611.60F31/118
Memorandum by the Assistant Chief of the Division of Trade Agreements (Hawkins)
| Conversation: | Mr. Kabeláč, |
| Mr. Williamson,26 | |
| Mr. Hawkins |
Mr. Kabeláč called to inquire what the prospects were of opening negotiations for a trade agreement with Czechoslovakia. He indicated in the course of the discussion that the Czechoslovak Government and Czechoslovak exporters were anxious to insure the continued generalization of our trade agreement concessions to products of Czechoslovakia. They apparently feel that their position is an uncertain and unstable one in view of the fact that the modus vivendi concluded last spring is a purely provisional and temporary arrangement. Mr. Kabeláč stated that he had discussed with Mr. Grady on several occasions the possibility of opening trade agreement negotiations and that Mr. Grady had said that Czechoslovakia would be one of the first European countries with which new negotiations were instituted.
[Page 155]We informed Mr. Kabeláč that we were now studying the situation with a view to determining whether a basis for successful negotiations exists. We pointed out to him that the preferences by Czechoslovakia to countries in the Danubian area present certain difficulties from our standpoint; that these exceptions to the most-favored-nation clause are being recognized temporarily in the existing modus vivendi but that the present agreement itself indicates that such recognition is only temporary pending an opportunity to work out some adjustment of the matter. We pointed out further that our policy is one of most-favored-nation treatment and that naturally we desire that exceptions to the most-favored-nation clause be reduced to a minimum; and that the whole question was being studied with a view to working out some formula which would afford a more or less permanent solution to this question. We informed Mr. Kabeláč further that this and other questions needed to be fully studied by us and that we would probably want to enter into exploratory discussions with his Government before any definite announcement of intention to negotiate a trade agreement is issued in order to assure ourselves that a basis for a satisfactory agreement can be found.
With reference to Mr. Grady’s statement regarding the opening of negotiations with Czechoslovakia we informed Mr. Kabeláč that what Mr. Grady undoubtedly intended was that Czechoslovakia would be one of the first European countries with which the possibility of opening negotiations would be explored; that there could, of course, be no commitment actually to open negotiations until we had assured ourselves that a basis therefor exists. Mr. Kabeláč stated that this coincided with his understanding of Mr. Grady’s statement; that he was quite clear that all Mr. Grady intended to say was that Czechoslovakia would be among the first countries considered.
- David Williamson of the Division of Western European Affairs.↩