711.90G2/24
The Minister Resident in Iraq (
Knabenshue
) to the Secretary of
State
No. 909–Diplomatic
Baghdad
, December 8, 1937.
[Received
December 22.]
Sir: I have the honor to refer to the
Legation’s despatch no. 860 of August 28, 1937,12 reporting that it had in a
note dated August 24 presented to the Foreign Office the
Department’s observations on and suggested changes in the amendments
submitted by Iraq to the draft Treaty of Commerce and Navigation
under negotiation between our two Governments.
I have now received from the Foreign Office in reply a note dated
November 27, 1937, having as its enclosure a draft of the Treaty
incorporating the proposals already agreed upon between the two
Governments and in addition those amendments proposed in the
accompanying note. The note and the draft Treaty were both submitted
in Arabic. However, an English text of the Treaty was also enclosed
and the English of the accompanying note (the language in which it
was drafted) was furnished the Legation by the courtesy of the Legal
Adviser of the Foreign Office. Copies of the English texts of this
note and the draft Treaty are enclosed herewith.
The Department will note from the enclosures that the Iraqi
Government has now accepted Article II with the addition of an
introductory clause and that in Article III the clause concerning
the treatment of national vessels has been re-phrased. The phrase
“within the country” has again been inserted by Iraq in clause 2,
paragraph 2 of Article IV. In place of the original Article V, the
omission of which at our suggestion is accepted, Iraq has submitted
a new Article reserving to itself the right, should measures taken
or maintained by the United States seriously affect its chief
exports, to request the United States to open negotiations and if
agreement be not reached [Page 777]
within three months from its request, to terminate the Treaty
immediately.
It is believed that all the changes proposed by Iraq can be accepted
with the possible exception of Article V. If acceptable as
submitted, there are a few errors of punctuation and spelling in the
present draft which can be corrected in the final draft. In this
connection, it is believed that the Department will desire to change
the word “traveler’s” as used in the first paragraph of Article I of
the text originally submitted by us, to the plural form of the word.
The Department’s attention is also called to the substitution in
this draft of the word “production” in clause 2, paragraph 2 of
Article IV for the word “prohibition” between the words “which as
regards” and “or trade are”. The word “prohibition” was first
submitted to the Department in my telegram no. 11 of June 2, 11 [1] A.M., but it was changed to “production”
in the draft submitted with my despatch no. 820 of July 7, 1937.
Subsequent to the submission of the Legation’s note of August 24 to
the Foreign Office, the Legation inquired from time to time as to
the progress that was being made. On September 22, the Legal
Adviser, Mr. Archibald McDougall, inquired of Mr. Satterthwaite,
then Chargé d’Affaires, whether there was anything in our file which
would assist in the interpretation of the sentence regarding Article
II in the Legation’s note to the Foreign Office of August 24 reading
as follows:
“In conveying the foregoing to the Iraqi Government, I have
been instructed to point out that the provision in question,
since it relates only to trade between the United States and
Iraq, does not obligate the Iraqi Government to extend
similar treatment to other countries except as such
extension might be required by treaties or agreements to
which Iraq is a party.”
Mr. McDougall was informed that no additional comment on this
particular point could be found in the file. However, the following
paragraph from the Department’s instruction no. 242 of January 18,
1937 was read to him:
“It is the view of the Department that most-favored-nation
treatment in respect of quotas and exchange control requires
that the allocations made under quotas or exchange control
will be equal to the share of the trade in a particular
commodity enjoyed in a previous representative period.”
The following paragraph of the Department’s instruction no. 261 of
July 19, 1937, was also read to him:
“For your information, the Department does not consider the
question of restriction of Japanese imports as particularly
relevant in this connection, since it is understood that
Iraq has no treaty or agreement with Japan providing for
most-favored-nation treatment [Page 778] and since the Iraq Government is now
applying special restrictive measures to imports from
Japan.”
It was only after long and extended conferences among various
officials and advisers of the Iraqi Government that they finally
agreed to accept Article II substantially as submitted by the
Department. Mr. McDougall informed Mr. Satterthwaite on September 29
that he had brought Mr. Hogg, the English adviser of the Ministry of
Finance, around to his point of view on Article II and that the
latter was at last willing to accept it, provided another Article be
inserted in the Treaty embodying Iraq’s statement to the League of
Nations concerning most-favored-nation treatment contained in
Article XI (1) of its Declaration of May 30, 1932.13 The Legation later learned that subsequent to a
final meeting on October 11, concrete proposals in reply to ours had
been drafted for presentation to the Council of Ministers.
