The Department of State to the Swiss Legation
The Government of the United States greatly appreciates the willingness of the Swiss Government to discuss the problem of the exportation [Page 807]of watches and watch movements from Switzerland to the United States for the year 1946 and its readiness to consider the ways and means of limiting such exportations to the United States by way of third countries. The Department of State is giving careful consideration to the suggestions set forth to this end in the aide-mémoire of December 15, 1945 from the Legation of Switzerland.
It is the opinion of the Government of the United States, however, that the general problem which has arisen at this time can be alleviated only to a minor extent by curtailing indirect exports. Readily obtainable information indicates that, for the years 1943 and 1944, approximately fifty percent of the United States imports of watches and watch movements from Switzerland did come by way of third countries, but more recent data tend to indicate that this percentage has materially decreased in 1945, probably because of the end of abnormal wartime practices and conditions. Parallel with the decrease in the volume of indirect shipments, there has been an exceptionally large increase in the number of watches and watch movements imported into the United States directly from Switzerland. In this instance, the Government of Switzerland in an aide-mémoire of September 5, 1945 to the United States Minister in Bern estimated that watch and watch movement exports from Switzerland directly to the United States for the year 1945 in all probability would be in excess of 8,000,000 units.
Therefore, in view of the decreasing significance of indirect shipments, the Government of the United States is convinced that, in addition to any reduction of indirect shipments, it is necessary that direct exports from Switzerland to the United States be also limited. Since it is intimated in the Legation’s aide-mémoire of December 5 [15?], 1945 that the Swiss Government believes that feasible means can be found to limit indirect exports to the United States, it would appear that direct exports of watches and watch movements from Switzerland to the United States could also be readily controlled.
The Government of the United States will be glad to confer immediately with the Swiss Government but is convinced that the discussions should be on the entire problem of the export, direct as well as indirect, of watches and watch movements from Switzerland to the United States, and on the general basis of the proposals outlined in this Department’s aide-mémoire of November 30, 1945.
These proposals are: 1) a quantitative limitation on the exports of watches and watch movements from Switzerland to the United States for the thirteen-month period ending December 31, 1946; 2) a supplemental agreement conforming in substance to Article XI of the Trade Agreement between the United States and Mexico; and 3) failing the ability of the Swiss Government to accept the proposals suggested in 1) and 2) above, a supplemental agreement to permit [Page 808]the Government of the United States to establish a quantitative limitation upon the importation of watches and watch movements for the thirteen-month period ending December 31, 1946.
The Government of the United States has upon several occasions within recent months brought to the attention of the Swiss Government the difficulties which certain United States nationals and companies have been experiencing in obtaining watch-making machinery from Switzerland. A similar circumstance with respect to jewel bearings has now arisen. It appears that the various firms in Switzerland are unable to secure permits for the export of these items to the respective American firms. Recent action of the Swiss Government indicates that this problem of the export of watch-making machinery and jewel bearings is closely associated with the general problem of the export of watches and watch movements from Switzerland to the United States. The Government of the United States also regards these matters as closely associated and desires that these problems be discussed simultaneously.
It is believed, therefore, that immediate discussions should take place to determine the manner and extent of control over shipments from Switzerland and the intentions of the Government of Switzerland with respect to the other proposals and matters set forth above.
[In a memorandum directed by the Swiss Legation in Washington to the Department of State on April 22, 1946, the Legation declared that it was the intention of the Swiss Government to take certain steps designed to contribute materially to a solution of the problems of the American watch industry during the period of conversion to civilian production. For texts of the exchange of memoranda of April 22, 1946, between the two Governments concerning the exportation to the United States by the Swiss of watches, watch movements, watch-making machinery, and jewel bearings, during the period January 1, 1946, to March 31, 1947, see Department of State Bulletin, May 5, 1946, pages 763–764.]