640.0031/133

Memorandum by the Economic Adviser ( Feis ) to the Secretary of State

Mr. Secretary: We have finally received the text of the new Convention between the Oslo States. A study of it seems to indicate that some of the apprehensions expressed in regard to it are unfounded. It may be summarized as follows:

(1) Belgium, Luxemburg and the Netherlands agree to impose no quantitative restrictions on a designated list of goods coming from territories of the signatory states and not to raise duties on these goods.

(2) Denmark, Finland, Norway, the Netherlands (for the Netherlands Indies) and Sweden agree not to raise duties on another list of designated commodities and not to impose any quantitative restrictions on commodities in this list which are now free of such restrictions.

(3) Nothing is said in the Agreement regarding the generalization of these arrangements. However, trade agreements rarely do. Our own reciprocal agreements contain no mention of generalization procedure. This multilateral accord on the other hand in no way restricts the right of any country to generalize this treatment. The only announcement on this subject is that coming from the Netherlands to the effect that it will generalize to Germany, Great Britain and the United States and in practice will probably withhold import licenses for products coming from non-signatory nations only to prevent dumping.

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I assume that some countries may withhold these concessions in states whose treatment of their commerce is regarded as discriminatory or unsatisfactory—a policy which may very well be justified.

It is to be noted that Article 6 furthermore provides:

“All States which did not sign the present Arrangement may adhere to it in conformity with the terms of an agreement to be reached to this effect between the latter and the other States which are already parties to the Arrangement.”

This is a method in accord with the principles advanced by the American Government at London and at Montevideo.

(4) On two points the Convention carries out ideas this Department has long regarded as being highly desirable.

(a) An agreement that with respect to preference given national products in governmental purchases, the governments will study present practices, and (b) they will give advance notice to each other of changes in their tariffs.

(5) One article the nature of which is somewhat obscure is the first half of Article 5: “The Governments of the signatory states have agreed to examine in common all measures susceptible of putting an end to practices of abnormal competition in foreign commerce interesting their country.” Wisely guided this concerted action might be used to discourage certain present forms of bilateral or blocked currency arrangements that do stimulate abnormal competition, and create disadvantages for countries trying to encourage the flow of trade on ordinary economic lines. It may be, however, that the signatory states have in mind protection against subsidies and dumping.

In summary, the Convention would seem to deserve our commendation.

H[erbert] F[eis]