Foreign Relations of the United States Diplomatic Papers, 1935, The British Commonwealth; Europe, Volume II

611.5231/1044a

Draft Trade Agreement Between the United States and Spain, October 23, 1935

October 23, 1935

Preamble

The President of the United States of America and the President of Spain, being desirous of strengthening the traditional bonds of friendship between the two countries by establishing the principles of equality of treatment as the basis of commercial relations and by granting mutual and reciprocal concessions and advantages for the promotion of trade, have through their respective Plenipotentiaries arrived at the following Agreement:

Article I

Articles the growth, produce or manufacture of the United States of America, enumerated and described in Schedule I annexed²⁶ to this Agreement and made a part thereof, shall, on their importation into Spain be exempt from ordinary customs duties in excess of those set forth in the said Schedule, and they shall also be accorded complete unconditional most-favored-nation treatment as provided in Article III of this Agreement. The said articles shall not be subject on their importation into Spain to any other duties, taxes, fees, charges or exactions, than of those fixed for each article in the said Schedule.

Article II

Articles the growth, produce or manufacture of Spain, enumerated and described in Schedule III annexed²⁷ to this Agreement and made a part thereof, shall on their importation into the United States of America, be exempt from ordinary customs duties in excess of those set forth in the said Schedule, and they shall also be accorded complete unconditional most-favored-nation treatment as provided in Article III of this Agreement. The said articles shall also be exempt from all other duties, taxes, fees, charges or exactions, imposed on or in connection with importation, in excess of those imposed on the day of the signature of this Agreement or required to be imposed thereafter under laws of the United States of America in force on the day of the signature of this Agreement.

Article III

With respect to customs duties and charges of every kind imposed on or in connection with importation or exportation, and with respect to the method of levying such duties or charges, and with respect to all rules and formalities in connection with importation or exportation, and with respect to all laws or regulations affecting the sale or use of imported goods within the country, articles the growth, produce or manufacture of Spain, and those articles the growth, produce or manufacture of the United States of America which are enumerated and described in Schedule III annexed²⁷ to this Agreement and made a part thereof, will be granted immediately and unconditionally any advantage, favor, privilege or immunity which has been or may hereafter be granted by the United States of America or Spain, respectively, to the like articles originating in or destined for any third country.

Article IV

The Government of Spain agrees that it will place no obstacles in the way of the sale of American cotton or tobacco, including cigarettes, in Spain. It further agrees that in those years when the importation of wheat is permitted, it will permit the importation into Spain of a fair and equitable share from the United States.

Article V

Articles the growth, produce or manufacture of the United States of America or Spain, shall, after importation into the other country, be exempt from all internal taxes, fees, charges or exactions other or higher than those payable on like articles of national origin or any other foreign origin.

Article VI

If the Government of the United States of America or Spain establishes or maintains any form of quantitative restriction or control of the importation or sale of any article in which the other country has an interest, or imposes a lower import duty or charge on the importation or sale of a specified quantity of any such article than the duty or charge imposed on importations in excess of such quantity, the Government taking such action will:

(a) Give public notice of the total quantity, or any change therein, of any such article permitted to be imported or sold or permitted to be imported or sold at such lower duty or charge, during a specified period;

(b) Allot to the other country for such specified period a share of such total quantity as originally established or subsequently changed in any manner equivalent to the proportion of the total importation of such article which such other country supplied during a previous period, unless it is mutually agreed to dispense with such allotment. The period selected shall be such as to result in a fair and equitable allotment.

Article VII

No prohibitions, import or customs quotas, import licenses, or any other form of quantitative regulation, whether or not operated in connection with any agency of centralized control, shall be imposed by Spain on the importation or sale of any article the growth, produce or manufacture of the United States of America enumerated and described in Schedule I, nor by the United States of America on the importation or sale of any article the growth, produce or manufacture of Spain enumerated and described in Schedule II. The provisions of this Article shall not apply to prohibitions or restrictions specifically provided for in Schedule I of this Agreement, or imposed in connection with State monopolies of a purely fiscal character designed solely to secure to the State the maximum revenues obtainable from the importation, production or sale of a particular product.

Article VIII

In the event that the Government of the United States of America or the Government of Spain establishes or maintains a monopoly for the importation, production or sale of a particular commodity or grants exclusive privileges, formally or in effect to one or more agencies to import, produce or sell a particular commodity, the Government of the country establishing or maintaining such monopoly, or granting such monopoly privileges, agrees that in respect of the foreign purchases of such monopoly or agency the commerce of the other country shall receive fair and equitable treatment. To this end it is understood that in making its foreign purchases of any product such monopoly or agency will be influenced solely by those considerations, such as price, quality, marketability, and terms of sale, which would ordinarily be taken into account by a private commercial enterprise interested solely in purchasing such product on the most favorable terms.

