The Secretary of State to the Embassy in the Philippines

No. 405

The Secretary of State refers to the Department’s instruction No. 256 of March 7, 194722 concerning the interpretation of paragraph 4 of Article X of the United States-Philippine Agreement on Trade.

With respect to the interpretation of paragraph 4, the Department has taken the position that as a general rule it should not recommend to the President that he suspend part or all of the Agreement, or use a threat of terminating the Agreement as a means of protecting American nationals and business interests, except in cases of failure of the Philippines to grant American nationals and business interests:

most-favored-nation treatment;
such national treatment rights as may be specifically accorded in treaties and agreements between the United States and the Philippines, particularly the Treaty of Friendship, Commerce, and Navigation, which it is hoped will be negotiated in the near future;
pending the conclusion of the United States-Philippine Treaty of Friendship, Commerce, and Navigation, national treatment in those matters customarily the subject of such treatment in more recent United States treaties of friendship, commerce, and navigation;
national treatment in matters with respect to which Philippine nationals and business interests are granted national treatment in the United States.

It is contemplated that the above policy decision would be subject to review in the event that a satisfactory treaty of friendship, commerce, [Page 1114] and navigation between the United States and the Philippines is not concluded within a reasonable time.

This policy guide has been formulated for the confidential use of officers of the Department and the Embassy in dealing with current problems relating to the rights of American businessmen and the meaning of “discrimination” as used in the Agreement on Trade.

It is not deemed advisable to inform the Philippine Government of the above policy decision at the present time, in part, because if it knew of the position taken this Government’s bargaining power in commercial treaty negotiations would be impaired.

  1. Not printed.