781.003/77: Telegram

The Ambassador in France (Bullitt) to the Secretary of State

186. (Section 1) Most concise information has been furnished by a member of the British delegation negotiating with the French for a commercial agreement concerning Morocco. It should be read with reference to the telegraphic reports from the Embassy at London, particularly No. 36, January 15, 2 p.m., and No. 65, January 27, 6 p.m.

As regards quotas, there are at present two schedules.

Schedule A or the “prohibited” schedule, listing commodities on which the British do not desire quotas to be established and would accept quotas only after agreement relating to the basic periods; this list includes articles of importance in the British trade with Morocco but concerning which they do not fear Japanese competition.
Schedule B or the “compulsory” schedule, imposing quotas on woolen and cotton textiles and coal, the basic periods being fixed in the schedule itself.

The French will be free to impose quotas on all articles not included in schedules A and B. Incidentally automobiles and spare parts are not at present included in either schedule.

(Section 2) The principle that the total amount of permitted importations of each article under quota is to be equal to the imports of the latest year for which figures are available would apply to articles in schedule A (if the British agree to the imposition of quotas on any of these articles) and to articles in schedule B subject to the proviso that the global quota on any article in these schedules may not be varied either way more than 10 percent without the approval of the British. As regards articles not included in schedules A and B the French apparently would be free to fix the total amount of permitted importations of such articles as they see fit and the allotment by countries would be subject to most-favored-nation treatment and to the limitation that the British share of the quota on any particular article shall not be less than 5 percent.

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The British delegation feel that the only possibility of conflict which their agreement might cause in our subsequent negotiations with the French would be in case we insisted upon an article being subject to quota and this article happened to be included in their “prohibited” schedule. They do not however look for any difficulties on this score which could not easily be ironed out.

(Section 3) Moroccan import duties will be consolidated on articles listed in two schedules: (1) articles of British export, (2) articles exported by the colonies.

The question of drawing up a schedule of goods on which internal taxes would be bound at their present rate, or a limitation imposed as to future increase, is causing the greatest difficulty in the negotiations at the present time. The British are endeavoring to include in the internal tax schedule all goods covered by the two quota schedules, with the exception of articles manufactured locally or in France, concerning which they feel that for obvious reasons there would be little likelihood of prohibitive increase in internal taxation.

The British are taking a firm stand against the French request for preferential treatment for certain exports from Morocco to France. They say they do not expect to give way on this point, that they assume we feel the same way about it, and that they are relying upon us to maintain this act in our negotiations with France.

The negotiations in Paris which began last Monday have had to do entirely with filling in the lists of goods of the various schedules, since the actual text of the agreement, exchange of notes, et cetera, was approved in the earlier stage of the negotiations in London. There is a possibility that agreement on the schedule may be reached by the end of this week.

Copies to London and Tangier.

  1. Telegram in three sections.