751G.94/342: Telegram

The Ambassador in Japan (Grew) to the Secretary of State

650. The French Embassy has given us in the strictest confidence the texts of the agreement signed yesterday between Indochina and Japan consisting of 2 accords and 6 documents relating thereto.96

The two accords signed were, one, “Franco-Japanese agreement concerning customs commercial exchanges and methods of payment”. [Page 145] Under this agreement the most-favored-nation treatment is to be accorded to the imports into each country from the other with special reductions of from 20 to 60 percent or exemptions from duties as provided in two lists of articles annexed to the agreement. Payments shall be made in piasters and yen into accounts in the Bank of Indochina and the Yokohama Specie Bank and the conversion rate between the two banks to be on the basis of the gold value of the currencies calculated in a foreign currency convertible into gold. A special account is to be established in the Yokohama Specie Bank covering the payments by Japan for rice, the proceeds of which will be balanced with the general account only at the end of a year and any balance of over 5 million yen or its equivalent in piasters is to be settled in a foreign exchange convertible into gold. The agreement is to continue in effect until December 31, 1943.

2. “Franco-Japanese convention of establishment and navigation concerning French Indochina”. Provisions of the convention were generally indicated in the announcement of the Foreign Office transmitted in the Embassy’s telegram number 645, May 6, 10 p.m.97 The convention is concluded for a period of 5 years. In both the agreement and the convention it is provided that the stipulations are not to apply inter alia “to special advantages resulting from a customs union” and, in the case of agreement, to advantages granted or to be granted to Japan by Manchukuo.

The six related documents consisting of several exchanges of communications between the French and Japanese representatives, a “procès-verbal”, and a protocol are briefly summarized.

1. The Japanese Government agrees that pending ratification provisions regarding most favored nation treatment, import and export quotas and methods of payment specified in the treaty shall become effective immediately. Both Governments undertake to exert efforts to secure ratification of the agreements within 2 months.

2. Regarding treatment of Japanese nationals, the French Government agrees to equal application of control measures, to consideration of the abolition of visa requirements, to equality of treatment regarding concessions, and to establishment of Japanese schools.

3. Trade rights and privileges of Japanese.

Certain professions now prohibited to foreigners are opened to Japanese, specified percentages of Japanese personnel in banking, commercial and other enterprises are permitted, real property and agricultural, mining and hydraulic power concession rights are granted with provision for capital holdings equally between Japanese and French.

4. Trade regulations.

Quantities of exports and imports between Japan and French Indochina for 1941 are specified, including 700,000 metric tons of rice and 15,000 metric tons of raw rubber for Japan. Payment for the [Page 146] latter is to be made in United States dollars. These quotas may be revised should the requirements of France or French colonies increase. The Japanese Government agrees to reduction of tariff duties on rice. Subject to certain restrictions Japanese firms are permitted to belong to the Indochina Federation of Importers and Indochinese firms to join Japanese trade associations. No discrimination of treatment between Japanese and Indochinese firms is to be permitted. Periodic economic conferences and permanent secretariats in Japan and Indochina are to be set up and provision is made for further discussions regarding commercial problems affecting the two countries.

  1. Texts in French and Japanese were forwarded in covering despatch No. 5583, May 8; received June 2. For French texts of the two accords, see British and Foreign State Papers, vol. cxliv, pp. 767 and 775.
  2. Not printed.