Memorandum by the Assistant Secretary of State (Sayre)

The Italian Ambassador called to say good-by and to have a last few words before he left about the commercial relations between our two countries. After various pleasant remarks, he inquired about the chances of going forward with a trade agreement. I answered that it did not seem possible as yet to formulate a definite program. I said that during the next few months, when the campaign is at its height, we would be very busily engaged in preparing statistics and studies showing the actual effect of our trade agreements to date, and that during the winter months we would be quite busy in going to Congress to secure a reenactment of the present Trade Agreements Act7 which expires next June. I said that the result of the election next November would have a material bearing on our trade agreement activities and that until those results are known we cannot wisely plan our program of activity. In other words, I said to the Ambassador that we were not in a position at this time to say when we would be ready to enter into more active negotiations with Italy.

I went on to say that when the time came to discuss the continuance of negotiations for a trade agreement the vital problem, to my mind, would be how to find a formula which would enable the two countries to negotiate a successful trade agreement in view of the conditions and regime existing in Italy and in view of the United States policy of negotiating only on a basis of equality of treatment. I explained again, as we have several times before, that the United States is convinced that the only way of preventing economic chaos throughout the world is through a world-wide program of trading based upon equality of treatment and that if the system of trading in preferences and discriminations prevails no hope lies ahead. I said that naturally the United States could not, under any conditions, abandon the program of equality of treatment for which it is fighting. The Ambassador said that he quite understood. I said that the primary problem which we would have to face in negotiating a trade agreement is not unlike the problem which we are facing today vis-à-vis Germany; that Italy is pursuing a policy which has many resemblances to the German policy, and that a successful trade agreement between Italy and the United States would depend upon Italy’s finding a way to grant to the United States equality of treatment not only with respect to tariff rates but also with respect to quota restrictions and particularly with respect to allocations of foreign exchange.

In connection with the general matter of commercial and other relationships, I also mentioned the fact that in my own personal opinion [Page 344] the existing treaty of 1871 between Italy and the United States8 no longer meets present conditions and requirements and that, in view of the greatly changed conditions, the two Governments ought to consider negotiating a more modern treaty which would better serve present day needs. I raised the question whether the two Governments should not give serious consideration to such a revision, and suggested that this was a matter which I hoped might be looked into when Mr. Suvich reaches Washington9 and Mr. Phillips reaches Rome in the fall.10 Mr. Rosso raised no objection to this idea. The Ambassador then bade me a warm good-by and we parted with warm wishes on both sides.

F. B. Sayre
  1. Approved June 12, 1934; 48 Stat. 943.
  2. Treaty of Commerce and Navigation concluded February 26, 1871, William M. Malloy (ed.), Treaties, Conventions, etc., Between the United States of America and Other Powers, 1776–1909 (Washington, Government Printing Office, 1910), vol. i, p. 969.
  3. Signor Suvich was received as Italian Ambassador to the United States, October 20, 1936.
  4. William Phillips, accredited to Italy as Ambassador August 4, 1936.