Memorandum by the Assistant Secretary of State (Sayre)

The Yugoslav Minister1 called to see me at 12 o’clock on December 3, 1935. After exchanging a few general remarks, Mr. Fotitch informed me that he had been instructed by his Prime Minister,2 upon coming to America, to broach the subject of a possible trade agreement with the United States.3 He desired, therefore, to ascertain the attitude of the United States with regard to a possible trade agreement.

I replied to Mr. Fotitch that my Government was interested in such a trade agreement and hoped that the time would come when we might enter into a mutually advantageous agreement. I said, however, that there were two reasons why the time did not seem to me opportune just now to enter into such negotiations. In the first place, since we are already engaged in active negotiations with many countries, our negotiators could not well take on an additional country and, no matter how anxious we might be, physical limitations would prevent. In the second place, I explained to the Minister something of our political difficulties, stating that we had just completed the Canadian trade agreement4 under which we make certain agricultural concessions to Canada and that, as a result, the farm lobbies, which are powerful in this country, are threatening to make trouble. It would not be wise, therefore, at this time to undertake negotiations with another country whose interests are primarily agricultural, with the possible exception [Page 818] of Argentina with which we agreed months ago to undertake negotiations at the earliest possible moment. For these reasons I suggested that, although we hoped that the day would come when we could undertake negotiating a trade agreement with Yugoslavia, the present time does not seem opportune.

I next explained to Mr. Fotitch that Yugoslavia would profit in the meantime by our generalizing to it such trade concessions as we make to other countries in our trade agreements, provided that Yugoslavia should not discriminate against American trade. I then explained to him the situation which had developed with regard to Czechoslovakia resulting in our exchange of notes with that country,5 each undertaking to extend most-favored-nation treatment to the other. Mr. Fotitch then asked me whether his Government might expect to continue to receive generalizations from us and I replied that it might so long as it did not discriminate against American trade. He asked whether we saw any evidence of such discrimination. I replied that I should be very happy to look into the matter and, after I had had a chance to study the situation, to discuss the matter with him again. He said that he should be very glad indeed to do so. I asked him whether his Government would like to enter into an exchange of notes as the Czechoslovak Government had done. He replied that he had no instructions as to this but he presumed that his Government would be glad to do so. I said that I should be glad to discuss this whole matter with him after I had made the promised study.

He also spoke of the very substantial discrepancies in the statistics of trade between Yugoslavia and the United States as published by the two Governments. I said that doubtless this would be accounted for in large part by trans-shipments through the free German ports or otherwise. He said that he trusted that these discrepancies in the figures would be borne in mind in our investigation.

F[rancis] B. S[ayre]
  1. Constantin Fotitch.
  2. Milan Stoyadinovitch.
  3. The Yugoslav Minister had already conversed on November 12, 1935, with Wallace S. Murray, Chief of the Division of Near Eastern Affairs, concerning the possibility of regular conversations at some expedient date for the negotiation of a trade agreement between the United States and Yugoslavia (611.60h31/19¼). He also raised this subject during his meeting with the Secretary of State on December 10, 1935 (611.60h31/20).
  4. See Foreign Relations, 1935, vol. ii, pp. 18 ff. For text of the agreement signed on November 15, 1935, see Executive Agreement Series No. 91, or 49 Stat. 3960.
  5. See Foreign Relations, 1935, vol. ii, pp. 137 ff. For text of the notes signed on March 29, 1935, see Executive Agreement Series No. 74, or 49 Stat. 3674.