Article IX

The tariff advantages and other benefits provided for in this Agreement are granted by the United States of America and Spain to each other subject to the condition that if the Government of either country shall establish or maintain, directly or indirectly, any form of control of foreign exchange, the commerce of the other country shall be accorded fair and equitable treatment.^*

Article X

In respect of articles the growth, produce or manufacture of the United States of America or Spain enumerated and described in Schedules I and II, respectively, imported into the other country, on which ad valorem rates of duty, or duties based upon or regulated in any manner by value, are or may be assessed, the bases and methods of determining dutiable value and of converting currencies shall be no less favorable to importers than the bases and methods prescribed under laws and regulations of Spain and the United States of America, respectively, in force on the day of the signature of this Agreement.

Article XI

The Government of each country will accord sympathetic consideration to, and when requested will afford adequate opportunity for consultation regarding, such representations as the other Government may make with respect to the operation of customs regulations, quantitative restrictions or the administration thereof, the observance of customs formalities, and the application of sanitary laws and regulations for the protection of human, animal, or plant life. Laws, regulation of administrative authorities and decisions of administrative or judicial authorities of the United States of America or Spain, respectively, pertaining to the classification of articles for customs purposes or to rates of duty, shall be published promptly in such a manner as to enable traders to become acquainted with them.

In the event that the Government of either country makes representations to the Government of the other country in respect of the application of any sanitary law or regulation for the protection of human, animal, or plant life, and if there is disagreement with respect thereto, a committee of technical experts on which each Government shall be represented shall, on the request of either Government, be established to consider the matter and to submit recommendations to the two Governments.

Whenever practicable each Government, before the application of any new measure of a sanitary character, or before any new application of an existing sanitary measure, will consult with the Government of the other country with a view to injuring that there will be as little injury to the commerce of the latter country as may be consistent with the purpose of the proposed measure. The provisions of this paragraph do not apply to actions affecting individual shipments under sanitary measures already in effect or to actions based on pure food and drug laws now in force.

Article XII

1. Nothing in this Agreement shall be construed to prevent the adoption of measures prohibiting or restricting the exportation or importation of gold or silver, or to prevent the adoption of such measures as either Government may see fit with respect to the control of the export or sale for export of arms, ammunition, or implements of war, and, in exceptional circumstances, all other military supplies.

2. Subject to the requirement that there shall be no arbitrary discrimination by either country against the other country in favor of any third country where similar conditions prevail, the provisions of this Agreement shall not extend to prohibitions or restrictions relating to public security; imposed on moral or humanitarian grounds; designed to protect human, animal or plant life, except as specifically provided elsewhere in this Agreement; relating to prison-made goods, or relating to the enforcement of police or revenue laws.

3. It is understood that, except as specifically provided elsewhere in this Agreement, the provisions thereof do not affect the application of measures directed against misbranding, adulteration and other fraudulent practices, such as are provided for in the pure food and drug laws of either country, or the application of measures directed against unfair practices in import trade.

4. The provisions of this Agreement relating to the treatment to be accorded by the United States of America or Spain to imported products the growth, produce or manufacture of the other country shall not apply to coal, coke manufactured therefrom, or to coal or coke briquettes.

Article XIII

Except as otherwise provided in the second paragraph of this Article, the provisions of this Agreement relating to the treatment to be accorded by the United States of America and Spain, respectively, to the commerce of the other country, shall not apply to the Philippine Islands, the Virgin Islands, American Samoa, the Island of Guam or to the Panama Canal Zone; nor to the Spanish possessions or the Spanish Zone of the Protectorate of Morocco.

The provisions of this Agreement regarding most-favored-nation treatment shall apply to articles the growth, produce or manufacture of any territory under the sovereignty or authority of the United States of America or Spain, imported from or exported to any territory under the sovereignty or authority of the other country. It is understood, however, that the provisions of this paragraph do not apply to the Panama Canal Zone.

The advantages now accorded or which may hereafter be accorded by the United States of America, its territories or possessions or the Panama Canal Zone to one another or to the Philippine Islands, or to the Republic of Cuba, shall be excepted from the operation of this Agreement.

This Agreement shall not apply to the advantages which Spain has granted or hereafter may grant to its possessions, or to Portugal, or to the Spanish Zone of the Protectorate of Morocco.

Article XIV

In the event that the Government of the United States of America or the Government of Spain adopts any measure which, even though it does not conflict with the terms of this Agreement, is considered by the Government of the other country to have the effect of nullifying or impairing any object of the Agreement, the Government which has adopted any such measure shall consider such representations and proposals as the other Government may make with a view to effecting a mutually satisfactory adjustment of the matter.

