711.652/127a: Telegram

The Secretary of State to the Ambassador in Italy (Phillips)

183. Department’s 15439 and 177 of September 2, and November 22. In order that traders may be relieved of uncertainty as to the customs treatment of imports from Italy after December 15, we feel that it is imperative to work out some temporary arrangement immediately which will govern Italo-American commercial relations during the interval between the date on which the treaty of 1871 terminates and the date on which the proposed new treaty comes into force.

Accordingly, if you perceive no objection you are requested to address a note to the Minister of Foreign Affairs in the following language:

“Inasmuch as the treaty of commerce and navigation between the United States and Italy, signed at Florence, February 26, 1871, which will terminate on December 15, 1937, in consequence of the joint notice of denunciation of December 15, 1936,40 provides for most favored nation treatment in customs matters and negotiations for a new treaty to replace it have not been completed, it seems desirable that steps be taken now to determine the treatment which will be accorded by each country to the commerce of the other during the interval between the date on which the treaty of 1871 will terminate and the date on which the proposed new treaty will come into force.

“In the course of the negotiation of the proposed new treaty, the Governments of the two countries have tentatively agreed upon the provisions of Article VIII thereof which deals with customs duties, import prohibitions and restrictions, import licenses, exchange control, and monopolies affecting imports and is annexed hereto.

“If the Government of Italy will in fact apply the provisions of Article VIII of the proposed new treaty on and after December 15, 1937, the Government of the United States will continue to accord to articles the growth, produce or manufacture of Italy the benefits of the minimum rates of the American tariff as established in its trade agreements with other countries (Cuba excepted), until 30 days after notice by either party of its intention to discontinue such treatment.

“It is understood that the advantages which Italy now accords to Austria, and until December 31, 1937, those which it now accords to Albania, Bulgaria, Hungary and Yugoslavia, are excepted from the operation of the provisions of Article VIII during the continuance of this arrangement.”

A transcript of Article VIII as it appears in the enclosure to instruction no. 163 of August 9, 1937, should accompany your note as an annex.

Please also inform the Italian Government that in order to assure that the two Governments have a fully identical understanding of [Page 473] the meaning in application of the provisions of Article 8, you will submit for its consideration within the next few days a memorandum of interpretation. The Department will cable you this memorandum early next week.

The receipt of a satisfactory reply, after affirmation on the part of the Italian Government that our understanding of Article 8 is identical will constitute an adequate temporary arrangement for governing commercial relations between the two countries during the period specified in your note.