611.6531/282
Memorandum by the Assistant Chief of the Division of Western European Affairs (Culbertson)
Conversation Between the Italian Ambassador, Mr. Sayre, Mr. Grady and Mr. Culbertson
Ambassador Rosso came in this morning and stated that he had received a long telegram from his Government with regard to the trade agreement matters and the proposal which Mr. Sayre had made to him on July 17, 1935, with regard to the denunciation of Articles 6 and 24 of the Treaty of 1871. The Ambassador then proceeded to read the substance of the pertinent sections of the telegram he had received. His statement, taken down verbatim, is attached hereto.27 He added that the telegram from his Government stated that further and more detailed telegraphic instructions with regard to the denunciation of Articles 6 and 24 would be forwarded shortly.
In the discussion which followed Mr. Sayre brought out two principal facts: (1) that we were disappointed that the Italian Government had not been prepared to indicate a willingness to agree on a mutual approach to the denunciation of Articles 6 and 24, and that he hoped that the Italian Government might find its way clear to agree to this action and the taking of such a step in the very near future, in order that the matter might be laid before the Senate, and thus the ground could be cleared for the forthcoming trade agreement discussions. Mr. Sayre stated that of course we would take no action in the matter until the Ambassador had received the promised telegraphic instructions from his Government.
(2) That in undertaking trade agreement negotiations with Italy it would be our expectation that Italy would be prepared to accept and apply the principle of most-favored-nation treatment; that while we recognize the problems confronting Italy, we are going forward with a program which we feel is in the best interests of all nations of the world, and that while we recognize that some countries, such as Italy, may not be in a position to abandon quota restrictions, we nevertheless feel that the United States must be accorded equal treatment in the allocation of all quotas, such equality to be determined by granting to the United States a share of all global quotas proportionate to the share of the trade which the United States enjoyed prior to the adoption of quota restrictions. Mr. Sayre added that it would not be our concern what the Italian Government did with the balance of the global quotas. Mr. Grady brought out at this point that where quotas [Page 538] were not extended on a proportionate basis to us there resulted a diversion of trade and we were particularly concerned in avoiding such developments. Mr. Grady also added that we would like to have the Italian Government’s reaction to our general provisions, which sometime since had been submitted to the Italian Embassy, and that it would be found that in those provisions were set forth the general principles and policies which we felt were essential to a satisfactory trade agreement.
Ambassador Rosso indicated that he felt that this question of proportionate quotas, particularly in Respect of industrial items, would be a difficult one to overcome; that his Government was rather inclined to look upon the practical results than upon the principle that all quotas should be accorded on a most-favored-nation basis. He cited the figures with regard to trade to be found in the attached statement, it being his feeling apparently, and he seemed to be reflecting his Government’s attitude, that so long as Italy continued to purchase any substantial amounts from the United States, we should not be inclined to stand on principle alone.
As he prepared to leave the Ambassador said that he would telegraph to his Government the substance of his conversation with Mr. Sayre, and wondered just what Mr. Sayre thought he might say. Mr. Sayre answered by stating that he might bring out in his telegram that we regret very much that the Italian Government has not seen its way clear so far to go along with the proposal that there be mutual agreement with respect to the denunciation of Articles 6 and 24 of the Treaty of 1871; that we would of course take no action pending the receipt of further detailed instructions which had been promised the Ambassador; but that we hoped that the reasons which the Italian Government might put forward would not make it impossible for us to reach such a mutual agreement at an early date.
During the discussion Ambassador Rosso reiterated that he was authorized by his instructions to proceed with the exchange of desiderata. He said that he had the Italian list of desiderata, and while he supposed he should turn it over to us only at the time we are prepared to hand him our list of desiderata, he personally did not attach much importance to the simultaneous exchange of lists. He left with Mr. Sayre in a private and confidential way a copy of the list which he would present to us officially when we are prepared to give him our list of requests. This list of desiderata is attached to this memorandum.28