611.6831/150

The Minister in Greece ( MacVeagh ) to the Secretary of State

No. 412

Sir: With further reference to my despatches Nos. 260 of May 26th, 270 of June 9th, 289 of June 26th, and 295 of July 3d, I have the honor to enclose a copy of an Aide-Mémoire which I handed to the Foreign Minister at my first opportunity after his return from abroad, covering a conversation which I had with him as to the benefits to be derived under the new Tariff Reciprocity Act and the possibility that such benefits might be denied to Greece under existing conditions.

During our conversation, Mr. Maximos stressed with apparent anxiety the fact that the Greek Government has given careful and generally favorable answers to this Legation’s various protests of discrimination. I had anticipated such a reaction on his part and, as the Aide-Mémoire shows, I thanked him and assured him of our appreciation, but went on to say that the many difficulties of all sorts encountered by American trade under the present Greek system of control of imports by barter restrictions, import licenses and the like, seemed in their totality to constitute a very real form of discrimination and thus might be construed, in the words of the Tariff Act, “as tending to defeat the purpose of the Act,” thus excluding Greece from favorable consideration under its provisions. Mr. Maximos promised to consider carefully all that I said and to take my Aide-Mémoire under his personal advisement, deferring further conversations to a later date.

It is of course possible that the Foreign Minister’s reply to this démarche will only be a reiteration of his government’s official most-favored-nation attitude toward American trade. But inasmuch as he has expressed himself definitely as being in favor of a new commercial treaty with the United States, the knowledge on his part of how deeply we may explore the situation before considering such a [Page 564] treaty may render the administration of present Greek regulations more sensitive to American interests, and that in itself will be something gained.

Respectfully yours,

Lincoln MacVeagh
[Enclosure]

The American Minister ( MacVeagh ) to the Greek Minister for Foreign Affairs ( Maximos )

Aide-Mémoire

The American Minister had the honor to be received by His Excellency, the Hellenic Minister for Foreign Affairs, and referred to a letter which he had written to Mr. Maximos dated May 21st, 1934, in reply to which the Foreign Minister had verbally expressed his willingness to discuss with the American Minister the general situation at present affecting trade between the United States of America and Greece.

In this connection Mr. MacVeagh begged leave to call the attention of Mr. Maximos to the principle guiding present American commercial policy, particularly as expressed in the recent Tariff Reciprocity Act, of which he handed Mr. Maximos a copy. The new American commercial policy, Mr. MacVeagh said, is based on the reasoning that increasing world trade is a better remedy for depression than trade barriers designed to equalize trade as between different sets of countries. The Tariff Reciprocity Act gives concrete expression to this policy. Under its terms the benefits which will flow to foreign countries from agreements to be worked out in accordance with its provisions are to be applied on the basis of unconditional most-favored-nation treatment, subject, however, to the important proviso that the President may withhold these benefits from any country because of its discriminatory treatment of American commerce, or other acts or policies which in his opinion tend to defeat the purposes of the Act.

Mr. MacVeagh told Mr. Maximos that he hoped the Hellenic authorities would give careful attention to this new American attitude as he was deeply desirous that the Tariff Reciprocity Act should open the way to increased commerce between Greece and the United States to the benefit of both countries. At the present time, he was sorry to say, he was under the constant necessity of reporting to his Government certain difficulties attending American commerce with Greece which might be construed as defeating the purposes of the Act. He thanked Mr. Maximos for his considerate handling of special cases of discrimination in violation of the Modus Vivendi of 1924, as they had from time to time been brought to his attention, but added that he hoped it would soon be possible for him to inform Washington that [Page 565] Greek import quota restrictions and barter requirements no longer constitute the actual, even if unintentional, barriers to American commerce which they do at present.

Mr. MacVeagh called the Foreign Minister’s attention to the fact that Greek import quotas are restricting severely the importation of certain American products, notably motor trucks, passenger cars, tires, dye stuffs, iron and steel bars, and wire, though quotas for certain of these products and for many others have been increased on numerous occasions for imports from countries with which Greece has favorable clearing balances.

He further pointed out that Greece has subjected to compulsory barter all imports of a considerable number of commodities. This, he said, involves little more than a matter of bookkeeping in the case of countries with which Greece has barter agreements, but virtually excludes imports of these articles from the United States. As examples he cited fresh and dried fruit, builders’ hardware, rubber sundries, and toilet preparations. It is true that private clearing transactions may be authorized in these cases but in practice this method is not only very difficult from a business standpoint but frequently involves long delays in obtaining official approval, thus deterring importers from importing American goods who are otherwise eager to do so. In addition, official approval is not infrequently withheld entirely or made contingent upon the choice of some Greek product for exportation which is almost unsaleable in the United States at the time.

Mr. MacVeagh also called the Foreign Minister’s attention to the fact that Greece has made the importation of numerous products subject to obtaining a special permit for each individual shipment. As examples in which the United States is particularly interested, he named machinery and flour. The Greek Government, he said, undoubtedly does not intend any regulation of this kind to act as a screen for preferential treatment of other countries, such as those with which Greece has clearing agreements, or in which she has blocked credits. But in practice, he said, the delays and uncertainties involved in obtaining entry permits for American goods discourage their importation and inevitably throw much business into other hands.

In conclusion, Mr. MacVeagh said that the obstacles thus placed, in one way or another, in the path of American products entering Greece, appear to constitute in their entirety a very real form of discrimination, in spite of the fact that American trade is precious to the Greek Government, as he had reason to believe from conversations already enjoyed with the Foreign Minister. From these conversations, he felt that Mr. Maximos agreed with him that trade should be encouraged between the two nations, and therefore he hoped that the Foreign Minister would inform him shortly of his government’s views on [Page 566] a matter which must enter into any consideration of benefits to accrue to Greek trade with the United States under the Tariff Reciprocity Act of 1934.