Article XV

1. If, in extraordinary and abnormal circumstances the Spanish Government considers it necessary for the protection of the fundamental economic and financial interests of the country to increase the duties on those commodities in Schedule I which are listed in Schedule IV annexed²⁹ to this Agreement and made a part thereof, it shall notify the Government of the United States of America of its intention, and shall specify a period of not less than thirty days for discussion before such action is taken with a view to reaching an agreement with respect thereto and with respect to such compensatory modifications of the terms of this Agreement as may be deemed appropriate. If at the end of the specified period a satisfactory agreement has not been reached, the Spanish Government shall be free to make such increase in duty but the present Agreement shall terminate automatically thirty days after the day on which such increase becomes effective. The results of such discussion shall be made public promptly, and public notice shall be given as far as possible in advance of the effective date of any action which may be taken by either Government under the provisions of this paragraph.

2. Notwithstanding the provisions of Article VII the Government of each country reserves the right to impose quantitative restrictions on the importation or sale of any article the growth, produce or manufacture of the other country enumerated and described in Schedules I and II, respectively, in conjunction with Governmental measures operating to regulate or control the production, market supply, or prices, or tending to increase the labor costs of production, of like domestic articles; or such quantitative restrictions as may be necessary in extraordinary or abnormal circumstances to protect the fundamental economic or financial interests of the country. Whenever the Government of either country proposes to establish or change any such restriction, it shall give notice thereof in writing to the other Government and shall afford such other Government an opportunity within thirty days after receipt of such notice to consult with it in respect of the proposed action; and if an agreement with respect thereto is not reached within thirty days following receipt of the aforesaid notice, the Government which proposes to take such action shall be free to do so at any time thereafter, and the other Government shall be free within fifteen days after such action is taken to terminate this Agreement in its entirety on thirty days’ written notice.

3. With respect to Article IX, the Government of each country will give sympathetic consideration to any representation which the Government of the other country may make to the effect that it is not receiving fair and equitable treatment in the allotment of the available foreign exchange, and if, within thirty days after the receipt of such representations, a satisfactory adjustment has not been made or an agreement has not been reached with respect to such representations, the Government making them may, within fifteen days after the expiration of the aforesaid period of thirty days, terminate this Agreement in its entirety on thirty days’ written notice.

4. In the event that a wide variation occurs in the rate of exchange between the currencies of the United States of America and Spain, the Government of either country, if it considers the variation so great as to prejudice the industries or commerce of the country, shall be free to propose negotiations for the modification of this Agreement or to terminate this Agreement in its entirety on thirty days’ written notice.

5. The Government of the United States of America and the Government of Spain reserve the right to withdraw or to modify the concession granted on any article under this Agreement, or to impose quantitative restrictions on any such article if, as a result of the extension of such concession to third countries, such countries obtain the major benefit of such concession and in consequence thereof an unduly large increase in importations of such article takes place: Provided, That before the Government of either country shall avail itself of the foregoing reservation, it shall give notice in writing to the other Government of its intention to do so, and shall afford such other Government an opportunity within thirty days after receipt of such notice to consult with it in respect of the proposed action; and if an agreement with respect thereto is not reached within thirty days following receipt of the aforesaid notice, the Government which proposed to take such action shall be free to do so at any time thereafter, and the other Government shall be free within fifteen days after such action is taken to terminate this Agreement in its entirety on thirty days’ written notice.

Article XVI

The present Agreement shall come into full force on the thirtieth day following proclamation thereof by the President of the United States of America and the President of Spain, or should the proclamations be issued on different days, on the thirtieth day following the date of the later in time of such proclamations, and shall remain in force for the term of one year thereafter, unless terminated pursuant to the provisions of Article XV. The Government of each country shall notify the Government of the other country of the date of its proclamation.

Unless at least six months before the expiration of the aforesaid term of one year the Government of either country shall have given to the other Government notice of intention to terminate this Agreement upon the expiration of the aforesaid term, the Agreement shall remain in force thereafter, subject to termination under the provisions of Article XV, until six months from such time as the Government of either country shall have given notice to the other Government.

In witness whereof the respective Plenipotentiaries have signed this Agreement and have affixed their seals hereto.

Done in duplicate, in the English and Spanish languages, both authentic, at the City of Washington this . . . . . . . . . .

For the President of the United States of America:

For the President of Spain:

26. Not printed.
27. Not printed.
27. Not printed.
28. First paragraph of exchange article as approved by T.A.C. and submitted to Spanish Ambassador: The tariff advantages and other benefits provided for in this Agreement are granted by the United States of America and Spain to each other subject to the condition that if the Government of either country shall establish or maintain, directly or indirectly, any form of control of foreign exchange, it shall administer such control so as to insure that the nationals and commerce of the other country shall be accorded fair and equitable treatment in the allocation of exchange and that the benefits of this trade agreement shall not be impaired by the manner in which foreign exchange control is being administered. [Note in the original.]
29. Not printed.