Foreign Relations of the United States Diplomatic Papers, 1938, The British Commonwealth, Europe, Near East, and Africa, Volume II

611.6731/412

The American Trade Delegation at Istanbul to the Turkish Foreign Office²²

Aide-Mémoire

The Delegation has brought to the attention of its Government the position of the Turkish Government, as set forth by the Secretary General of the Foreign Office, with respect to the provisions in our proposals which the Turkish Government finds itself unable to accept, the most important of which are those relating to the consolidation of tariff rates, other similar taxes and charges, and bases and methods of determining dutiable value, and that regarding exchange control. The American Government is prepared to explore every possibility with a view to finding a solution for the difficulties confronting the Turkish Government in respect to our proposals.

With respect to the question of the consolidation of tariff rates, et cetera, a solution along the following lines is suggested for the consideration of the Turkish Government. While fixed tariff rates would be listed in both Schedules the American Government is prepared to agree to a clause permitting Turkey to increase at any time tariff rates and other similar taxes and charges on articles enumerated in the Schedule. Application of new duties, however, would be deferred for a suitable period after their promulgation, and the United States would be free within 15 days after such increases become effective in respect to imports from the United States to terminate the agreement, upon 30 days’ notice. The American Government is prepared to omit the provision with regard to the consolidation of the bases and methods of determining dutiable value. There is attached a proposed draft incorporating these ideas.

With regard to the provisions concerning exchange control, the American Government recognizes Turkey’s exchange difficulties and has no desire to ask Turkey for assurances which might prove to be in excess of her capacity to fulfill. It is therefore disposed to agree to a limitation of Turkey’s obligation to make exchange available for payment of commercial imports from the United States, but it cannot accept the particular form of the limitation contained in Article 4 of the Turkish counter-proposal of June 7th,²³ namely, the 80 per cent exchange clause, nor any form of limitation which expressly fixes a ratio between exports and imports in the trade between the two countries. Such bilateral balancing is in direct conflict with the fundamental policy of American Trade Agreement Program. The American Delegation is prepared to cooperate with the Turkish Delegation in working out a formula which will meet the needs of the Turkish position in respect to limitation of exchange for payment of commercial imports, and which will not be in conflict with American policy.

Ankara , July 1, 1938.

[Enclosure—Translation²⁴]

Draft of Article I

1. The natural or manufactured products originating in the United States of America which are enumerated and described in Schedule 1 annexed to the present agreement shall enjoy upon their importation to the territory of the Turkish Republic the customs duties provided in said schedule except for the dispositions of the following paragraph.

2. In case the Government of the Turkish Republic should raise the customs duties provided in Schedule 1, or should proceed, in that which concerns the products enumerated or described in said schedule, to create or increase any other duties, taxes or charges whatsoever, collected on importation or at the time of importation, the resulting tariffing of the advantages which are provided at the effective date of the present agreement will be maintained without change for said products until the expiration of a delay of one year from the date of the promulgation of the new duties, taxes or charges. Nevertheless, the Government of the United States will be free, in the fifteen days from the date of the application of the new duties, taxes or charges on either one or the other of the products originating in the United States of America enumerated and described in Schedule 1, to terminate the present agreement upon written notice thirty days in advance.

22. Copy transmitted to the Department by the Ambassador in Turkey in his despatch No. 740, July 7; received July 26.
23. For general summary of Turkish counterproposal of June 7, see telegram No. 46, June 8, 7 p.m., from the Ambassador in Turkey, p. 1057.
24. Translation supplied by the editors.