894.512/53
Memorandum by the Chief of the Division of Trade Agreements (Hawkins) to the Secretary of State34
Mr. Secretary: I have made a rather hasty survey of the considerations of a commercial nature which would be involved in reaching a decision as to the desirability of terminating our treaty of commerce and navigation with Japan35 and wish to offer the following comments as my preliminary reaction.
Mr. Hornbeck’s memorandum36 refers to various violations by Japan of our rights under the treaty. So far as I am aware, there are no cases outstanding of violations of the commercial clauses of the treaty. In the course of a study recently undertaken of the possibility of suspending the generalization of trade-agreement concessions to Japan because of Japanese activities in China, it was concluded that [Page 245] there was no clear evidence of discrimination against American trade in Japan. There is a possibility that the Japanese Government may be influencing Japanese spinners to divert purchases of cotton to sources other than the United States, but no evidence which would support this suspicion has been unearthed.
In connection with the study of suspending Japan to which I have referred, consideration was given to the possible effects of retaliatory action by Japan against our trade. In view of the fact that Japan has reduced its imports from this and other countries to the barest essentials, the conclusion was reached that retaliatory action by Japan would not have a significant effect upon our trade with her at the present time.
These conclusions tend to suggest that termination of the treaty would have little effect upon the present trade situation. Furthermore, it is open to question whether Japan would have anything to gain in the immediate future by pursuing an openly discriminatory trade policy in so far as the United States is concerned.
On the other hand, termination of the treaty, unless it were replaced by a new one, would remove one important barrier to the adoption of a more openly bilateralistic policy by Japan and would wipe out whatever protection the treaty offers for future trade development. Both of these possibilities would appear to warrant further consideration.
The foregoing comments relate solely to the commercial clauses of the treaty. I assume that consideration will be given in other divisions to the value to us of the provisions dealing with navigation, residence and related matters.
I should like to venture one further suggestion in the event that it is decided to terminate the treaty. It is that notice of termination not be given on the ground that Japan has violated the treaty. Japan has in many instances been excluded from the benefit of trade-agreement concessions on products in which she is interested by the establishment of subclassifications and value brackets. However justifiable this policy may be, Japan would doubtless charge that we have violated at least the spirit of the treaty ourselves.
The particular case which is dealt with in the attached file37 involves a matter of disputed interpretation. An open charge that Japan has violated the treaty might cause the Japanese to claim that tariff specialization in our agreements has been carried to such an extent as to represent a wholesale evasion of our obligations. While we could defend our action in these instances to our own satisfaction the questions involved are highly technical ones and some doubt as to whether we are not ourselves guilty of evading the treaty might remain in the public mind if there were a controversy on the subject.
[Page 246]If an alternative reason for termination is desired, and if we would be prepared to enter into new negotiations with Japan, we might give as a reason for termination our desire to have the treaty revised in the light of modern conditions and requirements, citing the action we have already taken in the case of our treaty with Italy.38 Both the treaty of 1911 and our earlier treaty of 1894 with Japan39 (the provisions “relating to tariff” of which are still in force) contain the most-favored-nation clause in its conditional form. Furthermore, any embargo upon the shipment of arms or other commodities to Japan would apparently conflict with the two treaties. A proposal could be made to Japan that the provisions of the 1911 treaty be brought up-to-date. If negotiations for a new treaty were undertaken, it is to be assumed that this Government would insist upon the inclusion of a reservation similar to those contained in our Italian modus vivendi and our trade agreement with Czechoslovakia40 permitting the application of measures “relating to neutrality”.
If, however, it is desired to place our relations with Japan on a more flexible basis and the suggestion that the treaty be terminated does not envisage any new arrangement with Japan of either a temporary or a long-term character, consideration might be given to the desirability of terminating the treaty without an explanation or merely with the statement that it no longer corresponds to present-day conditions and requirements.41
- See also memorandum of October 10 by the Chief of the Division of Far Eastern Affairs, vol. iv, p. 62.↩
- Signed at Washington, February 21, 1911, Foreign Relations, 1911, p. 315.↩
- Not found in Department files.↩
- Identity not recorded.↩
- For denunciation of the treaty, signed February 26, 1871 (Malloy, Treaties, 1776–1909, vol. i, p. 960), see Foreign Relations, 1936, vol. ii, pp. 339 ff. For text of temporary commercial arrangement of December 16, 1937, see 51 Stat. 361.↩
- Signed at Washington, November 22, 1894, Malloy, Treaties, 1776–1909, vol. i, p. 1028.↩
- Signed March 7, 1938; 53 Stat. 2293.↩
- Marginal comment at end of memorandum by the Adviser on Political Relations, Hornbeck: “If any reason is given it should be (only) that we wish to be free to deal as we see fit with matters now covered by the treaty.”↩