611.6131/507: Telegram

The Secretary of State to the Chargé in the Soviet Union (Kirk)

94. Your 152, June 14, 11 p.m. Department’s 85, June 9, 6 p.m. In the first 9 months of agreement year (including the entire month of August 1937) exports (including reexports) from the United States to the Soviet Union amounted to $41,327,000. United States imports for consumption from the Soviet Union amounted in the same period to $17,560,000. The distinction between “orders placed” and actual imports by the Soviet Union from the United States accounts for a considerable part of the discrepancy between Soviet and United States figures.

While United States exports to the Soviet Union are normally larger than our imports from that country, the latter have increased steadily under the successive agreements and in the calendar year 1937 reached the record total of $27,329,000. They should increase substantially in the future as a result of concessions being granted by the United States in trade agreements with other countries. Statistics being forwarded to you20 indicate that Soviet products benefiting from trade-agreement concessions accounted for 27.5 percent of the value of total imports of Soviet products into the United States in 1936. Moreover, additional products of interest to the Soviet Union under consideration in connection with agreements at present contemplated accounted for about 46 percent of imports from the Soviet Union in 1936 (this figure is of course only a very rough indication of the amount of Soviet trade which may benefit from the concessions ultimately granted). Neither of these figures includes the value of our imports of coal accounting for 11.6 percent of our imports from the Soviet Union which, however, have benefited during the current agreement year from the extension to the Soviet Union of most-favored-nation treatment.

Before the detailed tables supporting these conclusions reach the Embassy, you may wish to refer to the schedules of United States concessions [Page 607] in the published texts of our trade agreements, particularly those with Belgium, Brazil, Canada and France, and the lists of possible concession items accompanying the formal announcements of intention to negotiate trade agreements with Turkey, the United Kingdom, and Canada, which appear in the Department’s printed press releases of January 8, 15 and 29, 1938.

It is evident from the above figures why the Department believes that the figure for guaranteed Soviet purchases should be increased in the next agreement. It is suggested that you bring these figures to the attention of the Soviet authorities. At the same time you should request an early reply to your informal representations concerning the renewal of the present agreement in view of the fact that not much more than a month remains before the present agreement is due to expire.

Hull
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