Memorandum of Conversation, by Mr. Vernon L. Phelps of the Division of Trade Agreements

Participants: The Egyptian Minister
Mr. Sayre12
Mr. Phelps

The Egyptian Minister stated that he had called to present certain views of his government relating to trade relations between his country and the United States, which he hoped would be given consideration by the Committee which he understood was now about to complete its studies regarding the possibility of a trade agreement between Egypt and the United States. During the conversation the Minister handed the attached aide-mémoire13 to Mr. Sayre.

The Minister stated that Egypt has not imposed any special trade barriers to imports from the United States. In support of this statement he pointed out that in 1938 the United States share of the Egyptian import trade had increased and that the United States had “jumped” from fifth to fourth place as a supplier of the Egyptian market. On the other hand, the United States tariff duties on cotton, manganese, and onions, the principal products imported from Egypt, had caused United States imports from Egypt to drop sharply.

Mr. Sayre stated that we had reduced the duty on manganese, and that inasmuch as we were according most-favored-nation treatment to imports from Egypt, the benefit of this reduction was extended to Egypt. The Minister replied that this tariff reduction on manganese did not apply to the grade of manganese which Egypt produced. (Subsequent investigation revealed that the Minister’s statement was technically incorrect, since the reduction in the duty in the Brazilian agreement14 from 1¢ to ½¢ per pound (the maximum reduction authorized under the Trade Agreements Act15) on the metallic manganese contained in the ore applies to the entire tariff paragraph 302 (a), “Manganese ore (including ferruginous manganese ore) or concentrates, and manganiferous iron ore, all the foregoing containing in excess of 10 per centum of metallic manganese.” However, it appears that although technically the aforementioned reduction applies to Egyptian ore, nevertheless this reduction is not sufficient to benefit [Page 490] Egypt substantially because of the low metallic manganese content of the Egyptian manganiferous iron ore. In this connection it may be noted that in the Tariff Act of 192216 manganese ore containing in excess of 10 percent but not more than 30 percent manganese was free of duty, whereas in the Tariff Act of 193017 the duty is applicable to ores containing in excess of 10 percent.)

The Minister continued that he had been sent here last September primarily for the purpose of endeavoring to improve the trade relations between our two countries, and that he hoped that within six months after that date to be in a position to report some progress to his Government; that is, he hoped that he might receive some concrete encouragement not later than the end of April. Mr. Sayre stated that other governments were also pressing us for agreements, but that, as the Minister was doubtless aware, our trade-agreements program is now under heavy attack in Congress; that while a reduction in the duty on long staple cotton is probably economically justifiable, yet at this particular juncture any such reduction might further increase the opposition to the entire trade-agreements program. Therefore, he hoped the Minister and his Government would realize that it was in their own interest not to press for an agreement too rapidly at this time. The Minister replied that, as the Department had doubtless been informed by its Legation at Cairo, his Government had also been under pressure from Egyptian cotton exporters to obtain relief from the present United States duty on long staple cotton.

Mr. Sayre concluded the conversation by assuring the Minister that he might inform his Government that we were continuing to give the matter active study and would give careful consideration to the contents of the aide-mémoire.

  1. Francis B. Sayre, Assistant Secretary of State.
  2. Not printed; it was similar to the aide-mémoire dated March 15, p. 487.
  3. Signed February 2, 1935, Department of State Executive Agreement Series No. 82, or 49 Stat. 3808.
  4. Approved June 12, 1934; 48 Stat. 943.
  5. Approved September 21, 1922; 42 Stat. 858.
  6. Approved June 17, 1930; 46 Stat. 590.