611.60h31/35
The Acting Secretary of
State to the Yugoslav Minister (Fotitch)
Washington, December 17, 1936.
Sir: I have the honor to refer to recent
informal conversations between yourself and officers of the Department
concerning those problems of Yugoslav-American trade relations that have
grown out of
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the control
measures of the Yugoslav Government affecting imports from the United
States, and to submit herewith, for consideration by your Government,
alternative proposals looking to the regularization of the trade
relations of our two countries.
The first proposal is in the form of a draft modus
vivendi which would assure fair and equitable treatment to the
commerce of each State in the territory of the other. It is my earnest
hope that this proposal will commend itself to your Government as it
embodies the liberal principles in support of which the commercial
policy of the United States Government, under the Act of Congress of
June 12, 1934,13 was
formulated.
The commercial policy of the United States Government, which has found
expression in trade agreements concluded with fifteen countries during
the two and a half years in which the Act of June 12, 1934, has been in
force has a twofold objective. On the one hand, it aims to reduce tariff
barriers and the many other impediments against which international
commerce in recent years has been forced to struggle. On the other, it
seeks to reduce and progressively to eliminate the maze of
discriminatory and arbitrary practices which now distort and strangle
trade and to substitute in their stead an order based upon the principle
of equality of treatment.
[Here follows an extensive review of the trade agreements program of the
United States and of the restrictive commercial measures adopted by a
number of countries.]
It is the most earnest hope of the United States Government that the
Government of the Kingdom of Yugoslavia will decide to lend its active
support to the commercial program here recommended and that in
consequence it will conclude that the modus
vivendi submitted herewith affords an acceptable basis for the
future of Yugoslav-American trade relations.
The alternate proposal submitted herewith is embodied in a draft
agreement to set aside certain Articles of the Treaty of Commerce
between the United States of America and Serbia, signed at Belgrade
October 2–14, 1881, and in a draft of an exchange of notes setting forth
the desire of our two governments to re-establish mutual trade relations
on the basis of unconditional most-favored-nation treatment at the
earliest possible moment.
This proposal is based upon recognition by the Government of the United
States that the preferential and discriminatory practices employed by
some governments today have grown out of concrete problems and
difficulties, that the trade of the countries which have resorted to
them or have been forced by other countries to adopt them may have come
to depend to a certain degree upon them and that they
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are in a number of instances expressed in
commitments that cannot immediately be terminated. It is thought, if
such considerations are controlling in the case of Yugoslavia, and your
Government therefore is unable to accept the proposed modus vivendi, that it is desirable from the standpoint of
both the Government of Yugoslavia and the Government of the United
States of America that the contractual obligations between the two
States be brought in harmony with existing fact. In this connection it
should be repeated that the United States Government considers that,
having due regard to its international obligations, it should withhold
the benefits of equal treatment under its trade agreements program from
nations which do not in turn grant equal treatment to it.
I may say in conclusion that the Government of the United States believes
that the program which it is pursuing, of negotiating bilateral
agreements based upon the principle of non-discriminatory treatment,
offers the surest course by which trade barriers can be reduced and the
process of abandoning discriminatory practices be initiated and carried
forward. The fact that Yugoslavia participated in the Sixteenth Assembly
of the League of Nations which adopted a resolution on September 28,
193514 giving full support to this program
leads me to believe that your Government will accord sympathetic
consideration to the views set forth in this communication and to hope
that the trade problems between our two States will be speedily resolved
in a manner calculated to foster and improve the trade relations between
our two countries.
Accept [etc.]
[File copy not signed]
[Enclosure 1]
Draft “Modus Vivendi” Between the United States
and Yugoslavia
Sir: I have the honor to make the following
statement of my understanding of the agreement reached through
recent conversations held at Washington by representatives of the
Government of the United States of America and the Government of the
Kingdom of Yugoslavia with reference to the treatment which the
United States of America shall accord to the commerce of the Kingdom
of Yugoslavia and which the Kingdom of Yugoslavia shall accord to
the commerce of the United States of America.
These conversations have disclosed a mutual understanding between the
two Governments which is that:
- 1.
- In respect of import, export and other duties and charges
affecting commerce, as well as in respect of transit,
warehousing and other
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facilities, the United States of
America will accord to the Kingdom of Yugoslavia and the
Kingdom of Yugoslavia will accord to the United States of
America, its territories and possessions, unconditional
most-favored-nation treatment.
- 2.
- Accordingly, it is understood that with respect to customs
duties or charges of any kind imposed on or in connection
with importation or exportation, and with respect to the
method of levying such duties or charges, and with respect
to all rules and formalities in connection with importation
or exportation, and with respect to all laws or regulations
affecting the sale or use of imported goods within the
country, any advantage, favor, privilege or immunity which
has been or may hereafter be granted by the United States of
America or the Kingdom of Yugoslavia to any article
originating in or destined for any third country, shall be
accorded immediately and unconditionally to the like article
originating in or destined for the Kingdom of Yugoslavia or
the United States of America, respectively.
- 3.
