671.116/15
The Chief of the Division of Near Eastern Affairs (Murray) to the Acting Secretary of State
Mr. Phillips: The Rumanian Minister called on me this morning to discuss further certain phases of the most recent Rumanian discrimination against American imports.
Mr. Davila said that in order to be able to bring effective pressure on his Government in this matter he would like to know more precisely what we interpreted as being discrimination against American imports under the Rumanian import quotas. I told the Minister that, while we did not like the idea of import quotas, we nevertheless realized that under the present abnormal economic conditions in the world the establishment of some sort of import quotas was more or less inevitable. What we are protesting against is therefore not the establishment of import quotas by Rumania, but the arbitrary administration of those quotas which threaten[s] to shut us out of the Rumanian market altogether. I said that we would not object if Rumania, in administering the quota, would accord us a share of import permits proportionate to the share held by American exporters over a given period of years prior to the setting up of the quota. This, however, the Rumanian Government has refused to do. What the Rumanians are actually doing at the present time is to refuse to grant permits to importers of American goods and to grant such permits to importers of goods from other countries on the score that Rumania’s trade with each and every country should be made to balance. I said that such treatment in American trade with Rumania was in gross violation of our provisional trade agreement with that country.
Mr. Davila argued that Rumania was in such a precarious position at the present time that she was obliged to trade primarily with countries that purchased from her. I pointed out that Rumania had enjoyed a favorable trade balance of considerable size prior to the inauguration of the present discriminatory quota procedure, and reminded him that this favorable trade balance had only begun to diminish after the present quota practices were introduced. He answered that import quotas were not of Rumania’s invention; that Rumania disliked them but had been [Page 690] forced to introduce them because her favorable trade balance was beginning to diminish. He pointed out that all the agrarian countries in Southeastern Europe were against import quotas and would work for their abolishment at the London Conference. Pending a solution of the question, however, he felt that we should not be too severe on Rumania even though the present practices are in violation of our most-favored-nation agreement with her. I told the Minister that it would be difficult, if not impossible, for us to acquiesce in any such practices as are now being followed by the Rumanian Government and that we are bound to oppose out and out discrimination of this kind against us.