In view of the fact that this new Article proposed by Iraq as Article
V is unilateral rather than bilateral, the Legation inquired of the
Legal Advisor of the Foreign Office whether this phase of the matter
had been fully discussed and whether the Iraq Government would
entertain serious objections to making it bilateral. Mr. McDougall
replied that this point had in fact been carefully considered and
that, as stated in the Foreign Office note of November 27, it was
inserted in order that the United States should not have a more
favored position vis-à-vis Iraq than the members of the League of
Nations, with respect to whom it is of course unilateral. He
understands, however, that the United States might possibly claim a
more favored position, since the Convention of January 9, 1930, was
signed more than two years previous to Iraq’s Declaration to the
League of Nations of May thirty, 1932. He added that the new Article
would not have been proposed had it not been for our insistence on
retaining Article II in its original form. He gave the impression
that the Iraqi Government would be very reluctant and might possibly
refuse to accept the Treaty without the inclusion of this new
Article.
While discussing the Treaty on September 29, Mr. McDougall observed
that there had been considerable discussion among the experts as to
the possible benefits which Iraq might obtain by a relaxation of the
duties and sanitary restrictions imposed by the United States on
dates, especially those of a cheaper quality. The experts who had
discussed the matter with him had suggested that Iraqi date
exporters would benefit greatly if our tariff on dates were changed
from a specific to an ad valorem basis, and that they would also
benefit if the rule excluding shipments containing more than 10% [Page 779] of wormy dates were
relaxed to 15%. As Sayid Ibrahim Kamal, the Minister of Finance,
raised this same point during a conversation which I had with him on
November 30, Mr. Satterthwaite discussed this point again in his
last conversation with Mr. McDougall concerning the Treaty, pointing
out that this was a question which could not properly be dealt with
in the Treaty itself. As, however, it could probably be considered
in the negotiation of a reciprocal trade agreement, Mr. McDougall
requested the Legation to obtain the views of the Department as to
the suggested change in the tariff on dates, and also to inquire
whether or not the Department would be interested in discussing the
negotiation of a trade agreement. This request is, of course,
entirely informal and does not come from the Foreign Minister. In
view of the fact, however, that Mr. McDougall is familiar with our
trade agreement program and that his advice would in all probability
be accepted, I should be glad to receive the Department’s
observations on these points.
As to the Treaty itself, if the latest proposals of the Iraqi
Government are acceptable to the Department, arrangements can
probably be made for its signature within a short time after the
receipt of my full powers.
Respectfully yours,
[Enclosure 1—Translation]
The Iraqi Minister for Foreign Affairs
(
Towfik
As-Suwaidi
) to the
American Minister Resident (
Knabenshue
)
No. 12832/7/41
Baghdad
, November 27,
1937.
Excellency: I have the honour to refer
to the Note 394 of August 24th, 1937, which was addressed to the
Acting Minister for Foreign Affairs by Mr. J. C. Satterthwaite
as Chargé d’Affaires ad interim, concerning the draft Treaty of
Commerce and Navigation which is under discussion between our
two Governments. The proposals of the United States Government
contained in that Note have now been carefully considered by my
Government and I am happy to inform Your Excellency that,
subject to the amendments set out below, these proposals are
acceptable.
2. The amendments referred to above are as follows:
(1) In Article II, insert at the beginning of the Article the
words “Having regard to the volume and nature of the trade
between the two countries, it is agreed that” and at the end of
the first paragraph of the Article the words “and that” the
whole Article thus reading as one sentence. Subject to these
amendments, which are dictated by Iraq’s extensive
most-favoured-nation obligations, Article II is acceptable.
[Page 780]
(2) In the first paragraph of Article III, substitute for the
words “the same treatment as national vessels” the words
“treatment not less favourable than that accorded to national
vessels or the vessels of the most favoured nation.”
This amendment gives full effect to the desire of the United
States Government to retain in the Article the principle of
national treatment of shipping, and at the same time it renders
the Article more intelligible having regard to the special
circumstance that Iraq possess no mercantile marine and has
strictly speaking no national standard of treatment for
shipping.
(3) In clause (2) of the second paragraph of Article IV, insert
between the word “subject” and the words “to state monopoly” the
words “within the country.”
