811.114 Liquor/793
The Ambassador in France (Straus) to the Secretary of State
[Received October 16.]
Sir: In my despatch No. 1248 of October 1, 1934, and my telegram No. 713 of October 1, 5 p.m.,69 I had the honor to report that the Ministry for Foreign Affairs felt that the degree of protection which the Government of the United States is prepared to accord to French geographic wine names’ is not sufficient to justify the suppression of the higher rates of the import turnover tax levied against American products imported into France. The Ministry therefore asked that the American Government consider a counter-proposal under the terms of which full relief for American products under the import turnover tax would be afforded in return for the granting by the American authorities of a tariff concession in favor of a single classification of French exports to the United States.
A note from the Ministry, dated October 8, has just been received, furnishing the French counter-proposal. The text and a translation of the note are appended hereto.70
The Ministry states, in effect, that while it appreciates that the American proposal would bring about an amelioration of the situation as regards the protection of French names of origin, it would still not afford protection consonant with that accorded under French law or under guarantees given by treaties with other states’. This being the case, and the suppression of the higher rates of the turnover tax on American products involving, it is stated, an annual loss to the French treasury of thirty millions of francs, the Ministry does not feel that the concession offered by the United States would compensate for the benefits asked of France.
In consequence, the Ministry suggests a new basis of negotiation. It offers to reduce the 2, 4 and 6 per cent import turnover tax to a uniform 2 per cent as regards all products subject thereto imported from the United States. In return it asks (in pointing out the deplorable conditions existent in the Calais district and the drop of exports of lace to the United States from 90 to 11 millions of francs in three years) that the Government of the United States reduce the duty on French laces by 50 per cent, or to a 45 percent ad valorem basis.
The Ministry earnestly hopes that its proposal may be given sympathetic study and expresses the belief that if an arrangement is reached upon the ground suggested a mutually profitable augmentation in the commerce of the two countries will surely result.
[Page 210]If the Department will consider any modification of the tariff on laces, I should like to be so informed. The Calais district, while apparently not of major importance industrially, appears to be politically of considerable importance. It is’ even conceivable that if the Department acquiesces in principle to some reduction in the tariff on laces, the Embassy may be able to trade that concession for greater concessions than the French Government now offers.
Respectfully yours,