661.9131/106
The American Legation in Persia to the Persian Ministry for Foreign Affairs9
Memorandum
I. 1) 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.
2) Confident that the Imperial Government shares this point of view, the American Government has authorized the American Legation at Teheran to proceed with the Imperial Ministry of Foreign Affairs to an exchange of views which would have as its object the definition of what has been referred to above as “privileges equivalent to those accruing to Soviet trade”, any such definition thus arrived at to be, of course, communicated to and subject to the approval of the American Government.
3) In the formulation and definition of such equivalent privileges it is believed that particular consideration should be given to the suggestion that in future the Imperial Department of Commerce grant import permits without requiring the prior submission of export certificates. The Government of the United States considers that a practical equivalent of the concession to Soviet trade in this respect would permit the production of export certificates within six months after the date of actual importation.
4) 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.
II. 5) 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; this, however, with the clear understanding that any failure on its part to protest regarding these phases of the matter (i.e., monopolization and percentage allotment [Page 803] of quotas) does not imply acceptance of such practices as compatible with the most-favored-nation principle.
6) 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.
7) 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 according to reliable estimates approximately seventy-five per cent (75%) of the tires now found on the Teheran market are imported from the United States while five per cent (5%) are of Soviet Russian manufacture.
- Transmitted to the Department by the Minister in Persia in his despatch No. 1159, June 15; received July 14.↩