The Secretary of State to the Ambassador in Turkey ( MacMurray )
4. The initialed text of the trade agreement has been examined by the competent officials here and it has been found necessary to make certain changes.
1. With respect to the Balkan clause,17 you should express to the Turks the substance of the following. This clause was not definitively accepted by your Government because it is its established policy to avoid acceptance of new exceptions to the most-favored-nation clause and hence to include only such exceptions as relate to preferences already established and in operation. In this connection, the public announcement of supplemental trade-agreement negotiations with Cuba, issued November 30, 1938,18 states that “no increases in the guaranteed percentages of preference in tariff rates will be made.” Furthermore it has been our aim to reduce existing preferences wherever possible, as was done in the case of the British agreement. Our acceptance of the Balkan clause in the unqualified form proposed by the Turks would cause serious embarrassment in connection with conversations preliminary to trade-agreement negotiations with certain countries which are anxious to secure our acceptance of similar exceptions to the most-favored-nation clause.
Nevertheless, since the Turks claim that they have a moral obligation to include the Balkan clause in their commercial agreements, we will not reject it outright, but will accept it subject to the following modifications:[Page 862]
A. In the phrase “or to the countries of the Balkan Entente” substitute “within” for “to”, in order to make it clear that customs tariff advantages only are contemplated;
B. Insert in the note to be exchanged at time of signature, after numbered paragraph 4, the following:
“5. With respect to preferences in favor of the countries of the Balkan Entente, provided for in subparagraph (c) of Article 11 of the Trade Agreement signed this day, it is the intention of the Government of the Turkish Republic not to impair the effectiveness of this Trade Agreement, and hence to avoid injury to the commerce of the United States of America, in the creation of such preferences.”
With the insertion of this paragraph, the paragraph now numbered 5 in the note would become numbered paragraph 6.
You may say to the Turks that this proposed insertion is motivated by considerations related to future negotiations with other countries, and that we anticipate no injury to American trade in the present instance.
Consideration has been given to the addition at the end of the Balkan clause of “so long as such advantages are not extended to any other than the aforementioned countries”. It was decided not to make this addition because the meaning of these words is already contained in the agreement. You should, however, make sure that the Turks agree with this interpretation of the agreement.
2. You should explain to the Turks that the agreement, when proclaimed, will become a part of the law of our country and its interpretation may become a subject of litigation. Furthermore, any misinterpretation of the provisions of the agreement by political opponents or misunderstanding by interested traders may cause serious embarrassment. Hence our legal experts have found it necessary to make certain changes which do not alter the intended meaning but merely clarify it. The changes listed in this numbered paragraph are considered essential.
[Here follows a detailed list of changes in Schedules and phraseology.]