The Department of State to the Czechoslovak Legation
It will be recalled that on March 29, 1935, a temporary commercial arrangement between Czechoslovakia and the United States was arrived at by an exchange of notes.2
Subsequent to the exchange of notes which constitute the present temporary commercial modus vivendi between the United States and Czechoslovakia, proposals were made by the Czechoslovak Legation to the end that negotiations might be undertaken looking to the conclusion of a trade agreement which would involve mutual reduction in the barriers to Czech-American commerce. As a result of the close study given to these proposals, the American Government felt that there were certain features of the Czechoslovak commercial policy which required clarification before a decision could be reached. Consequently, on November 27, 1935, an aide-mémoire was presented to the Czechoslovak Minister in Washington,3 in which certain considerations were set forth.
It is now apparent that the considerations presented in that aide-mémoire have in the main been clarified. The American Government notes with satisfaction the improvement which the Czechoslovak Government has made in its treatment of American trade and the assurances which it has given that certain practices which have caused this Government concern will be modified.
In the meantime, the American Government, animated by a sincere desire to accede to the wish of the Czechoslovak Government to proceed with the negotiation of a trade agreement, has been giving serious study to the possibilities of an agreement which would offer opportunities for a substantial expansion of trade between the two countries. [Page 239] It considers that the time is now opportune for the initiation of negotiations for such an agreement.
This Government feels, however, that such a trade agreement should contain more specific provision than is contained in the present modus vivendi with respect to the preferential treatment which may be accorded by Czechoslovakia to the trade of certain countries of southeastern Europe. As the Czechoslovak Government has already been informed, the American Government considers the provisions of the present modus vivendi regarding preferences to certain countries unsatisfactory as a permanent basis for its relations with Czechoslovakia. This Government would, therefore, appreciate an indication from the Czechoslovak Government whether, during the course of negotiations for a trade agreement, the latter Government will be disposed to define and limit the preferences it may wish to reserve the right to accord in derogation of most-favored-nation treatment, using as a basis for discussion the principles enumerated in the aide-mémoire of November 27, 1935.
During the course of the negotiations the United States will propose the inclusion in the trade agreement of certain general provisions different from the ones in the modus vivendi on matters other than those having to do with the preferences to southeastern European countries.
Furthermore, it may be appropriate to acquaint the Czechoslovak Government with the procedure which the United States now follows in the negotiation of a trade agreement under the Trade Agreements Act.4 Exploratory conversations such as those which are now being carried on between Czechoslovakia and the United States precede a preliminary public announcement that the negotiation of a trade agreement is contemplated. Such an announcement includes the statement that at a later date public announcement will be made in this country of the articles under consideration as subjects for concessions to be granted to the other country. This second announcement constitutes a formal invitation to our domestic interests to submit briefs with respect to the listed articles and sets a date for public hearings before the Committee for Reciprocity Information. Meanwhile, it is expected that negotiations will be actively proceeding with respect to the general provisions as well as the reciprocal concessions with a view to the conclusion of an agreement as soon as practicable following completion of the above mentioned public hearings in this country, which the Trade Agreements Act requires. The foregoing, of course, involves only our own procedure here and does not involve this Government’s making public announcement, prior to the conclusion [Page 240] of an agreement, of the products on which we would seek concessions from the other country.
If the Czechoslovak Government is disposed to accept the proposed basis for discussion of the Danubian preferences and has no objection to the procedure followed by the United States in the negotiation of a trade agreement, as briefly outlined above, the Government of the United States will be prepared to initiate conversations and to make preliminary announcement that the negotiation of a trade agreement is contemplated, to be followed as soon as possible by formal announcement of intention to negotiate accompanied by a list of products under consideration as subjects for concession to Czechoslovakia.