710.G Commercial Agreement/75

The Secretary of State to the Chargé in Uruguay (Dominian)

No. 285

Sir: The Department has received the Legation’s telegram No. 71, of September 27, 11 a.m., regarding the agreement to refrain from invoking [Page 23]the obligations of the most-favored-nation clause in respect of certain multilateral conventions.

Your attention is called to the language of Article I,

“The High Contracting Parties, with respect to their relations with one another, will not … invoke the obligations of the most-favored-nation clause …”

In view of the fact that, by virtue of the underlined passage,15 Uruguay would not be bound to refrain from invoking the most-favored-nation clause in any treaty, unless the other party to the treaty, by virtue of its participation in the agreement under consideration, were also bound to refrain from the use of the clause, it is difficult to see why Uruguay should defer signing the agreement until after its signature by the economically powerful countries with which it is bound by bilateral treaties containing the unconditional most-favored-nation clause. It is believed, accordingly, that the position of the Uruguayan Government, as set forth in your telegram, is unnecessary. The Department feels that, on more complete explanation, the Government of Uruguay may be disposed to be numbered among the first of the signers of the Montevideo agreement.

You are accordingly authorized, on some favorable occasion, to discuss the matter further with the Uruguayan Government. In so doing, you should not fail to express the appreciation of this Government for the cooperation of Uruguay, referred to in your telegram, in the matter of the support of the action of the Belgian Delegation to the Assembly of the League of Nations.

According to a telegram, No. 273, of September 26, 1934, from the American Consulate at Geneva,16 the report of the Second Committee, containing reference to the Montevideo agreement, was adopted by the Assembly on September 26. Mr. Gilbert adds that in the course of the speech the Argentine Delegate called favorable attention to the Montevideo agreement. There was, however, no further discussion. The Department has not been informed concerning the exact language of the report, but an earlier telegram from Geneva indicates that it calls attention to the relationship between multilateral commercial treaties and the principle of the most-favored-nation clause and mentions, in this connection, the Montevideo agreement and its signature by the United States.

Very truly yours,

For the Secretary of State:
Sumner Welles
  1. Printed in italics.
  2. Not printed.