The Chargé in the United Kingdom (Johnson) to the Secretary of State
[Received December 7—5:32 p.m.]
759. Department’s instruction No. 1997, October 26, 1937,33 and my 608 September 25, 1 p.m. Following confidential memorandum dated December received from the Foreign Office.
- “1. During the recent capitulation negotiations between His Majesty’s Government and the French Government, the latter argued very strongly that the United Kingdom Commercial Convention of 1856 with Morocco,34 with its provisions under article XIV for revision by common consent, was of a capitulatory nature, and should be canceled on the termination of British capitulations in the French zone of Morocco. His Majesty’s Government refused to admit this view of the 1856 Convention but they did agree, in a separate note annexed to the Capitulations Convention of the 29 July last, to enter into negotiations with the French Government to replace the 1856 Convention by a new commercial treaty on a reciprocal basis.
- 2. His Majesty’s Government are therefore committed to enter into commercial negotiations with regard to the abrogation of the 10 percent limit on customs duties, the modification of the reglement douanier provisions, the modification of article XIV of the Commercial Convention of 1856 and the bringing up to date of the provisions of the latter convention in general. The French Government are committed to consider the establishment of conventional duties on imports into Morocco of goods in which the United Kingdom trade is interested, and also to consider safeguards required by His Majesty’s Government in respect of internal duties.
- 3. His Majesty’s Government have been given to understand that the French Government are going to revive their former proposal for the imposition of quotas in Morocco and that they propose to introduce such a system if they can, either with or without consultation with His Majesty’s Government. In this connection the French Government have in the past referred to two possible interpretations of their obligation under the Act of Algeciras to maintain ‘economic liberty without inequality’, the one viewing the obligation as involving merely non-discrimination in treatment as between importing countries, and the other regarding it as the absence of any restriction on liberty of import for the individual country. The French Government appear to adopt the first interpretation, that is, that quotas related to the same basic years for all countries are not contrary to the obligations under the Act of Algeciras. As the United States Government will no doubt appreciate, it is clearly better from the point of view of His Majesty’s Government that any decision which the French Government may adopt should be reached after consultation with His Majesty’s Government.
- 4. According to the information of His Majesty’s Government the French Government are aiming at tariff autonomy in the French zone and are prepared to consolidate duties on goods of interest to the United Kingdom and to consult the wishes of His Majesty’s Government as to quotas. The French proposals on these matters are now being awaited. The United States Government are no doubt aware that the interests of the United Kingdom and those of the United States of America in Morocco relate in the main to different lines of trade. Taking the 1936 figures of the items which accounted for trade worth over half a million francs, the only items in which both countries are interested are lubricating oil, tires and motor vehicles. The major American interest lies in motor vehicles, whereas United Kingdom exports of these goods represent only quite a small proportion of the United Kingdom’s total exports to Morocco. As stated in the aidemémoire of the 18th September, 1935,35 which was communicated to the United States Government by His Majesty’s Embassy at Washington, His Majesty’s Government were then most anxious to assist the United Kingdom cotton trade with Morocco, which has been so seriously damaged by Japanese competition, by means of a system of quotas. His Majesty’s Government are still most anxious to reach a satisfactory solution on this point. If the United States Government are likely to change the attitude in this respect set out in their aide-mémoire of the 27th April, 1936,36 it would be useful for His Majesty’s Government to have this information.
- 5. Further, if the United States Government have any suggestions as to what might usefully be done by way of collaboration in setting up a new commercial régime in Morocco, His Majesty’s Government would be grateful to have an opportunity of considering them.”
In a short discussion at the Foreign Office this afternoon on this memorandum, it was stated that they would be glad to answer any question which the Department might like to ask and expressed their appreciation for the information forwarded under cover of the Department’s instruction above cited which I conveyed to them informally. I was informed that French representatives will arrive in London on December 13 to negotiate a new commercial treaty to replace the 1856 Convention. The British are not prepared to abandon the principle of equality of treatment although it was stated they are sure they will have to make specific concessions in order to preserve a certain measure of their trade with Morocco. These concessions will be made as a matter of “grace”. Specific mention was made of textiles and of the French desire to put them on a quota basis. The British apparently anticipate that the French will bring a draft convention with them and they have not prepared concrete draft proposals to present to the French.