The Secretary of State to the British Ambassador (Lothian)
Excellency: With further reference to the Embassy’s note of December 30, 1938 conveying the acceptance of the Indian Government of this Government’s proposal of May 12, 1938 for the negotiation of a treaty of commerce and navigation between the United States and India, and with reference to the Embassy’s note of March 14, 19397 inquiring as to the status of this matter, I now have pleasure in transmitting herewith a draft of a treaty of establishment, commerce, navigation and consular rights between the United States of America and India.
As of possible assistance I wish to offer some comment on the various articles of this draft. Paragraph 1 of Article I provides that nationals of either country may enter the territories of the other country on the same terms as nationals of the most favored nation. While paragraph 8 of this Article reserves the operation of immigration laws specific provision is made by means of the proviso in that paragraph that nationals of each country may enter the other country to carry on trade between the two countries, or to engage in any activity related to or connected with the carrying on of such trade upon the same terms as nationals of the most favored nation. It is believed that the granting of this right, which is considered to be one of the important considerations in these negotiations, will meet the desire of the Indian Government that nationals of India shall have their rights to enter and reside in the United States to engage in international trade enlarged.
Other paragraphs of Article I deal with rights of nationals of either country within the territory of the other country. Paragraph 2 [Page 353]grants, on a most-favored-nation basis, rights to travel and reside and to engage in professional, commercial and other work. In this connection, it may be pointed out that paragraph 3 of Article XVI defines most-favored-nation treatment as treatment accorded to the most favored third country, including the United Kingdom of Great Britain and Northern Ireland.
Paragraph 3 of Article I deals with rights in connection with the acquisition, possession and disposition of immovable property. These provisions are practically identical with those embraced in Article 1 of the treaty of friendship, commerce and navigation between the United States and Siam, signed November 13, 1937.8 The provisions of the treaty with Siam were elaborated after considerable study, and as the Senate of the United States gave its advice and consent to the ratification of that treaty it is believed that the provisions would be accepted by the Senate if included in a treaty applicable to India. Three copies of the treaty with Siam are herewith enclosed.
The remaining paragraphs of Article I are practically identical with provisions in treaties now in force between the United States and several other countries, or differ only slightly from the provisions of those treaties.
Articles II to VI, inclusive, embrace, generally speaking, applications of the most-favored-nation principle in regard to commerce and the principle of national treatment in regard to navigation.
Article VII contains reservations with respect to the adoption of prohibitions or restrictions on the importation or exportation of certain articles and the adoption of neutrality measures and of sanitary measures.
Article VIII provides for most-favored-nation treatment in respect of the exploration for and exploitation of mineral resources. With respect to a specified list of resources, including oil, it provides for national treatment in the ownership of stock of domestic corporations. The proposed Article conforms to the United States Mineral Leasing Act, approved February 25, 1920 (41 Stat. 437). In drafting this Article the provisions of the British Petroleum (Production) Act of 1934 and Regulations, were kept in mind.
Article IX of the draft provides for both national and most-favored-nation treatment in connection with industrial and intellectual property.
The provisions of Articles X to XIV, inclusive, relate to consular officers. While it was not at first contemplated that the treaty would contain provisions relating to consular officers, this Government suggests that it is possible to deal briefly but adequately with this subject [Page 354]in the present treaty. The five articles concerning consular rights are entirely standard and may be found in many treaties now in force between the United States and other countries.
Provisions such as those embraced in Article XV of the draft treaty terminating the operation of the existing convention of commerce and navigation between the United States and Great Britain so far as it affects commerce, navigation and consular rights between the United States and India seem necessary.
Paragraph 1 of Article XVI relating to the territorial applicability of the treaty provides that the treaty shall extend, on the part of India, to India, including the Indian States. This Government would be desirous of extending to Burma the provisions agreed upon in respect of India in the same instrument if possible, or in another instrument, if necessary.
Your Excellency will note that Article XVII provides for an initial term of five years. This Government would be disposed to accept an initial ten-year term, but in any case would desire to make the commercial provisions terminable within a shorter period, and to stipulate that the termination of the commercial provisions would not impair the operation of the remainder of the treaty.
This Government will be pleased to be informed in the near future of the views of the Indian Government with respect to the enclosed draft. It is understood, of course, that either Government may introduce changes at any time during the course of the negotiations.