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

Participants: The Egyptian Minister
Mr. Mohamed Awad El Koni, Attaché, Egyptian Legation
Mr. Hawkins
Mr. Phelps

The Egyptian Minister and Mr. El Koni came in at the Minister’s request to discuss certain points contained in the informal memorandum dated August 8, 1939 which was prepared for the Minister following his conversation with Mr. Hawkins and Mr. Phelps on July 31, 1939 regarding the possibility of undertaking trade-agreement negotiations between the United States and Egypt.

As to the statement in paragraph numbered 1 of this memorandum to the effect that we would be prepared to take the 1938 Egyptian statistics into account in determining the products with respect to which the United States is the principal or an important supplier of the Egyptian market and with respect to which we would therefore expect consideration to be given by the Egyptian Government to the possibility of granting a concession, it was explained, in reply to a question from the Minister, that we normally use trade statistics covering a period of years in determining our position as a supplier, and that we would be prepared to follow this practice in the case of Egypt.

The Minister expressed dissatisfaction with the last sentence in the memorandum to the effect that, pending the outcome of the meeting on cotton to be held in Washington in September, and the definitive formulation of our domestic cotton program we were unable to decide whether a concession could be granted on long-staple cotton. He said that this seemed to him a qualification of the statement contained in our previous memorandum of April 24, 1939 regarding the possibility of a concession on long-staple cotton, and that it therefore constituted a recession from our previous statement on this subject. An endeavor was made to explain to the Minister that this statement merely supplemented, [Page 504] and brought up to date, the statement contained in the memorandum of April 24, and repeated in the last paragraph (numbered 3) of our memorandum of August 8, that we would be prepared to give active consideration to the possibility of granting a reduction in the duty on long-staple cotton, 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 negotiations. It was stated that this sentence was intended to indicate certain developments which had arisen subsequent to our memorandum of April 24 which of necessity must be taken into account in reaching a decision whether a concession could be made on long-staple cotton and active negotiations undertaken, including the issuance of a public notice of intention to negotiate a trade agreement with Egypt.

The Minister was not entirely satisfied with this explanation, and stated that he was reluctant to forward the memorandum to his Government containing this statement. At the Minister’s request it was agreed to give further consideration to the possibility of modifying the statement, although Mr. Hawkins assured the Minister that there was little likelihood that this could be done. It was also agreed that meanwhile the Minister would not transmit the text of our memorandum to his Government, at least until after the meeting on cotton to be held in Washington beginning September 5, but would simply report to his Government the substance of the remainder of the memorandum.