611.60H31/183: Telegram

The Secretary of State to the Minister in Yugoslavia (Lane)

47. Your 283, September 21, 11 p.m. Department’s instruction No. 133, August 29, and telegram 45, September 21, 2 p.m. The Yugoslav Minister has been back in Washington since August 10 but [Page 883]has not as yet submitted any trade-agreement proposal on the part of his Government. However, the Counselor of the Legation under instruction from his Foreign Office called at the Department on September 20 to inquire as to the possibility of making a separate arrangement whereby Yugoslav hops could obtain the rate of duty previously provided by the Czechoslovak trade agreement. The Counselor stated that hops were to be included in the prospective trade-agreement negotiations between the two countries, but that his Government was anxious to obtain some immediate relief since this is the shipping season for hops. He was informed in reply that there was no way by which such a special arrangement might be undertaken.

In your forthcoming discussions with Pilja you may refer to the information given in the above paragraph and point out that a commitment to modify a rate of duty can be given only in connection with the negotiation of an agreement under the Trade Agreements Act.9 The negotiation of such an agreement requires in accordance with law certain procedural steps here, including public notice and hearings. In order to avoid the taking of such steps without assurance that there is a reasonable prospect for successful negotiations, it is our practice to attempt to reach, in advance of giving public notice, an understanding with the government concerned as to the general basis on which an agreement might be concluded, although no commitment can be given as to the concessions which we might grant in an agreement.

The basis for the negotiation of such an agreement includes on the one hand acceptance by both countries of the principle of unconditional most-favored-nation treatment with respect to all forms of trade control as expressed in the general provisions contained in the trade agreements negotiated so far by the United States and on the other hand a realization by the Government of the other country that the United States is not in general in a position to grant concessions to the other country on products of which that country is not the principal or an important supplier.

You may indicate that in view of the present international situation there had been some doubt whether the Yugoslav Government would be prepared to enter into a discussion of a possible trade agreement with the United States or to conclude such an agreement. Moreover, it was thought from the previous discussions concerning the application of the Yugoslav import control to American products that the Yugoslav Government would not be willing to conclude an agreement with the United States containing the general provisions contained in trade agreements concluded by this country. However, if the Yugoslav Government is prepared at this time to offer a [Page 884]proposal for trade-agreement negotiations between the two countries, with the considerations mentioned in the preceding paragraphs in mind, it would be given careful consideration by the Government of the United States.

For your information, it would appear that the feasibility of negotiating a successful agreement with Yugoslavia rests largely upon the Yugoslav Government’s ability to accord the products of this country non-discriminatory treatment in the application of all aspects of the Yugoslav import control, as outlined in the Department’s instruction No. 133, and its willingness to enter into a published agreement containing general provisions providing for such treatment.

Hull

[Discussions with the Yugoslav Government regarding a possible trade agreement were not continued.]

  1. Approved June 12, 1934; 48 Stat. 943.