- In the event either country establishes or maintains
import or customs quotas, or other quantitative
restrictions, or any system of foreign exchange control, the
share of the total permissible importation of any product or
of the total exchange made available for importation of any
product of the other country shall be equal to the share in
the trade in such product which such other country enjoyed
in a previous representative period.
- 4.
- Neither the United States of America nor Yugoslavia shall
regulate the total quantity of importations into its
territory or sales therein of any article in which the other
country has an interest, by import licenses or permits
issued to individuals or organizations, unless the total
quantity of such article permitted to be imported or sold,
during a quota period of not less than three months, shall
have been established, and unless the regulations covering
the issuance of such licenses or permits shall have been
made public before such regulations are put into
force.
- 5.
- The advantages now accorded or which may hereafter be
accorded by the United States of America or the Kingdom of
Yugoslavia to adjacent countries in order to facilitate
frontier traffic, and advantages resulting from a customs
union to which either the United States of America or the
Kingdom of Yugoslavia may become a party, shall be excepted
from the operation of this Agreement.
- 6.
- It is understood that the advantages now accorded or which
may hereafter be accorded by the United States of America,
its territories or possessions, the Philippine Islands, or
the Panama Canal Zone to one another or to the Republic of
Cuba shall be excepted from the operation of this
Agreement.
- 7.
- Nothing in this Agreement shall be construed as a
limitation of the right of either country to impose on such
terms as it may see fit
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prohibitions or restrictions (1)
imposed on moral or humanitarian grounds; (2) designed to
protect human, animal or plant life; (3) relating to
prison-made goods; (4) relating to the enforcement of police
or revenue laws; or (5) relating to the control of the
export or sale for export of arms, ammunition, or implements
of war, and, in exceptional circumstances, all other
military supplies.
- 8.
- Nothing in this Agreement shall be deemed to affect the
rights and obligations arising out of the Treaty of Commerce
between the United States of America and Serbia, signed at
Belgrade October 2–14, 1881.
- 9.
- The present Agreement becomes operative on this . . . . .
day of . . . . . . ., . . ., and shall continue in force
until superseded by a more comprehensive commercial
agreement or by a definitive treaty of commerce and
navigation, or until denounced by either country by advance
written notice of not less than thirty days.
Accept, Sir, the renewed assurances of my highest consideration.
[Enclosure 2]
Draft Agreement Setting Aside Certain Provisions
of the Treaty of Commerce Between the United States of America
and Serbia, Signed October 2–14, 1881
The undersigned duly authorized representatives of the United States
of America and the Kingdom of Yugoslavia on behalf of their
respective Governments have reached the following agreement:
- Article 1. As from the effective
date of this agreement, and so long as the Government of the
Kingdom of Yugoslavia shall maintain, directly or
indirectly, any governmental measure by virtue of which the
commerce of the United States is prevented from sharing in
the Yugoslav market for any article or product in accordance
with its proportionate participation therein during a
previous representative period, Articles VI, VII and IX of
the Treaty of Commerce between the United States of America
and Serbia, signed at Belgrade October 2–14, 1881, and which
was made applicable to the Kingdom of Yugoslavia by the note
of September 29, 1921,15 from the Yugoslav Chargé d’Affaires ad
interim at Washington, shall be without force and
effect.
- Article 2. The two Governments
shall agree by an exchange of notes as to the time when
Articles VI, VII and IX of the Treaty of October 2–14, 1881,
shall again have full force and effect.
- Article 3. The present agreement
shall be ratified and shall become effective on the
thirtieth day after the exchange of ratification, which
shall take place at Belgrade as soon as possible.
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Done in duplicate, in the English and French languages, both
authentic, at the City of Washington this . . . . . day of . . . . .
. ., 1937.
[Enclosure 3]
Draft of Exchange of Notes to Accompany
Agreement Setting Aside Certain Provisions of the Treaty of
Commerce Between the United States of America and Serbia, Signed
October 2–14, 1881
Sir: I have the honor to refer to the
agreement signed today between the Government of the United States
of America and the Government of the Kingdom of Yugoslavia providing
for the suspension of Articles VI, VII and IX of the Treaty of
Commerce between the United States of America and Serbia, signed at
Belgrade October 2–14, 1881, and which was made applicable to the
Kingdom of Yugoslavia by the note of September 29, 1921, from the
Yugoslav Chargé d’Affaires ad interim at Washington.
The conversations leading to this agreement have disclosed a mutual
desire on the part of the Government of the United States of America
and the Government of the Kingdom of Yugoslavia to reestablish the
trade relations between their respective countries on the basis of
unconditional most-favored-nation treatment at the earliest possible
moment. In harmony with this identity of views the two Governments
have decided to consult together in advance should either Government
contemplate the adoption of any new measures of trade control which
might adversely affect the mutual trade relations of the two States.
The purpose of such consultation shall be the protection of the
mutual trade of the two States from such barriers to the exchange of
goods as may hinder an early return to the unconditional
most-favored-nation treatment as a basis for the trade relations
between the two States.
Accept, Sir, the renewed assurances of my highest consideration.
