The Secretary of State to the Ambassador in Belgium (Davies)
Sir: Reference is made to your despatch no. 256 of June 20, 1938 relative to the trade agreement between the United States and Belgium [Page 214]and certain regulations under consideration by the Belgian Government in connection with the manufacture and importation of automotive vehicles and their separate parts.
The Department notes that the Embassy has not pursued its representations of a general nature concerning violations of the spirit of the trade agreement but has confined its efforts to an attempt to obtain more favorable treatment in the case of individual commodities. These efforts have been appreciated by the Department.
As the Embassy is aware, the Department has anticipated for some months that the Belgian Government would submit through its Embassy in Washington, without delay, a counterdraft which would serve as the basis for the successful negotiation of general provisions. The delay on the part of the Belgian authorities in transmitting their counterdraft may be due in part to the fact that the provisions of the present agreement are not very comprehensive in scope and, in the absence of general provisions, the Belgian authorities are relatively free to adopt various measures which, although not in conflict with the terms of the present agreement, would be in conflict with the terms of the general provisions. The Department appreciates the efforts which the Embassy has made to persuade the Belgian authorities to submit the Belgian counterdraft without further delay and hopes that the Embassy will continue those efforts.
The Department notes that the aide-mémoire and memorandum enclosed with your despatch under reference are to be considered as not having been transmitted by the Foreign Office to the Embassy and will consider them as strictly confidential. The contents of the aide-mémoire and memorandum have also been noted, as well as the Embassy’s comment that the regulations under consideration by the Belgian Government, in connection with the manufacture and importation of automotive vehicles and their separate parts, would go further than ever in a violation of the spirit, if not the letter, of the trade agreement.
It is apparent, of course, that the regulations under consideration by the Belgian Government would not be in conflict with any specific provision of the existing trade agreement. However, if the evidence were clear that the proposed regulations might have the effect of nullifying or impairing the concessions on automotive parts which were granted to the United States in the trade agreement, this Government would be in a position to protest on the ground that such regulations would be in conflict with the spirit and purposes of the present agreement.
The Belgian Government apparently considers that the problem of regulating the Belgian automotive industry is an important one. Therefore, the Department feels that it would be desirable, if possible, [Page 215]to work out a solution of the problem in cooperation with the Belgian authorities which would be satisfactory to both Governments and in accordance with the spirit as well as the terms of the existing trade agreement. It would be appreciated if the Embassy would consider the possibility of working out such a solution. Meanwhile, you are requested to submit to the Department for its consideration such further views or proposals as the Belgian authorities may communicate to the Embassy, together with your comments and recommendations.
Very truly yours,