These words were employed in the amendment proposed in the
Ministry’s Note No. 685 [6857] of June
26th, 1937,14
and are to be found in Article 4 (8) of the International
Convention for the Abolition of Import and Export Prohibitions
and Restrictions, signed at Geneva on November 8th, 1927,15 on which the
amendment was based.
(4) In the place of Article V, the omission of which is
acceptable, substitute a new Article as follows:
Article V
“Notwithstanding the provisions of Article VII of this
Treaty, should measures taken or maintained by the United
States of America seriously affect the chief exports of
Iraq, Iraq reserves to itself the right to request the
United States of America to open negotiations, and if
agreement be not reached by negotiation within three months
from its request, to terminate this Treaty immediately.”
This new Article is based upon Article 11 (1) of Iraq’s
Declaration to the League of Nations of May 31st [30th], 1932, and its object is that Iraq
should not be in a less favourable situation vis-à-vis the
United States than vis-à-vis the Members of the League. It is
believed that it has never been the policy of the United States
Government to seek a better position in relation to Iraq than
the Members of the League themselves enjoy. The Iraqi Government
attach importance to the acceptance of this Article, especially
in view of their acceptance of Article II, and it is hoped that
the United States Government will find no difficulty in
accepting the Article now proposed as Article V.
3. I have the honour to enclose completed drafts in English and
in Arabic giving effect to the proposals on either side already
accepted [Page 781] by our two
Governments, and also to the amendments now proposed in this
Note, and I shall be prepared to proceed to the signature of the
Treaty at Your Excellency’s convenience.
I avail myself [etc.]
[Enclosure 2—Translation]
Iraqi Draft of Proposed Treaty of Commerce
and Navigation
Preamble
The United States of America and the Kingdom of Iraq, taking
cognisance of the provisions of Article 7 of the Convention,
signed at London January 9, 1930, to which the United States of
America, Great Britain, and Iraq are Parties, whereby on the
termination of the special relations existing between His
Britannic Majesty and His Majesty the King of Iraq, negotiations
shall be entered into between the United States and Iraq for the
conclusion of a treaty in regard to their future relations, have
resolved to conclude a treaty of Commerce and Navigation and for
that purpose have appointed as their plenipotentiaries:
The President of the United States of America:
and
His Majesty the King of Iraq:
Who, having communicated to each other their full powers found to
be in due form, have agreed upon the following articles:
Article I
In respect of import and export duties, all other charges imposed
on or in connection with importation or exportation, and the
method of levying such duties and charges, as well as in respect
of transit, warehousing and customs formalities, and the
treatment of commercial traveler’s samples, the United States of
America will accord to Iraq and Iraq will accord to the United
States of America, its territories and possessions,
unconditional most-favored-nation treatment.
Therefore, no higher or other duties shall be imposed on the
importation into or the disposition in the United States of
America, its territories or possessions, of any articles the
[growth,] produce or manufacture of Iraq than are or shall be
payable on like articles the [growth,] produce or manufacture of
any other foreign country.
Similarly, no higher or other duties shall be imposed on the
importation into or the disposition in Iraq of any articles the
[growth,] produce or manufacture of the United States of
America, its territories or possessions, than are or shall be
payable on like articles the [growth,] produce or manufacture of
any other foreign country.
[Page 782]
Similarly, no higher or other duties shall be imposed in the
United States of America, its territories or possessions, or in
Iraq, on the exportation of any articles to the other or to any
territory or possession of the other, than are payable on the
exportation of like articles to any other foreign country.
Any advantage, of whatsoever kind, which either High Contracting
Party may extend to any article, the growth, produce or
manufacture of any other foreign country shall simultaneously
and unconditionally, without request and without compensation,
be extended to the like article the growth, produce or
manufacture of the other High Contracting Party.
The stipulations of this Treaty regarding the treatment to be
accorded by each High Contracting Party to the commerce of the
other do not extend:
- (a)
- to the advantages now accorded or which may hereafter
be accorded by the United States of America, its
territories or possessions or the Panama Canal Zone to
one another or the Republic of Cuba. The provisions of
this paragraph shall continue to apply in respect of any
advantages now or hereafter accorded by the United
States of America, its territories or possessions or the
Panama Canal Zone to one another, irrespective of any
change in the political status of any of the territories
or possessions of the United States of America;
- (b)
- to any advantages in customs matters which Iraq may
grant to goods the produce or manufacture of Turkey, or
of any country whose territory was in 1914 wholly
included in the Ottoman Empire in Asia;
- (c)
- to any advantages which are, or may in the future be
accorded by either Party to purely border traffic within
a zone not exceeding ten miles (15 kilometres) wide on
either side of the customs frontier;
- (d)
- to any advantages in customs matters which are, or may
in the future be accorded to States in customs union
with either High Contracting Party so long as such
advantages are not accorded to any other State.
