611.6131/452: Telegram
The Secretary of State to the Ambassador in the Soviet Union ( Davies )
91. Your 167, July 11, 8 p.m. References are to your numbered sections.
- Your 4. The Department does not insist that the Soviet Government approve the wording of the press release as given in Section 5 of Department’s 85, July 8, 6 p.m., so long as it is assured there is no objection thereto on the part of the Soviet Government.
- Your 5. The Department desires that you make every effort to persuade Soviet Government to abandon its insistence on the bilateral basis of the most-favored-nation provisions and to obtain Soviet commitment to purchase $40,000,000 or thereabouts in accordance with Section 2 of Department’s 89, July 10, 4 p.m.
With reference to the question of goods in transit through the Soviet Union, Department desires to point out for your information that at the present time, according to an official Soviet publication (see enclosure [Page 424] to Embassy’s despatch No. 2073, November 17, 193673), the United States on the basis of its existing agreement with the Soviet Union is listed among those countries receiving most-favored-treatment in this matter. Furthermore, the question of the treatment of goods in transit is not mentioned in the Netherlands Agreement.
The following is for use if necessary in your negotiations with the Soviet officials. While the Department is fundamentally opposed for the reasons previously given to the acceptance of the Soviet proposal with regard to the inclusion of most-favored-nation treatment on a bilateral basis, it should be pointed out that in addition the Department could not agree, at least at the present time, to the insertion of the usual Soviet reservation in regard to certain countries of Central Asia and the Baltic States. The inclusion of such a clause would involve a question of general commercial policy and considerable time would necessarily be required for the consideration of all factors involved particularly since such a clause would probably be considered as a precedent by other countries with which trade agreement negotiations may be entered into by this Government in the future.
Furthermore, if pressed by Soviet officials, you may point out that you are confident that if your Government could be persuaded to accept the bilateral clause in the proposed agreement, it would insist on making its position on this question a matter of record in a written communication, stating that the bilateral clause was included at the request of the Soviet Government and that the extension to the United States of most-favored-nation treatment by the Soviet Union is not regarded by his Government as any part of the quid pro quo for the extension of most-favored-nation treatment to the Soviet Union.
Your 165, July 10, 7 p.m., and Section 6 of telegram under reference. Department omitted exportation clause in Section 1 of the proposed agreement because its inclusion would introduce a new element heretofore not present in the previous commercial agreements with the Soviet Union and thereby raise new issues which would require some time for consideration in the Department.
- Not printed.↩