The Chargé in Turkey (Kelley) to the Secretary of State
[Received 9:55 p.m.]
13. Embassy’s No. 56, September 21, noon.
1. Embassy received on October 23 a note from Foreign Office (replying to Embassy’s note of September 11, 1937) which stated in the first paragraph that “after having studied with the Ministry of Economy the basis proposed by the American Government for the negotiation of the agreement proposed by the Turkish Government, this Ministry has decided to accept the maintenance for American goods of unconditional most favored nation treatment.”
Having been informed that the original draft of the Turkish Government’s reply stated that unconditional most favored nation treatment could be accorded to the United States only in respect to customs duties, I considered that the above phraseology did not clearly indicate that the Turkish Government had accepted the Department’s conception of the scope of unconditional most favored nation treatment. [Page 951] After a conversation with the Prime Minister11 and the parliamentary Under Secretary of State for Foreign Affairs12 and at the suggestion of the latter I addressed yesterday a note to Foreign Office inquiring “whether in accepting the principle of unconditional most favored nation treatment as the basis for the negotiations, the Turkish Government is in accord with the American Government that this principle applies not only to customs matters but to all forms of trade control.” I pointed out that all the trade agreements entered into under our trade agreements program are based on the principle of unconditional most favored nation treatment in respect not only to customs duties but to all forms of restriction or control of trade and stated that the Department of State desired assurances that the Turkish Government understands and accepts this basis for the contemplated negotiations.
Embassy received today note from Foreign Office stating the Turkish Government “is in accord with regard to the meaning given in above mentioned note to most favored nation treatment, consequently it accepts as a basis for negotiation of Turkish American commercial agreement most favored nation treatment extending not only to customs duties but to all forms of commercial restriction and control.”
For the Department’s information it may be stated that the Prime Minister, formerly Minister of Economy, has on two occasions expressed to me his great interest in the conclusion of a trade agreement with the United States and the Under Secretary of State for Foreign Affairs has stated that the Prime Minister has given instructions that everything be done to bring about the conclusion of such an agreement.
2. Embassy has received also a note from the Foreign Office (a) requesting that “wool, raisins and meerschaum” be added to the list of goods transmitted with its note of September 17 (enclosure to Embassy’s despatch number 357 of September 2113) for which the Turkish Government will request tariff reductions, and (b) stating that during the negotiations tariff consolidation will be demanded for the following articles: valonia; valonia (valex); sheepskins, lambskins and skins of all kinds of wild animals; goatskins and kid skins; canary seed; olive oil (non-edible); emery; animal hair (goat hair, et cetera); gun tragacanth; attar of rose; beeswax; carpet wool; gallnuts; sheep casings; chrome and chromite; licorice paste; and paste.
Commercial Attaché informs me that the officials of the Ministry of Economy thoroughly understand that the United States is not in general in a position to grant concessions to Turkey on products of [Page 952] which Turkey is not the principal or an important supplier to the United States.
3. A second paragraph to note from Foreign Office received on October 23 states “In acceding thus to the desire expressed by the Embassy of the United States of America the Ministry for Foreign Affairs has the firm hope that the question of the Export Import Bank of Washington granting 5 years’ credit will also find a favorable solution.”
This question had not been raised in any discussion on the subject of the trade agreement between members of the Embassy and Turkish officials. The Commercial Attaché informs me, however, that ever since the establishment of the Export Import Bank the Turkish Government has been desirous that the bank extend it credit on its purchases in the United States.