611.6831/205
The Secretary of State to the Minister in Greece (MacVeagh)
Sir: The receipt is acknowledged of your despatch no. 2361 of July 16, 193835 with reference to a communication which you have received from the Greek Minister of National Economy, requesting that a special customs surcharge which is now imposed on coffee, sugar, and sardines in brine be excepted from the provisions of Article I and Article II, paragraph 5 of the Greek draft modus vivendi submitted with your despatch No. 2298 of June 10, 1938.
In this connection, you should make it clear to the Greek authorities that Article II, paragraph 4 of the Department’s second draft modus vivendi enclosed with its instruction No. 454 of April 13, 1938, which was repeated as Article II, paragraph 5, of the Greek counter-proposal submitted with your despatch No. 2298 of June 10, 1938, relates solely to tariff quotas and, therefore, would not cover the special Greek customs surcharges on coffee, sugar, and sardines in brine.
With respect to sugar, the statements contained in the first paragraph quoted from the aforementioned communication are not entirely clear, since, according to the Department’s information (Commercial Attaché’s Economic and Trade Note No. 94, November 10, 1937,36“Further Modifications in the Greek Import Regulations on Sugar”), imports of sugar into Greece from the United Kingdom, as well as from clearing countries, are accorded preferential treatment by reason of the additional charge, equivalent to three-quarters of any difference in the c. i. f. price of sugar imported from countries other than the United Kingdom compared with the c. i. f. price of sugar of British origin on the same date, which is levied on imports of sugar from non-clearing countries other than the United Kingdom. Presumably the Greek authorities desire also to except this preferential treatment accorded imports of sugar from the United Kingdom.
Although for broad reasons of policy the Department would be reluctant to except these preferences from the provisions of Article I of the proposed modus vivendi, it is of course true that the United States has very little interest in the trade in the products concerned. Therefore, if the Greek authorities should be disposed to conclude a modus vivendi substantially along the lines proposed by the Department in its instruction no. 484 of September 29, 1938, the Department would be willing to consider including a paragraph along the following lines in Article V: [Page 551]
“Without modifying its position on the principle of unconditional most-favored-nation treatment, the Government of the United States of America agrees not to invoke the provisions of Article I of this Agreement in respect of the special and temporary advantages now accorded by the Kingdom of Greece to imports from certain countries of coffee in beans, sardines in brine, and sugar.”
Your comments with reference to this proposal will be appreciated. The Department would also appreciate receiving complete information regarding the operation of the regulations with respect to the application of these premiums on coffee, sardines in brine, and sugar.
Very truly yours,