611.6531/336: Telegram

The Ambassador in Italy ( Phillips ) to the Secretary of State

533. My 523, December 11, 7 p.m. At the meeting yesterday the remaining articles of the Italian text of the commercial treaty were handed us thus completing the preliminary explanation of the Italian views. In general these articles show slight differences in principle but of course contain many variations in the method of application, some extensive and others minor. Rather than submit the entire Italian text by cable I am transmitting only the Italian version of articles 6 and 8 which contain the most important differences. The remaining articles together with comment will follow by mail unless you wish me to cable them.

Article 6. It was explained that the Italian delegation could not accept the American proposal. Efforts had been made to modify it to conform to the Italian nationality laws but this had not been found possible and the proposed substitute represents the only solution which seems possible of incorporation in a treaty of this nature. Giannini recalled that negotiations relating to a separate protocol to settle pending citizenship questions between the United States and Italy had already been undertaken and had been unsuccessful. Text follows.

Article 6.

Italian citizens within the United States of America and citizens of the United States of America in Italy will be exempt from all obligations of military service without prejudice to the obligations which according to the public law of either of the states remain or arise in the case of the abandonment, the acquisition or the resumption of nationality. They will be likewise exempt from all forms of compulsory, official, judiciary, administrative or municipal functions and will be exempt from all forms of requisitions or military payments such as forced loans and any special extraordinary contributions imposed in the future or for other exceptional circumstances.

The charges relating to the possession or to the leasing of real property in connection with military services and requisitions to which the nationals and citizens of the most-favored nations may be subject in their capacity as owners, lessors or lessees of real property are excepted.

[Page 359]

Article 8. The Italian delegation seems most conciliatory and desirous of finding a formula which will be practical of application according to the present Italian system and yet conform to the principles of the American draft. Text follows.

Paragraph 1. “Each of the high contracting parties undertakes to accord to the other high party immediately and unconditionally all advantages, privileges, favors and immunities conceded or which may be conceded in the future to a third country either with regard to the amount, the collection (and) the guarantee of duties and charges (including all accessory and additional duties and charges and coefficients and increases) relating to importation, exportation, deposit, transit, temporary importation and exportation or with regard to customs formalities, the system of levying such duties and charges, the laws and regulations pertaining to the sale (and) taxation and use of imported goods.”

Paragraph 2. No change except the words “and coming from” are added to the phrase, “originating in.”

Paragraph 3. “If one of the high contracting parties establishes restrictions or control on importation or exportation and if such restrictions or control effect products in which the other high contracting party has a considerable interest it shall immediately communicate to the latter the provisions adopted.

In case the limitation of importation or exportation is established on the basis of a share of the total importation or exportation for a fixed period of time the party which has adopted the measure shall: Either assure for the importation of the corresponding products originating in and coming from the other high contracting party or for the exportation of its corresponding products to the other party a share of the total quantity or value admitted for importation or exportation in the proportion of the importation from or exportation to the other high party affected in the period used as a basis to the total importation or exportation for such period or if such procedure is not practicable the two high contracting parties will come to an agreement for estimating the quantity or value within the limits of which the party which has adopted the limitation shall admit the importation of products originating in and coming from the other high party or shall allow their exportation to the other high party.”

The committee illustrates its meaning as follows: If on the total imports from all countries of a certain product, “A”, a quota is established equal, for example, to 60% of the total imports of “A” in a basic year then the imports of “A” from the United States will be allowed equal to 60% of the imports of “A” from the United States in the basic year.

  • Fourth Paragraph. No change except that the sentence beginning “Each high contracting party shall be guided” is changed to read “if the other contracting party considers that such restrictions or control may damage its interests as compared with the manner in which the interests of third countries are treated it may demand the initiation [Page 360] of conversations in order to agree upon suitable measures to insure the transfer of sums paid by purchasers as the price of its importations effected within the agreed-upon limits.”
  • Fifth Paragraph. No change.
  • Final paragraph is omitted from the Italian text as it is thought to consolidate principles already enunciated in article 7 and the preceding paragraphs of this article.

It was agreed to reserve discussion both of the preamble and of article 20 for later study in view of special considerations which will have to be raised in connection therewith. With regard to the preamble it is apparent that the Italians will insist upon using the title of King Emperor in the treaty. For your information. In this respect the recent British commercial agreement surmounted this difficulty by being in the form of an agreement between the two Governments without mention of the titles of the sovereigns.

The Italians explain that the question of the extension of the treaty as provided in article 20 to the colonies is now being studied but that no conclusion has been reached.

A memorandum containing suggestions for eventual incorporation into a subsequent and separate trade agreement has also been handed us to show what the Italians have in mind for trade negotiations when the commercial treaty has been concluded. Text follows by mail.29

Phillips
  1. Despatch not printed.