The Norwegian Legation to the Department of State
With reference to the various conversations which have taken place in the Department of State since 1934 regarding the negotiation of a trade agreement between Norway and the United States of America, and to the memorandum which was delivered by Assistant Secretary of State, Mr. Sayre, on February 11th 1938,13 the Minister of Norway has the honor to communicate the following views of his Government:
It will be recalled that about a month before the enactment of the Trade Agreements Act of 1934, the Congress, through the Revenue Act of May 10th 1934,14 introduced a tax of 3 cents per pound on whale [Page 627]oil, which is absolutely prohibitive and constitutes a serious obstacle to the trade relations between the two countries. As this tax, in spite of the fact that it was intended to apply to imported whale oil only, was classified as an excise tax in said Revenue Act of 1934, the Norwegian Government protested against this tax, which they considered—and still consider—as being incompatible with the Treaty of June 5th 1928, between Norway and the United States.15 These being the circumstances, the Norwegian Government intimated that the repeal of the tax would be desirable before negotiations could be initiated, as the tax in question, introduced only about two months before the invitation for trade negotiations was communicated to the Legation of Norway, had seriously disturbed the basis for reciprocal discussions.
The Government of Norway have been glad to note that the Department of State as well as other executive branches of the United States Government have conceded that the tax on whale oil is inequitable, and greatly appreciate the endeavours of the United States Government to obtain the consent of the Congress to the repeal of this tax. However, as the efforts to secure the repeal of the tax in question have been unsuccessful, the Norwegian Government have taken under consideration the question of accepting your Government’s invitation to open negotiations for a trade agreement and the Minister has been authorized to initiate the necessary preliminary discussions.
As regards the concessions my Government would expect, the Minister has the honor to point out—as previously mentioned on various occasions and as repeated by His Excellency Dr. Koht, Minister of Foreign Affairs, during his visit to Washington last year—that the Norwegian Government understand that a reduction of the tax and duty on whale oil—totalling 3.8 cents per pound—should be granted without any compensation. The Government of Norway further consider in this connection that a full 50% reduction of the existing tax and duty—indispensable for the sale of Norwegian produced whale oil to the United States—should be accepted. As regards other concessions, the Norwegian Government understand that the Government of the United States are willing to discuss reductions of the duties on various articles of which Norway is the principal exporter to the United States. Furthermore, the Norwegian Government would desire to obtain the discontinuance of those proceedings under the anti-dumping legislation which for several years have prevented the importation of Norwegian matches to the United States, and also a satisfactory solution of the question of calculating the values of paper products exported from Norway to the United States.[Page 628]
With regard to the concessions which might be expected on the part of Norway, it has been understood—from conversations which have taken place between the Minister and Assistant Secretary of State, Mr. Sayre—that certain concessions for agricultural products would be of special interest to the American Government. In this connection the Minister has been authorized to state that the Norwegian Government would be prepared to guarantee against increase in the existing duties for the following products:
|molasses (with less than 70% sugar contents),|
|fodder, such as distiller’s grain,|
|flour derived from barley, beans, peas and lentils,|
|flour derived from wheat,|
|tomato-soup in containers of not less than 5 kilogrammes.|
As regards the question of reduction in existing duties for agricultural products, the Norwegian Government want to point out that Norwegian agriculture is in the same position as agriculture in a number of other countries: greatly depending on the home market for a sufficient distribution of its products at reasonable prices. Whereas, therefore, the imposition of custom duties has been found to be necessary, it should be observed that notwithstanding existing duties a considerable exportation of American agricultural products to Norway yearly takes place. The Government of the United States, being particularly interested in reduction of duties on fresh fruits, have not failed to note the spontaneous seasonal reductions which Norwegian authorities have conceded in recent years for apples and pears and the proposal recently adopted by the Storting for reduction of the customs duty on pears for the period March 16th–July 31st.
The Norwegian Government regret very much that they would not be in a position to introduce to the Storting any proposal for further reductions of agricultural tariff duties.
With regard to existing Norwegian duties on industrial products the Minister has been authorized to state that the Norwegian Government would be willing to consider reductions for various categories [Page 629]of machinery which are principally imported to Norway from the United States. A specification of the machinery in question may appropriately be postponed till the American manufacturers and exporters have indicated their views with regard to this matter.
The trade agreements policy initiated by the American Government with the object of liberalizing world trade has aroused the greatest interest in Norway and the Norwegian Government are anxious to contribute to that same end through the conclusion of a trade agreement. The Norwegian Government would, therefore, be thankful to learn whether the Government of the United States would consider the views communicated above as an appropriate basis for further negotiations.