711.962/7–848: Telegram
The Secretary of State to the Embassy in the Philippines
926. Dept seriously disturbed by wide area disagreement revealed by Embtels July 8–171 and requests American negotiators, subject Emb concurrence, make general statement re views US Govt re Treaty negotiations to Phil negotiators or, if Emb believes desirable, to Quirino.
Following conclusion US-Phil Trade Agreement,2 Dept faced with question whether necessary initiate commercial treaty negotiations with Phil Govt. Although American nationals and business interests already given broad rights and protection Articles 7 and 10 para 4 trade agreement, it was nevertheless decided Dept should initiate discussions for following reasons:
- (1)
- Considered desirable provide for long-term friendly relations. Dept considers FCN treaties are basic in relationships between countries. In view traditional ties with Phil, Dept considered it appropriate initiate negotiations with view achieving liberal and mutual basis for relationship.
- (2)
- During period Trade Agreement, US rights protected in Philippines, but TA does not give comparable protection rights Filipinos and Philippine business interests in US. Dept felt legal basis for Phil rights in US and protection Phil interests would serve preserve and strengthen close ties between two countries.
Following agreement with Roxas preliminary discussions designed to locate possible areas disagreement carried out Washington June 10 to July 10, 1947. Thereafter Roxas agreed that formal negotiations take place Washington and informed this Govt he was authorizing Phil Emb officials proceed. In formal negotiations July 15 to Sept 3 areas disagreement revealed in previous discussions further examined. [Page 629] US made concessions many points. In commenting on treaty draft and report transmitted Manila by Phil negotiators Roxas told American Chargé (urtel 1231, Aug 25, 19473) he was disturbed only by national treatment provisions re practice professions. When negotiations resumed July 2, Dept felt that talks would be limited to few outstanding matters.
In view foregoing and mutual nature proposed treaty provisions Dept surprised and discouraged by Phil objections such matters as provisions re quantitative restrictions, NT re internal taxes, NT re matters listed para 2 Art 1, and reluctance subscribe unconditional MFN.
Dept wishes emphasize:
- (1)
- US is not asking Phil for rights it is not prepared give or rights it would not ask of other independent Govts.
- (2)
- Proposed provisions in harmony with provisions GATT and ITO, with Phil desire attract American capital, and with international measures designed further economic development. Certain provisions objected to by Phil Govt, such as unconditional MFN and NT for internal taxes are widely accepted as standard trade agreement and treaty provisions. Dept sincerely believes that Phil repudiation essential principles international economic cooperation not in best interests Phil economic development and prosperity or friendly relations other members family nations.
US will be unable in course negotiations surrender central and internationally accepted principles such as unconditional MFN, national treatment internal taxes and sale distribution use, and provisions re quantitative restrictions though in latter case may be able present language permitting Phil take advantage GATT and ITO privileges. Although some compromises may be possible re subject matter Arts 1 and 2, US could not accept treaty with drastic revisions proposed by Phil Govt. Particularly, Dept could not in commercial treaty yield all rights national treatment commercial activities. Emb should decide whether should mention at this point inability make Art 7 Trade Agreement mutual. Telegraphing separately re Art 7.4
On some points Dept would hope that mutually acceptable formulas could be negotiated. Such matters might include mining, real property, and residence tax on foreigners. In some other cases changes could probably be worked out to accommodate Phil laws and practices without sacrificing principles involved.
Statement should conclude if Emb considers desirable with question directed to Phil representatives whether in view foregoing views there appears to be substantial hope mutually acceptable treaty can [Page 630] be negotiated. If Phil answer negative and Emb does not believe further negotiations this time promising, Emb authorized suggest indefinite postponement further negotiations.
If Emb’s assessment situation not so pessimistic as Dept’s, and Emb does not wish take strong line of previous paragraph, it may omit question proposed and conclude statement with expression US hopes prospects successful negotiations will be strengthened by its frankness at this time.
If Emb believes useful, it might at time of statement hand memorandum along same lines.5
Hope transmit views re all specific questions to date by July 23.
- Not printed.↩
- Signed at Manila, July 4, 1946; 61 Stat. (pt. 3) 2611.↩
- Not printed.↩
- Telegram 927, not printed.↩
- In telegram 1358, July 26, 10 a. m., from Manila, not printed, Chargé Thomas H. Lockett expressed the opinion that the moment was not propitious for presenting these views, but he would hold the contents of telegram 926 for higher level discussions.↩