The Department of State to the French Embassy
The Government of the United States has studied with great care the proposals of the French Government received on November 165 and November 29 , 1935.6 It has also taken this opportunity to [Page 88]review comprehensively the whole position of the negotiations which have now been in progress for several months. In view of the importance of concluding the negotiations at the earliest possible date, the Government of the United States believes it to be highly desirable that each Government should now indicate its position with respect to the various matters under discussion in the light of the exchanges of views that have taken place between the two Governments. For its own part, and in order to facilitate the process of negotiation, the Government of the United States has the honor to submit herewith an annotated statement7 of the mutual concessions and assurances which, in its opinion, should be embodied in the proposed Agreement, together with detailed comments thereon.
An examination of the statement attached to this Aide-Mémoire will readily reveal the fact that the Government of the United States has gone far toward meeting and in some respects has fully met the desires expressed by the French Government. This is especially true of (1) reductions of customs duties on the four principal articles exported by France to the United States, the importance of duty concessions on which has been particularly stressed by the French Government and with respect to which the Government of the United States has hitherto found it difficult to meet very closely the viewpoint of the French Government; and (2) deviation, in several important respects, from established policy of the United States, in order to meet the exceptional difficulties confronting the French Government at the present time in the field of commercial policy.
The French Government will undoubtedly appreciate the fact that in effecting drastic reductions in the customs duties imposed at the present time on the articles mentioned above and in agreeing to important deviations from its established policy, the Government of the United States would make far-reaching concessions. This Government is confident, therefore, that the French Government will equally appreciate the fact that these concessions can be made only if this Government’s own requests are satisfactorily met by the French Government.
The specific points on which differences of view still exist between the two Governments are examined in detail in the statement attached to this Aide-Mémoire. The general principles involved may be summarized as follows:
As an exceptional measure, the Government of the United States is prepared to modify its established policy in three important respects in order to meet the French viewpoint. In the first place, while consolidation of concessions granted under trade agreements during the life of such agreements is one of the major principles of [Page 89]the trade agreements program of this Government, nevertheless, because of the difficulties of the French Government in this regard, the Government of the United States is prepared with respect to tariff duties to suspend the application of this principle in the case of the Agreement with France. In the second place, with respect to quota treatment, this Government is restricting its requests very largely to protective provisions. In the third place, this Government is prepared, notwithstanding that its established policy contemplates the reciprocal granting of unrestricted and unconditional most-favored-nation treatment, to agree to a list of products to which the most-favored-nation clause will not apply.
But while this Government is prepared to deviate materially from its own established policy in order to meet the French viewpoint in these important respects, and thus to afford the French Government extreme liberty of action, it cannot dispense with at least a minimum measure of safeguard, especially since for its own part it does not reserve a similar liberty of action. The Government of the United States is fully appreciative of the fact that, in the present exceptional circumstances, the French Government finds it necessary, in the event that unforeseen circumstances should require such action, to be in a position to increase customs tariff rates on some products which are of special interest to the United States. But it feels that such unilateral revision of trade concessions and treatment must at least be made subject to (1) automatic termination of the Agreement in the event that changes in French treatment of certain important American exports to France should, in the opinion of the Government of the United States, tend to nullify the advantages of the Agreement to the United States; (2) minimum advance notice to the Government of the United States regarding proposed revisions in order to facilitate adjustments that would remove jeopardy to the entire agreement; and (3) provision that revisions should not be made at frequent intervals in order that trade should enjoy at least minimum periods of certainty as regards tariff rates.
While the Government of the United States is anxious to take into full account the position in which the French Government finds itself, it must request similar consideration of its position on the part of France. In the opinion of this Government, the safeguards above indicated would detract but little from the essential freedom of action which the French Government wishes to reserve. On the other hand, their omission from the proposed Agreement would place American commerce in France in so precarious a position as to render it extremely difficult for this Government to justify the drastic reductions in important duty rates applying to imports from France which are requested by the French Government. Moreover, omission of such [Page 90]safeguards would render it impossible to reconcile the Agreement with the policy adopted by this Government and embodied in all of the trade agreements already concluded by the United States. Such omission would render difficult, if not impossible, continued application of this policy to future agreements. It would, therefore, jeopardize vital commercial interests of the United States in other countries as well as in France.
As regards the list of products to which the most-favored-nation clause will not apply, the Government of the United States feels that such a list inscribed in the Agreement under negotiation should not differ substantially in character from similar lists of exceptions inscribed in such commercial treaties as those concluded by France with the United Kingdom and Switzerland.
In presenting this Aide-Mémoire, the Government of the United States takes full account of the exchanges of views which have taken place between the two Governments, and is now making every effort not only to extend to the maximum the concessions it is prepared to accord French trade, but to limit the concessions which it seeks from the French Government to a bare minimum compatible with the far-reaching advantages that would accrue to France as a result of the proposed Agreement.
The French Government has expressed to the Government of the United States its sincere desire to enter into a trade agreement with the United States. This Government, animated by precisely the same desire, is convinced that an Agreement embodying the mutual concessions and assurances set forth in the statement attached to this Aide-Mémoire represents a mutually advantageous arrangement, which will be of great benefit to the trade of both countries and of the world at large. It hopes sincerely that the French Government will give favorable consideration to this proposal.