811.20 Defense (M) Swiss Jewels/9–1445: Telegram
The Acting Secretary of State to the Minister in Switzerland (Harrison)
2849. Urtel 4144, Sept. 14.47 Dept greatly disturbed by evasive reply re watch machinery as well as by absence of reference to subject of Swiss exports to US of watches and movements re Dept’s instruction 3010, June 13.47
Please request Swiss Government to provide at very early date (within one week if possible) indication of anticipated volume of exports of watches and watch movements to US during balance of 1945 and during first half of 1946.
You should orally inform Swiss Govt, if you perceive no objection, that this Govt is concerned lest American watch industry be injured substantially by excessive imports of watches and watch movements, and that during recent weeks, and particularly since termination hostilities against Japan, American watch industry representatives have continued to urge strongly that quantitative limitation be imposed upon imports into US of watches and movements. Consequently, you should state that unless aforementioned info is received in very near future Dept is unable to foretell what future action this Govt may find itself compelled to take re future imports of watches and movements from Switzerland.
Also you should state that, although importance of watch industry to Switzerland is recognized, it is view of this Govt that continued [Page 799]Swiss refusal (reurtel 4144, Sept. 14) will be detrimental generally to commercial and other relations between US and Switzerland and particularly to Swiss watch industry. In this connection such continued export prohibition will doubtless lead to manufacture of this machinery in US. Should production cost in US be greater than cost of importing similar Swiss machinery competitive position of American watch industry as compared with Swiss watch industry might be affected adversely. Such situation would inevitably cause representatives of American watch industry to press even more strongly for quantitative limitation on future imports into US of Swiss watches and movements.
As you know, Article VI of our Trade Agreement prohibits imposition of import or customs quotas, import licenses, or any other form of quantitative regulation. For your background information, we of course would be very reluctant to give notice of termination of the Trade Agreement in order to obtain freedom of action to impose quotas in the event that mutually satisfactory solution of imports into US of watches and movements is not reached at early date. However, if it appears that imports are becoming excessive we might be compelled as a last resort to give such notice. If quantitative limitation should prove necessary during reconversion period, we would prefer Swiss Govt agree to limit exports from Switzerland to import quotas by US.
For your info only Swiss Legation here intimated that perhaps delay in reply to our request stems from Swiss Govt’s desire to use matter of watch machinery and watch exports as a bargaining power re other economic matters now being discussed. Should you be unable to secure reply to our request, Dept would appreciate your ascertaining, if possible, reasons behind Swiss non-compliance.