Article II
Having regard to the volume and nature of the trade between the
two countries it is agreed that in all that concerns matters of
prohibitions or restrictions on importations and exportations
each of the two countries will accord, whenever they may have
recourse to the said prohibitions or restrictions, to the
commerce of the other country treatment equally favorable to
that which is accorded to any other country and that 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
[Page 783] shall be equal to
the share in the trade in such product which such other country
enjoyed in a previous representative period.
Article III
Vessels of the United States of America will enjoy in Iraq and
Iraqi vessels will enjoy in the United States of America
treatment not less favourable than that accorded to national
vessels or the vessels of the most favored nation.
The coasting trade of the High Contracting Parties is exempt from
the provisions of this Article and from the other provisions of
this Treaty, and is to be regulated according to the laws of
each High Contracting Party in relation thereto. It is agreed,
however, that vessels of either High Contracting Party shall
enjoy within the territory of the other with respect to the
coasting trade the most-favored-nation treatment.
Article IV
Nothing in this Treaty shall be construed to prevent the adoption
of measures prohibiting or restricting the exportation or
importation of gold or silver, or to prevent the adoption of
such measures as either High Contracting Party may see fit with
respect to the prohibition, or the control, of the export or
sale for export, of arms, ammunition, or implements of war, and,
in exceptional circumstances, of all other commodities.
Subject to the requirement that, under like circumstances and
conditions, there shall be no arbitrary discrimination by either
High Contracting Party against the other High Contracting Party
in favor of any third country, nothing in this Treaty shall be
construed to restrict the right of either High Contracting Party
to impose (1) prohibitions or restrictions designed to protect
human, animal, or plant health or life or national treasures of
artistic, historical or archaeological value; (2) prohibitions
or restrictions applied to products which as regards production
or trade are or may in the future be subject within the country
to state monopoly or monopolies exercised under state control;
or (3) regulations for the enforcement of revenue or police
laws.
Each of the High Contracting Parties agrees that, in respect of
the foreign purchases of any state monopoly for the importation,
production, or sale of any commodity or of any agency having
such monopoly privileges, the commerce of the other High
Contracting Party shall receive fair and equitable treatment,
and that, in making its foreign purchases, such monopoly or
agency will be influenced solely by those considerations which
would normally be taken into account by a private commercial
enterprise interested solely in purchasing goods on the most
favorable terms.
[Page 784]
Article V
Notwithstanding the provisions of Article VII of this Treaty,
should measures taken or maintained by the United States of
America seriously affect the chief exports of Iraq, Iraq
reserves to itself the right to request the United States of
America to open negotiations, and if agreement be not reached by
negotiation within three months from its request, to terminate
this Treaty immediately.
Article VI
The present Treaty shall, from the day on which it comes into
force supplant Article 7 of the convention between the United
States of America and Great Britain and Iraq signed at London
January 9, 1930, in so far as commerce and navigation are
concerned.
Article VII
The present Treaty shall take effect in all its provisions on the
thirtieth day after the exchange of ratifications, and shall
continue in force for the term of three years from that day. If
neither High Contracting Party notifies to the other at least
one year in advance an intention of terminating the Treaty upon
the expiration of the aforesaid period of three years, the
Treaty shall remain in full force and effect after the aforesaid
period and until one year from such a time as either of the High
Contracting Parties shall have notified to the other an
intention of terminating the Treaty.
Article VIII
The present Treaty shall be ratified and the ratifications
thereof shall be exchanged at Baghdad as soon as possible.
In witness whereof the respective Plenipotentiaries have signed
the present Treaty and have affixed their seals thereto.
Done in duplicate in the English and Arabic languages, which have
the same value and shall have equal force, at Baghdad this . . .
. . day of. . . . . . . . 1937, of the Christian Era,
corresponding with the. . . . . day of. . . . . . . 1356, of the
Hijra.
