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

No. 706

Sir: Reference is made to your telegram No. 219 of February 9, 6 p.m., and to previous telegrams from the Embassy regarding negotiations between the French and British Governments concerning a commercial agreement covering the French Zone of Morocco.

In the Embassy’s telegram No. 219, the statement is made that the agreement which has been initialed by French and British negotiators “consolidates duties on goods representing approximately fifteen percent of the value of Moroccan imports during the past year …” From the above statement, and from the references to consolidated duties in the Embassy’s telegram No. 186 of February 3, 5 p.m. (section three), and its telegram No. 201 of February 7, 1 p.m., the Department presumes that the term “consolidated duties” refers to the consolidation of the present duty of ten percent provided for under the British Treaty of 1856 plus the two and one-half percent provided for under the Act of Algeciras, or a total of twelve and one-half percent ad valorem, and that British goods covered by the consolidated rates in the new commercial agreement will continue to pay twelve and one-half percent upon importation into Morocco during the life of the agreement. Is that assumption correct, or are new tariff rates established?

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It would appear from the Embassy’s telegram No. 219 that the British, as a quid pro quo for the French concession to bind certain rates to twelve and one-half percent, agreed that phosphates, palm fiber, and other articles of special interest to Moroccan production shall be admitted into Great Britain free of duty. The French hope to proceed on the same lines, you report, when they negotiate with us. As the Embassy is aware, we would probably not be able to grant, in a commercial treaty, reductions or bindings of any of our existing rates on Moroccan products but might grant such reductions or bindings in a trade agreement, negotiated in accordance with the terms of the Trade Agreements Act of June 12, 1934.23

On the basis of information now available to the Department, it would appear that it may become desirable to negotiate simultaneously in Washington the following instruments: (1) a convention regarding the abolition of the capitulations, (2) a commercial convention, valid for a period of ten years, and (3) an exchange of notes in which we would obtain guarantees as to the duty and quota treatment in Morocco of articles in which this country has a principal interest. In the event the French should insist, in return for the latter, upon our granting reductions or bindings of our duties on certain Moroccan products, it would become necessary for the Department to consider whether it would be possible and desirable to undertake negotiations of a trade agreement between the United States and Morocco, possibly in substitution for (3) above.

The French will presumably press for the capitulatory convention as soon as possible, while our interests will lie in the direction of negotiating the commercial convention simultaneously with the capitulations convention. If it should develop that trade-agreement negotiations are also necessary, it is believed that it would be desirable to conduct all three negotiations simultaneously.

You will understand that the above are preliminary remarks suggestive of what the Department has in mind regarding Morocco, and are sent to you in the belief that they may be of assistance as background if you should be approached by the French authorities. The Department does not desire, however, that you should intimate to the French at this time that possible trade agreement negotiations with Morocco have been envisaged.

The apparently conciliatory attitude of the French regarding quotas, and their reiteration that whatever has been agreed to with the British stands subject to our approval, are sources of gratification.

The Embassy is requested to endeavor to obtain, as soon as possible, and forward to the Department a copy of the new Anglo-French agreement.

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Comment regarding the question of internal taxes in Morocco is withheld pending further information from the Embassy regarding the exact contents of the Anglo-French agreement. It is apparent, however, that little will be gained by binding duties in Morocco if their effect may be nullified by internal taxation.

Very truly yours,

For the Secretary of State:
Sumner Welles
  1. 48 Stat. 943.