Memorandum by the Assistant Chief of the Division of Trade Agreements (Hawkins)

Conversation: Dr. Ferdinand Veverka, Minister of Czechoslovakia;
Mr. Otakar Kabeláč, First Secretary of the Legation;
Mr. Harry C. Hawkins;
Mr. Paul Culbertson.16

The two main subjects discussed were (1) the removal of Czechoslovakian preferences to non-Danubian countries; in other words, carrying out the terms of the agreement; (2) Danubian preferences.

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With reference to (1) the Minister was informed that the revision of the agreement in so far as it concerns preferences to non-Danubian countries probably will create no difficulty; the question being merely one of carrying out the terms of the agreement as it now stands. In any case, any revision of the agreement on this point would be only of a technical nature designed to cover instances of preferences to non-Danubian countries of special kinds not now covered by the terms of the agreement.

With reference to preferences to Danubian countries, the question discussed was whether and the extent to which such preferences could be recognized by the United States. Since the present agreement permits unlimited preferences to Danubian countries, and since this is not considered to be a satisfactory permanent arrangement, the agreement must be revised on this point. In order to facilitate discussions, the Minister said he would submit a list of such preferences as the Czechoslovakian government desired to reserve, indicating specifically in each case the extent of the desired preference. He indicated that if a list of permitted preferences is agreed upon, the Czechoslovakian government would like to add a clause to the effect that other preferences to Danubian countries might be granted provided this was done in agreement with this Government. If the foregoing procedure were followed, the third and fourth paragraphs of section 4 of the existing commercial agreement would be omitted and in place thereof there would be a provision whereby Czechoslovakia would reserve the right to grant certain specified preferences only, subject however to the provision that if it is desired to grant any new preferences, this would be done only with the agreement of the United States.

In connection with the list of products on which Danubian preferences might be permitted, the Minister indicated that Czechoslovakia would probably wish to grant such preferences on apples, prunes and lard. It was pointed out to him that these are, of course, products of real importance to the United States and that it would be difficult for us to agree to continue preferences on them. Nevertheless we informed the Minister that in order to have a basis for discussion we will be glad to receive and give careful study to any list he may submit.

  1. Assistant Chief, Division of Western European Affairs.