611.5131/1663: Telegram

The Acting Secretary of State to the Ambassador in France (Bullitt)

557. Your 1228, December 10, 6 p.m. The French Ambassador called on Mr. Sayre this morning and stated that he had been instructed by his Government to propose an arrangement which would be outside the trade agreement and which would be consummated by an exchange of notes whereunder France would extend to the United States for the calendar year 1937 certain supplementary quotas in exchange for which France would ask for certain reduction in American tariffs.

Mr. Sayre replied by saying that even if we were inclined to take up additional bargaining at this time any new arrangement could only be arrived at in accordance with the provisions of the Trade [Page 99]Agreements Act, which provides for public hearings and proclamation by the President. He further stated that we were not interested in discussing the possibilities of an additional agreement; that we are now studying the effects of French devaluation upon the agreement which was negotiated last spring; that we are under very considerable pressure from domestic manufacturers and from American exporters to give notice in accordance with the provisions of paragraph 4 of article 11 of the existing agreement,26 that the statistics which we have so far gathered are not complete and therefore we are not in a position to determine just how the agreement is working; that should it be found that because of French devaluation American exports to France of the items covered in the trade agreement are substantially less than was anticipated when the agreement was signed, and if imports increase unduly we will find it very difficult to avoid taking action under the fourth paragraph of article XI: that in order for us to withstand pressure for termination it is up to the French Government to take such measures unilaterally as may be found necessary in order that American exporters are able to fill their quotas as bargained under the present agreement.

Moore
  1. Executive Agreement Series No. 146, p. 17.