781.003/79: Telegram

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

201. Reference Embassy’s 196, February 5, noon,12 the Foreign Office advised us Saturday night that they had been unable to wind up the negotiations which would go over until today.

A member of the British delegation informed us this morning that the situation (as reported in our 186, February 3, 5 p.m.) has now been changed in two respects: (1) As regards the allocation by countries [Page 858]of import quotas upon the basis of previous periods. The British delegation had assumed that the calculation would be made on the basis of volume of imports; the French have insisted upon using the value of imports; the British delegation has agreed provisionally to the French request subject to confirmation from London. (2) The method of dealing with internal taxes through a schedule of goods on which such taxes would not be increased beyond a certain figure has been abandoned; instead the British have accepted a clause to the effect that the advantages obtained through the consolidation of import duties will not be nullified by increases in internal taxation although the principle is recognized that increases in internal taxes may be necessary for budgetary reasons. There will also be a provision in an exchange of notes that if there should be any dispute [apparent omission] this point in a particular case the case will be discussed with the British Consul General at Rabat. It is expected that the negotiations will be wound up tonight or tomorrow and the agreement signed in Paris as soon as texts can be printed and compared, probably in about 10 days time.

Copy to London and Tangier.

Bullitt
  1. Not printed.