611.8331/122
The Department of State to the Egyptian Legation29
Memorandum
Reference is made to the preliminary observations of the Committee on Foreign Trade in Egypt regarding the statements contained in the informal memorandum of April 24, 1939, relative to the products which might form the basis for reciprocal tariff concessions in the event it should be decided to undertake the negotiation of a trade agreement between the United States and Egypt. These preliminary observations have been given careful and sympathetic consideration by the interdepartmental trade-agreements organization of this Government, and, as a result, the following comments may be submitted:
1. In the event that a decision should be reached to proceed with active negotiations with a view to concluding a trade agreement between the United States and Egypt, this Government feels that it could not agree to the withdrawal of all of the items in List B contained in its memorandum of April 24, 1939. However, it would be prepared to give consideration to possible modification of both Lists A and B contained in the memorandum, including, as was pointed out [Page 502] in the memorandum, such revision of these lists as may be found necessary in the light of information which might be received from the trade following any public notice of intention to negotiate a trade agreement with Egypt. In this connection, the attention of the Egyptian authorities is invited to the fact that it is the general policy of this Government in its trade-agreement negotiations to request concessions on products in respect of which the United States is the principal or an important supplier of the other country’s imports. With respect to the suggestion of the Egyptian Committee on Foreign Trade that statistics covering imports into Egypt during 1938 be taken as the basis of discussion rather than those for 1937, this Government is prepared to take the 1938 statistics into account in determining the relative position of the United States as a supplier of the Egyptian market. It would not maintain a request for a concession on a product with respect to which it is clearly shown that the United States has been, or is likely to be, a minor supplier of the Egyptian market. This Government also desires to point out that its trade agreements with other countries usually include reciprocal assurances that existing moderate duties on certain products will not be increased during the life of the agreement as well as reciprocal assurances that reductions from existing high rates of duty on other products will be maintained for the duration of the agreement.
2. It is also the general policy of the United States to grant concessions only on products in respect of which the other country is the principal or an important supplier of the American market. Under this policy, this Government would not be in a position to consider granting any concession on cottonseed oil in a trade agreement with Egypt, for the reason that Egypt has supplied only a relatively small part, 10.7 percent, of the value of total imports into the United States during the period January 1, 1935–June 30, 1939. Statistics of imports of cottonseed oil into the United States during this period are shown in the following table. Prior to 1935, imports of cottonseed oil into the United States from all countries, including Egypt, were negligible.
[Here follows table of statistics on importation of cottonseed oil.]
3. A further matter mentioned in the memorandum of the Committee on Foreign Trade in Egypt is the possibility of a reduction in the United States duty on long-staple cotton. In this Government’s memorandum of April 24, 1939 it was stated that the United States would be prepared to give active consideration to the possibility of granting a reduction in the duty on this product, in the event an acceptable basis for proceeding with the negotiation of a trade agreement with Egypt was found, and it should be decided to undertake such negotiations. Since that date this matter has continued to [Page 503] receive the active and sympathetic consideration of this Government. However, pending the outcome of the meeting on cotton to be held in Washington in September, and the definitive formulation of its domestic cotton program, this Government regrets to state that it finds it is not able to decide whether a concession could be granted on long-staple cotton.
- Sent informally to the Egyptian Minister on August 9.↩