Memorandum by the Special Assistant to the Secretary of State and Chief of the Division of Western European Affairs ( Dunn )

Mr. Sayre asked me to come to his office this morning when he received the Italian Ambassador and handed to him the original of a statement, a copy of which is hereto attached,4 informing the Ambassador definitely that it was the conviction of this Government that consideration of negotiations for an American-Italian trade agreement should be suspended for the present.

The Ambassador stated that he had expected to be informed along these lines and had so notified his Government as a result of his last conversation with Mr. Sayre on the subject. He said further that he had drawn some comfort from a remark made by Mr. Hickerson5 during the last conversation which was held on the subject in Mr. Sayre’s office to the effect that the American Government did not contemplate making any change in its present policy of extending the most-favored-nation treatment to Italian trade and asked Mr. Sayre if that was still the intention of this Government. Mr. Sayre replied that we had no intention of making any change in the treatment of Italian products at this time. When Mr. Rosso inquired what Mr. [Page 342] Sayre meant by “at this time”, Mr. Sayre explained that our policy was to extend the most-favored-nation treatment to those countries who were not discriminating against American trade and that as the Ambassador at the previous interview had stated that Italy was not discriminating against American goods, if such were the case, there would be no occasion to change our treatment of Italian goods.

The Ambassador inquired as to the particular American products or commodities the treatment of which by Italy had up to a short time ago given rise to the charge in this country that our goods were being discriminated against as far as concerned their entry into Italy. Mr. Sayre stated that he would be able to furnish specific instances of such discrimination as it had been practised in the past, if the Ambassador so desired. The Ambassador said that it might be helpful if the question were to arise to have specific instances which he might report to his Government.

The Ambassador then went on to explain that measures which might have had the effect of discriminating against American goods had been put into effect in Italy during the recent period of economic tension just prior to the beginning of the present war situation as a result of economic and financial necessity and also because of pressure brought to bear upon Italy by England and other nations in an effort to obtain a balance of trade. Mr. Sayre thereupon explained the purpose and intent of our present effort to bring about a reduction of obstructions and impediments in international trade, with the principles of which the Ambassador expressed his entire agreement.

James Clement Dunn
  1. Infra.
  2. John D. Hickerson, Assistant Chief of the Division of Western European Affairs.