550.S1 Economic Commission/56: Telegram
The Chairman of the American Delegation (Hull) to the Acting Secretary of State
[Received July 20—1:10 p.m.]
155. Delegation is still endeavoring to get its proposal on commercial policy in final form for the Conference.
I have the sense that those sections dealing with the most-favored-nation clause in some respects break new ground and they will be taken here to represent a real contribution by the American Government.
Before submitting them I wish to be sure that they have been brought fully to the President’s attention; the drafts regarding them so far received appear to have come from the experts’ committee which has been at work in Washington and I do not know certainly whether or not the matter has received the President’s personal notice.
The passages in question are as follows:
“Such agreements should have incorporated in them the most-favored-nation principle in its unconditional and unrestricted form to be applied to all forms and methods of control of imports and not only to import duties—subject only to such limited or temporary exceptions [Page 726] as may gain general assent (perhaps registered in a multilateral accord).
Such bilateral agreement shall not introduce discriminatory features which while providing an immediate advantage to the contracting parties will react disadvantageously upon world trade as a whole.
The governments declare that the most-favored-nation principle enjoins upon every power making use of the quota system or other systems for limiting imports to apply these systems so as [to] derange as little as possible the natural relative competitive positions of the various countries supplying the imports of articles affected.
The participating governments urge the general acceptance of the principle that the rule of equality shall not require the generalization of the reduction of tariff rates or import restrictions made in conformity with plurilateral agreements giving promise of bringing about a general economic strengthening of the trade area which would prove of common benefit to the nations generally; provided such agreements;
- (a)
- include a trade area of substantial size;
- (b)
- call for reductions that are made by uniform percentages of all tariff rates or by some other formula of equally broad significance;
- (c)
- are open to the accession of all countries;
- (d)
- give the benefit of the reductions to all countries which in fact make the concessions stipulated and;
- (e)
- when the countries party to the plurilateral agreement do not during the term of plurilateral treaty materially increase trade barriers against imports from countries outside of such agreement”.
As time is extremely short I would appreciate an immediate reply.