phases of the matter (i.e., monopolization and percentage allotment of quotas) does not imply acceptance of such practices as compatible with the most-favored-nation principle.
From the American Government’s study of the said Convention from the viewpoint of its probable effects on the volume of American exports to Persia, it appears that the quota percentages reserved to Soviet trade will result in an adverse effect on American shipments of automobile tires and possibly machinery.
In particular, it would appear that the allotment to Soviet trade of twenty-three per cent (23%) of the “Rubber Goods” quota entails a restriction of the normal American share of Persian imports of tires for automobiles and motor trucks and might, therefore, be considered to be, in fact, a discrimination against American trade with Persia, On this point the American Legation ventures to add that, on the authority of the latest official statistics published by the Imperial Customs Administration (i.e., those for the year 1309 [1930?] American tires constituted approximately fifty-seven per cent (57%) of total Persian imports of that commodity, while tire imports from Soviet Russia amounted to but six per cent (6%) of that total.
- Transmitted to the Department by the Minister in Persia in his despatch No. 1077, March 8; received April 1.↩