Memorandum of Conversation, by the Assistant Chief of the Division of European Affairs (Culbertson)
Mr. Garreau-Dombasle16 came in this morning in order to go over with me a telegram which the French Embassy had just received from the appropriate authorities in Paris, the telegram relating to the proposed trade agreement negotiations.
Mr. Garreau-Dombasle was first instructed to bring to our attention, merely for our information, the fact that from April 1 to July 1 the French Government had made purchases of airplanes, engines, etc. in the United States totaling in value 1,933,185,141 francs. The Air Ministry has also just passed another order for engines, etc. valued at 45,665,000 francs.
With regard to the trade agreement, the French Government is prepared to proceed immediately with announcement of intention to negotiate on the following understanding:
(1) The commodities which are to be listed in the published notice will include all those submitted by us to the French on the understanding that those lists will include the items set forth in the attachment17 to this memorandum.
The French would, however, insist that items in the present agreement with certain exceptions be not brought up for further negotiation but that they be renewed in their present form.
(2) The French state that if we insist they are agreeable to an agreement which provides for a period of two years for denunciation. This would apparently involve a two years agreement with provision [Page 491]that at the end of two years agreement could be terminated on a six months notice.
The French insist, however, that on such a basis paragraph 5 of Article I of the present agreement must be maintained. They also state that special mention must be put in the agreement that in case of a general revision of the French tariff then a six months notice period would be applicable. (Garreau-Dombasle feels that paragraph 5 of Article I is all that will be necessary in this connection.)
(3) French concessions to the United States must be limited to the extension of minimum duties on certain items now in the exception list, and to the granting of additional or new quotas to the United States. They specifically state that there can be no reductions in the present French minimum tariff.
In so far as our demands in respect of concessions in the colonial areas are concerned, the French say that they can make no commitments in this respect until after negotiations have been opened.
The telegram Garreau-Dombasle had received kept harping on the concessions which they want on former Czech items. The telegram even goes to the point of saying that the French would not wish to complete negotiations until after the Belgian agreement had been completed in order that they could determine whether the Belgians had been accorded duty concessions on the Czech items which were of interest to the French.