781.003/69: Telegram

The Chargé in the United Kingdom (Johnson) to the Secretary of State

36. My 810, December 29, 8 p.m.

1. Through arrangements made by the Foreign Office, I have had a conference with Mr. J. J. Wills, principal Assistant Secretary of the Board of Trade, who was the British official in charge of the first phase of the negotiations with the French for a commercial agreement regarding Morocco. Mr. Stacy, one of the permanent officials of the Board of Trade, was present during the interview. Mr. Wills informed me that the meeting with the French in December had resulted in a draft treaty being drawn up together with a protocol, certain exchanges of notes and schedules and that the French had now consented to our being informed of the substance of the draft but declined to allow the British to give us or to show any text. The clauses in this draft as it now stands, he said, might be divided into three categories: (1) those on which the two delegations were in agreement; (2) those embodying principles on which the two delegations were in agreement but about which differences of opinion as to phraseology still existed; and (3) clauses proposed by both sides on which no agreement had been reached and which will be further considered. Mr. Wills pointed out that this draft treaty and its annexes deal exclusively with goods, as questions involving political and personal rights of individual citizens are considered to have been covered in the Anglo-French convention of last July.4 He also stated that the most-favored-nation principle is operative throughout the draft with certain exceptions regarding exports from Morocco to France. The French have not yet informed the British what these specific commodities are but have merely stated that there are certain items exported from Morocco which are needed in France and of which France takes practically the total output. The British have agreed to evoke at Paris the French proposals for these specific exceptions from the most-favored-nation principle in Moroccan exports. Mr. Wills stated that the French had endeavored to induce the British delegation to admit the insertion of a clause in the treaty which would recognize the ultimate right of France to preferential treatment for French goods in Morocco as opposed to those of other nations. The British delegates flatly refused their consent and Wills pointed out that in any case the admission of such a principle in the treaty would have to go [Page 848]to higher authority than the negotiating agents; that it was a political matter with far-reaching implications. An official at the Foreign Office to whom I subsequently mentioned this specific question, confirmed the statement of Mr. Wills that the French had endeavored to secure the inclusion of such a clause in the treaty and said that, so far as he could say, there would be no change in the British position.

The French proposed alterations in the Act of Algeciras.5 The British have only agreed to the proposal as to method of valuing goods in the customs houses and to abrogation of chapter 5 of the Algeciras Act, provided the new regulations are along lines to be specified and appended to the exchange of notes. This amounts substantially to agreement that the system of evaluation to be established should be that now in France, which will fix the value of an imported commodity at its wholesale value at the time it is presented at the Moroccan customs, including its original purchase price in the country of origin increased by packing, transportation and handling expenses but not customs duties.

The treaty, Mr. Wills said, would not automatically apply to the colonies and their position is yet to be determined. Machinery will be provided for the accession of such Dominions as may desire. Until such accession is made, the old Anglo-Moroccan Treaty of 18566 will apply to the Dominions.

The treaty contains the usual sort of most-favored-nation clause with respect to importation of prohibited articles, such as unlicensed arms, narcotics, et cetera. The French agreed in principle, with details not yet determined, regarding the most-favored-nation principle and national treatment with respect to internal taxation on commodities, octroi duties, et cetera. Mr. Wills stated that in the case of certain articles the British would require a schedule setting out a maximum amount which might be imposed in any system of internal taxation. He said that they must recognize however the necessity, from the French point of view, of raising revenues by internal taxation although they naturally would press for as favorable a position as they could. The French in general object to any restriction on their right of internal taxation.

The British have agreed that the final terms of this treaty may be applied to the protected zone of Tangier if the Tangier Council desires.

To summarize, economic equality in Morocco through operation of the most-favored-nation principle would seem to be secured in the Anglo-French drafts with the exception to be noted that a special [Page 849]concession may be made on certain specific items of export from Morocco to France and tariff autonomy is in effect conceded to French Morocco subject to certain limitations.

2. The question of quotas is not dealt with in the treaty proper but through an exchange of notes with annexed schedules. The French authorities having been for some time desirous of introducing a quota system in Morocco, the British had expressed their willingness to accept this on terms with respect to certain specific commodities. Now, according to Mr. Wills, they propose to go further and to permit the French to introduce a complete quota system subject to special conditions (1) that the general system of quota restrictions to be set up shall provide for a global quota covering the imports of all nations, which is to be based on the total amount of foreign commodities and goods imported into Morocco during the last year for which definite statistics are available. If in any basic period the British should send less than 5 per cent of the total global quota, then the French will be asked to allow them to send up to 5 per cent of the global quota; (2) the share of each country in that global quota shall be the proportion of imports it had in some basic period. The French, it seems, are prepared to concede a long basic period. The British, from their point of view, have secured a most important corollary to the two general principles above cited. They will annex to the exchange of notes regarding quotas two schedules: A, a long list of articles in which the British have considerable but not primary interest, and B, a short schedule of primary importance, covering cotton and woolen goods and coal. As regards these three commodities in schedule B the British will require the basic period to be fixed in the schedule itself and thus made a part of the exchange of notes. The amount, of course, of these important commodities will be fixed by the British proportions within the global quota. With respect to both schedules A and B, which are commodities that the British will choose to schedule, the French must agree that the global quota may not be varied by more than 10 per cent either way without consulting the British. The Board of Trade, it was stated, will not make any effort to secure different representative periods for quotas of different commodities entering into Moroccan trade outside the commodities which will appear in their schedules A and B, which are the only ones in which they have any practical interest.

Department’s 14 of January 12, 5 p.m. came to me just before my interview with Mr. Wills, and both the Board of Trade officials and the Foreign Office official with whom I spoke later, agreed with the apartment’s view that it would be more advantageous if the French Government should be informed of the American views directly through the American Embassy in Paris. The Foreign Office official [Page 850]pointed out that the provisions regarding quotas which they embody in their draft treaty are based very largely on the Department’s own definition, and there is no doubt that both the Foreign Office and the Board of Trade agree with the Department’s view that the establishment of different representative periods for the quotas of different commodities entering into Moroccan trade would better serve the interests of the countries concerned than the establishment of a single representative period for all commodities in respect of which quotas are contemplated. They have secured this principle apparently with respect to the long list of commodities in which they are interested, although it seems that they will not press for the adoption of this principle to cover other commodities in which they have no trade interest.

The draft treaty and annexed documents are by no means in final form, although they cover now a document of 16 closely printed pages. This I was not allowed to see because of the French prohibition above mentioned and Mr. Wills’ exposition was not very orderly. The meeting in Paris for further negotiations will take place at the end of this month, and the British officials are very hopeful that the American views may be communicated to the French through our Embassy in Paris before the meeting takes place. This would in any case seem to be desirable from our own point of view.

Johnson
  1. For text of convention signed July 29, 1937, see British Cmd. 5646 (1938): Convention for the Abolition of Capitulations in Morocco and Zanzibar.
  2. For text of Act, see telegram of June 22, 1906, from Minister Gummeré, Foreign Relations, 1906, pt. 2, p. 1495.
  3. Signed at Tangier, December 9, 1856, British and Foreign State Papers, vol. xlvi, p. 188.