611.5431/158

Memorandum by the Chief of the Trade Agreements Section (Grady)

The Swiss Minister3 called upon me at the suggestion of the Secretary to inquire why Switzerland was put on the list of countries which discriminate against American trade.4 He was under the impression that his country was not discriminating and he asked me for something specific as to the nature of Switzerland’s discriminations. I pointed out that these were largely the result of the use of bargaining quotas by Switzerland and that these were discriminatory in a number of instances. He stated that his Government was operating on a different system from ours and so the criteria of discrimination might be hard to determine. I pointed out that where quotas result in a diversion of business from one country to another, the case is clear for discrimination. I said that it was our aim in the trade agreements to have quotas extended to us on the basis of a representative period. While a representative period may be subjected to differences of opinion, it is possible to arrive at a definition of a representative period which is fair to the various suppliers in a particular market. I said that we were not attempting to change the system of any country in connection with trade agreements with them, but simply to get agreement on certain principles that would insure the non-diversion of a fair share of the other countries’ trade—fair share to be determined on the basis of a representative period rather than on bargaining quotas. We had already given to the Minister a set of our general provisions which he has sent to his Government and which I feel sure they will understand.

The Minister said that he felt that he understood our position and our policies and that his Government was looking forward to the consummation of a satisfactory trade agreement with us.

Henry F. Grady
  1. Marc Peter.
  2. See letter from President Roosevelt to the Secretary of the Treasury, April 1, 1935, Department of State, Press Releases, April 6, 1935, p. 216.