The Chargé in Estonia ( Carlson ) to the Secretary of State

No. 452 (Diplomatic)

Sir: I have the honor to refer to the Department’s signed instruction to the Tallinn Legation No. 36, dated September 9, 1935, concerning [Page 196] the desire of the Estonian Government to modify the present Treaty of Friendship, Commerce and Consular Rights between the United States and Estonia as of May 22, 1936.

The Department is hereby advised that those provisions in the above instruction which refer to the delivery of a signed note to the Estonian Minister for Foreign Affairs expressing the readiness of the Government of the United States to enter into negotiations with Estonia for the revision of the above-mentioned Treaty were carried out on September 27, 1935. There is attached hereto a memorandum34 covering the conversation which took place on the above occasion with the Acting Estonian Minister for Foreign Affairs, Mr. J. Mtiller, and the Assistant Estonian Minister for Foreign Affairs, Mr. H. Laretei. It has subsequently been learned that the modifications to the above treaty to be proposed by the Estonian Government will be ready for delivery to the Tallinn Legation on or about October 8, 1935. A copy thereof will be forwarded to the Department immediately upon receipt34a together with a copy of the Legation’s signed note of September 27, 1935,34 in which the information contained in the Department’s instruction under reference was transmitted to the Estonian Minister for Foreign Affairs.

The Legation has read with great care the above-mentioned instruction of September 9, 1935, and, in particular, those sections thereof which suggest that discussions be arranged with the Estonian officials directly charged with the negotiations of the new Treaty with the United States. In accordance with this suggestion the Legation has had conversations with the following Estonian officials:

Mr. Edward Wirgo, the Director of the Foreign Trade Bureau of the Estonian Ministry for Foreign Affairs.
Mr. R. Mickwitz, the Chief of the Bureau of Treaties of the Estonian Foreign Office.
Mr. K. Selter, the Estonian Minister for Economic Affairs.
Mr. A. Tuhk (Gutmann), the Director of the Bureau of Commerce of the Estonian Ministry for Economic Affairs.
Mr. H. Laretei, the Assistant Estonian Foreign Minister.

Summaries of the statements made to the Legation by the above-mentioned Estonian officials concerning their views of the approaching commercial treaty negotiations with the United States are contained in enclosures to the present despatch.35 The Legation’s general impression of the Estonian attitude towards the above subject as reflected in its conversations with the Estonian officials in question is that there seems to be an apparent willingness on the part of [Page 197] some of these officials to accept the most-favored-nation principle as suggested by the American Government as the basis for the coming negotiations. Three of the persons questioned, i. e., Mr. Wirgo, Mr. Selter and Mr. Laretei, appeared to be quite ready to agree along general lines with the American viewpoints concerning foreign trade. The remaining two—Mr. Mickwitz and Mr. Tuhk (Gutmann) seemed to be somewhat in doubt as to the possibility of fitting most-favored-nation treatment for foreign trade as suggested by the United States into the existing Estonian foreign trade program.

In general, it already appears to be clear that Estonia will probably take the statements which are contained in the memorandum which is mentioned on page 2 of the Department’s instruction to this office of September 9, 1935, and of which a copy was handed to the Estonian Foreign Office on September 27, 1935, as the basis for the modifications which it is to propose in the existing Treaty of Friendship, Commerce and Consular Eights between the United States and Estonia. At the same time it seems to be equally clear, however, that in these modifications the Estonian Government will endeavor to change the wording of certain of the articles suggested by the United States for inclusion in the modified Treaty in such a way as to correspond to the existing Estonian foreign trade system.

Furthermore, the Legation is practically convinced that the Estonian authorities will insist upon the inclusion in the modified treaty of a list of Estonian commodities on which customs duty reductions are to be requested from the Government of the United States. It is believed that Estonia’s readiness to enter into a commercial treaty with the United States upon a most-favored-nation basis will depend in very large part on the attitude to be taken by the United States towards the Estonian request for customs duty reductions.

On the other hand, the Legation also believes that the question of the interpretation of most-favored-nation treatment in respect to American commodities seeking admission to the Estonian markets is likely to cause difficulties. As has been pointed out by the Legation in despatches and reports concerning the subject of American-Estonian trade relations, Estonia’s foreign trade policies are determined to a very large extent by the dominating positions occupied by Great Britain and Germany in Estonia’s export trade. It is felt that, despite the apparent existence of a sincere desire on the part of Estonia to accord equitable treatment to American products entering its territory, it will be very difficult for Estonia to carry this wish out in practice as long as it continues to adhere to its present system which calls for the bilateral balancing of commodity exchanges with all countries. It now remains to be seen whether Estonia will be prepared to make an exception in this respect in behalf of the United States.

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Further observations on the above subject will be made at the time of the submission to the Department of the Estonian suggestions for a modified commercial treaty with the United States. These are, as already stated, expected to be forthcoming in the very near future.

Respectfully yours,

H. E. Carlson
  1. Not printed.
  2. See despatch No. 527, December 20, infra.
  3. Not printed.
  4. None printed.