611.5831/207

Memorandum by the Chief of the Treaty Division (Barnes)

The Minister of Sweden has called upon the Chief of the Treaty Division several times in regard to the negotiation of a reciprocity agreement between the United States and Sweden. At the present time there is not a commercial treaty of any kind in force between the two countries.

The Minister of Sweden states that he has been authorized by his Government to enter upon the negotiation of a reciprocity agreement if the outlook is good for the conclusion of a beneficial agreement. He states that an agreement would not be satisfactory if subsequent thereto action should be taken by the United States under the National Industrial Recovery Act restricting the importation of Swedish products embraced within the agreement. He therefore requests that the question be considered whether an informal assurance might be given to him that during the life of such a reciprocity agreement as might be entered into no action would be taken by the United States under the National Industrial Recovery Act inimical to the importation of Swedish products. Section 3(e) of the act authorizes the President under certain circumstances to limit the importation of articles, place conditions upon them or subject them to certain fees. The Minister of Sweden names particularly wood pulp and news print as the articles with reference to which he would desire to receive an informal assurance before beginning negotiations. At the present time wood pulp and news print are on the free list and about three times as much of each article is imported into the United States as is produced therein. This dependence of the United States upon the foreign production of these articles may furnish sufficient reason for making them an exception from action under Section 3(e) of the National Industrial Recovery Act. It may be that the same question will be raised with reference to other articles of Swedish production after negotiations have advanced.

The Minister of Sweden does not ask for a definite written assurance at this time that action will not be taken under the National Industrial [Page 731]Recovery Act but for an oral statement as a condition precedent to beginning negotiations that this Government is favorably inclined toward giving the assurance. It may be that the formulation of a definite stipulation to be included in the signed reciprocity agreement will be undertaken if this Government finds the proposal to be acceptable.

It appears that the proper procedure with reference to the request made by the Minister of Sweden is that it be taken up by the Executive Commercial Policy Committee.

Charles M. Barnes