CFM Files
United States Delegation Journal
USDel (PC) (Journal) 55
The Commission took up Article 30 (General Economic Relations) of the Rumanian Treaty. In connection with subparagraph 1c, requiring most-favored-nation treatment in all matters pertaining to commerce and industry, M. Gerashchenko (USSR) spoke in favor of the Soviet proposal for an exception in the case of state enterprises. He said that the Treaty should not accord to UN nationals special rights with respect to industries which it was felt in the public interest should be nationalized. The proposed exception was designed to prevent United Nations interests from interfering with the implementation of the nationalization programs of the Rumanian Government. Mr. Gregory (UK) thought M. Gerashchenko’s fears were unfounded and pointed out that no special regime was sought under subparagraph 1c or under the alternative proposal of the UK, US and French Delegations. The alternative proposal required most-favored-nation treatment in state monopolies only in cases in which such monopolies or nationalized industries permitted foreign participation. Mr. Gregory said he thought that neither the USSR proposal nor the alternative proposal was necessary. Mr. Thorp (US) supported the remarks of Mr. Gregory. He also expressed full agreement with M. Gerashchenko’s position that there should be no interference with nationalization programs undertaken by the Rumanian Government. Mr. Thorp said he thought there was nothing in paragraph 1c, as it stood, which would have the effect of such interference. The United States Delegation felt that the most-favored-nation clause, as normally interpreted, would not accord any special privileges for foreign participation in cases where state monopolies existed. Since the matter had been raised, however, the United States Delegation felt that if there were to be a clarification of this point, it should be in the form of an interpretation rather than of an exception, and therefore supported the alternative proposal. Mr. Bartos (Yugoslavia) said he supported [Page 583] the USSR proposal. It was Rumania’s right to nationalize its industry and the treaty should not infringe on this right. Mr. Hajdu (Czechoslovakia) felt it important that most favored treatment should not be granted in connection with nationalized industry. He referred to Czechoslovak experience and said the problem must be solved through bilateral agreements.
M. Van Troostenburg de Bruyn (Netherlands) suggested a change in the sentence on civil aviation proposed by the U.S. Delegation for addition to sub-paragraph 1c. This was generally similar to the Netherlands amendment to the corresponding article of the Italian treaty and required Rumania to grant on the basis of reciprocity and without discrimination (1) the right to fly over Rumania without landing and (2) the right to land in Rumania for non-commercial purposes. This suggestion was taken up by the French Delegation as an amendment. M. Gerashchenko (USSR) opposed this amendment on the basis that it was not concerned with general economic relations but rather with national security; that there was no basis for imposing such a unilateral obligation; and that it would deprive Rumania of its independence with regard to the negotiation of bilateral agreements. He added that there were no fixed principles in matters of aviation and pointed out that some countries represented on the Commission were not represented at the Chicago Civil Aviation Conference. Mr. Thorp (US) indicated that since it would be difficult to apply the most-favored-nation provisions to civil aviation, the U.S. proposal was an attempt to provide for non-discrimination in civil aviation by the use of terms applicable to that field. It left Rumania free to establish whatever principles of civil aviation it wished, provided that it did so on a non-discriminatory basis. It did not limit Rumania in the matter of national security, nor in the negotiation of bilateral agreements, provided such agreements did not grant exclusive rights. Also, M. Gerashchenko seemed to have forgotten that this was a reciprocal matter, as made clear in paragraph 1, and not a unilateral matter. Moreover, the provision only applied for 18 months. It was being consistent with most-favored-nation treatment to include such a provision. M. Alphand (France) stressed the reciprocal nature of the provision. In any case, the provision would not restrict national defense measures to the extent that Articles 11 and 12 on armaments do. He said the clause was needed because it was essential to improve the transport system in Europe. The Chairman then declared the discussion closed on sub-paragraph 1c [sub-paragraphs 1a and 1b have not been discussed as yet in the Commission].82 The Commission then rejected, by a roll-call vote [Page 584] of 9 to 5, sub-paragraph 1c, including the USSR proposal concerning the nationalized industries and approved by a roll-call vote of 9 to 5 sub-paragraph 1 c including the proposal of the U.S., U.K. and French Delegations, Byelorussia, Czechoslovakia, Ukraine, USSR and Yugoslavia forming the minority in each case. It then began to vote on the French amendment to the U.S. proposal on civil aviation.83 M. Alphand (France), however, raised a textual point and M. Gerashchenko (USSR) then indicated that the French amendment and the U.S. proposal were conflicting. He said the French proposal provided for reciprocity whereas the U.S. proposal did not. M. Alphand did not agree. He said the French amendment merely added to the rights requested in the U.S. proposal. Mr. Thorp suggested a textual change which he thought would clarify the problem. M. Gerashchenko felt there should be further clarification of this as to whether the French proposal could be considered as an amendment to the U.S. proposal or as a separate proposal.