611.5531/540a: Telegram

The Secretary of State to the Ambassador in Belgium (Morris)

19. Your 8, February 9, 1 p.m. This question of the labor safeguard clause came up during the trade agreement negotiations, but due to the numerous difficulties which arose in connection with arriving at an agreement, the problem was not fully explored. It was understood at the time that the clause in question was designed to prevent the importation of partially assembled cars which could easily be made into complete units. Complaint has now been received from one American company to the effect that finished axle shafts at least will not benefit from the new duties. Automotive interests here feel that to refuse the lower rates to parts for replacement minimizes to an appreciable degree the benefits expected to arise from the concession made. While I can understand the position of the Belgian Government in its desire to aid Belgian labor, I do feel that the labor safeguard clause should be applied in a reasonable way, and only when it appears that efforts are being made to get in partially assembled cars [Page 121] in an effort to avoid payment of the higher rates on assembled automobiles.

Please talk this over with the appropriate authorities and see whether some satisfactory arrangement cannot be reached.