The Secretary of State to the Minister in Estonia (Lane)2

No. 10

Sir: You are instructed to proceed to Tallinn at the earliest date possible for the purpose of delivering to the Estonian Minister for Foreign Affairs3 a signed note, the text of which is contained in the enclosure to this instruction, containing the reply of this Government to the proposals of the Estonian Government4 for modification of the present Treaty of Friendship, Commerce, and Consular Eights between the United States and Estonia.5

Before you deliver the note you will of course desire to familiarize yourself with the reports and the discussions relating to treatment of American trade in Estonia and the proposals for the modification of the existing treaty that have been made by the Estonian Government. It is assumed that the First Secretary of the Legation at Tallinn6 will go over the record with you, and that he will accompany you when you call upon the Minister.

In your conversation with the Minister you should apologize for the delay which has taken place in replying to the proposals that have been made by the Estonian Government. You should explain that the delay was occasioned in part by the very careful study which your Government has given to the proposals, and in part by the great volume of work devolving upon the Department in connection with the carrying out of the trade agreements program.

In amplification of the note which you will hand to the Minister you should state orally to him that your Government regrets exceedingly that the suggestions made by the Estonian Government do not [Page 260] appear to provide a basis for an agreement between the two countries embodying tariff concessions, but that it hopes that its position in this regard will not be interpreted as indicating any lack of appreciation of the difficulties inherent in the circumstances in which Estonia finds itself. You should make it clear that your Government shares the Estonian Government’s desire to increase commerce between the two countries and is hopeful that notwithstanding these difficulties a basis may be found for bringing about an augmentation of American-Estonian trade.

You should state further that should the Estonian Government find it possible to include in an agreement guarantees of substantially nondiscriminatory treatment for American trade, the United States Government would be disposed to consider the negotiation of a limited trade agreement containing concessions on some of the items in which the Estonian Government has expressed an interest and of which Estonia is an important, even though not a first supplier. Should the Minister ask you what commodities this Government has in mind, you may reply that while you have not been furnished with a list of the commodities which your Government considers as constituting a possible basis for discussion, you believe that from material which has been furnished you, it seems likely that potato alcohol and vodka are included.

It is hoped that you will be able to make arrangements for a discussion of the matter, after you have seen the Minister, with Mr. Edward Wirgo, Director of the Foreign Trade Bureau of the Estonian Foreign Office, along the lines of your conversation with the Minister.

Please report fully the result of your conversations with both officials and inform the Department promptly of any information you may obtain which would indicate the treatment that the Estonian Government intends to accord to American trade subsequent to May 22, 1937.

Very truly yours,

For the Secretary of State:
Francis B. Sayre

Draft of a Note to the Estonian Minister for Foreign Affairs

My Government has given careful study to the note of the Estonian Government dated December 20, 1935, containing proposals with regard to revision of the Treaty of Friendship, Commerce, and Consular Eights between the United States and Estonia. It desires to express its appreciation of the frankness with which the Estonian Government has set forth the considerations which influence the formulation [Page 261] of its foreign commercial policy. My Government fully understands these considerations and is not insensible of the limitations that are imposed on Estonia’s freedom of action within the sphere of foreign trade by the commercial policies pursued by countries which are the principal buyers of Estonian goods.

As was pointed out in the memorandum7 which the American Chargé d’Affaires at Tallinn delivered on September 27, 1935, to the Acting Minister for Foreign Affairs, the American Government is engaged in a program under the Trade Agreements Act8 looking, on the one hand, to the reduction of excessive tariff barriers and other governmental impediments to trade and, on the other hand, to the progressive elimination of the many discriminatory and arbitrary practices which divert and obstruct trade. This program is based upon the principle of equality of opportunity and treatment; a principle to which the Estonian Government has declared itself unable to give full adherence except under conditions which may not soon be fulfilled. The Estonian Government will doubtless appreciate that the successful carrying out of my Government’s program would be jeopardized should the American Government agree to any substantial exception in the application of this basic principle, for such an agreement would necessarily involve tacit approval of the very practices which the United States is seeking to eliminate. The United States could not enter into a trade agreement which did not provide substantial equality of treatment for American trade.

My Government has noted with sympathetic interest the desire expressed by the Estonian Government to expand Estonian exports to the United States and is prepared to afford every facility compatible with its general policies that would contribute to realization of that desire. The Estonian Government has suggested that this expansion can be achieved only if the United States is prepared to offer tariff concessions to Estonian products, and it has expressed its desires in this connection with regard to certain specific commodities.

These desires, and the suggestion of the Estonian Government that certain quotas be established for which reduced tariff rates would be granted, have been examined with great care by my Government. I must, however, point out that, as the Estonian Government is aware, it is my Government’s policy to grant concessions in general only to the principal or an important supplier of a given commodity. On the basis of information available to my Government, Estonia does not appear to be the principal or even an important supplier of most of the articles for which reduced customs duties in the United States are suggested, and in some instances it does not participate in the [Page 262] trade at present. Six of the commodities with respect to which the Estonian Government has proposed tariff concessions have already been made the subject of concessions in trade agreements with countries which are the principal sources of imports into the United States. The benefits of these concessions are extended to Estonia at the present time by virtue of existing treaty provisions. In the case of certain other products in which the Estonian Government has expressed an interest, Estonia is among the major sources of supply of United States imports. These commodities might furnish a basis for discussion of trade concessions of limited scope should it be possible to arrive at an agreement respecting provisions of a general nature guaranteeing substantially non-discriminatory treatment by each country of the commerce of the other.

My Government wishes again to draw the attention of the Estonian Government to the fact that Estonia is now receiving the benefit of tariff and other concessions granted by the United States to countries with which it has concluded trade agreements. Estonia will continue to receive these benefits and the benefits of concessions in any new agreements which may be concluded by the United States, provided it accords substantially nondiscriminatory treatment to American trade.

The Government of the United States is heartily in accord with the desire of the Estonian Government to seek additional means for the expansion of trade between the two countries and will give sympathetic consideration to any further suggestions which the Estonian Government may wish to make to this end.

  1. The Minister was accredited to Estonia, Latvia, and Lithuania, with residence at Riga, until August 9, 1937. A separate Minister was appointed to Lithuania on August 23, 1937.
  2. Dr. Fr. Akel.
  3. Foreign Relations, 1935, vol. ii, p. 199.
  4. Signed December 23, 1925, ibid., 1925, vol. ii, p. 70.
  5. Walter A. Leonard.
  6. Foreign Relations, 1935, vol. ii, p. 190.
  7. Approved June 12, 1934; 48 Stat. 943.