Foreign Relations of the United States, 1949, National Security Affairs, Foreign Economic Policy, Volume I

560.AL/8–2549: Airgram

The Chairman of the United States Delegation (Willoughby) to the Secretary of State

confidential

Annecy, August 25, 1949.

A-34. There is attached a copy of the Confidential Record of certain statements reported in USDel’s 12 to USPolAd, Berlin,¹ together with its two Annexes.

The Confidential Record has been noted without objection by the Military Governors, and has been formally given to the signatory countries in Annecy.

The text of the statement of the Military Governors as received by the US, UK, and French differed slightly, presumably because of errors in transmission, and the text was issued as it appeared likely to have been sent, and was noted without objection by the Military Governors,²

Willoughby

[Attachment]

Confidential Record of Meeting Held at Annecy on 25th July 1949, To Discuss Matters Arising on Western Germany

There were present representatives of the three Occupying Powers (France, United Kingdom and the United States), Belgium, Canada, China, Denmark, Dominican Republic, Greece, India, Italy, Netherlands, Norway, Sweden and the Union of South Africa. The representative of the Netherlands took the chair.

1. Statement by the Delegations of France, the U.K. and U.S.A. on behalf of their Military Governors regarding the tariff of the Western Zones of Germany.

The U.K. representative on behalf of the three Occupying Powers formally made the Statement attached (Annex 1) and stated that this was now released for public issue.

In discussion on the Statement the following points were made:

(a) In reply to enquiries whether the reduced rates of the German tariff resulting from the German-Czechoslovak tariff agreement of 1920 were now in force, the U.K. representative undertook to make enquiries.

(b) In regard to paragraph 1 of the Statement, an explanation was given of the phrase “quantitative and qualitative restrictions are not being applied”. It was emphasized that this Statement referred not to absolute quantitative restrictions on imports but merely to what are customarily called “tariff” or “customs” quotas. Further, that it referred merely to cases where the conventional (i.e. the lower) rate was subject to a quantitative or qualitative condition. In such cases the conventional rate is now applied without regard to these quantitative or qualitative conditions.

There was no implication that the existing German tariff classification is being simplified or varied in any way.

(c) The view was generally expressed in the meeting that it was necessary for the tariff as now applied to be available as a publication. It was agreed that the representations made would be passed on to the appropriate authorities in Western Germany.

(d) In regard to paragraph 2 of the Statement, the Leader of the Netherlands Delegation stated that he realised it was not possible at this meeting to discuss any future tariff of Western Germany but on behalf of the Netherlands and other countries he expressed the hope that they will not be confronted later with a finalised new German tariff before they have had the opportunity to negotiate on it, and that any such tariff would not be a high one applied for bargaining purposes.

This statement was noted.

2. Memorandum of Understanding relative to application to the Western Sectors of Berlin of the Agreement on Most-Favoured-Nation Treatment for areas of Western Germany under Military Occupation.

The U.K. representative while expressing preference for an informal Statement, agreed in view of the feeling of the meeting, to accept the Memorandum of Understanding (of which the text is attached as Annex 2) subject to a proviso to the effect that the Memorandum of Understanding would only apply provided that the present relationship between the Western Sectors of Berlin and the Western Zones of Germany is maintained or strengthened. This was agreed in substance but it was decided that the proviso should be inserted not in the Memorandum of Understanding itself but in the confidential record of the meeting.

(b) The hope was widely expressed, and noted, that all possible steps would be taken to safeguard the conditions of the Agreement in regard to the Western Sectors of Berlin.

(c) It was agreed that the Memorandum of Understanding should be put into formal shape and opened for signature at Annecy (subsequently remaining open for further signatures at Lake Success) by Governments which have already subscribed or which simultaneously subscribe to the Agreement regarding most-favoured-nation treatment for Western Germany of 14th September, 1948.

[Subattachment 1]

annex 1

Statement by the Delegations of France, the United Kingdom, and the United States on Behalf of Their Military Governors Regarding the Tariff of the Western Zones of Germany

1(a). The Customs Law of 20 March 1939 and the Customs Tariff of 1939, as amended, are in force in the occupied areas of Western Germany insofar as they are not in conflict with Military Government laws, regulations or directives.

(b). The conventional rates, based on tariff agreements in force on 1 September 1939, are being applied to all countries in lieu of the statutory rates in all cases where such conventional rates existed. Seasonal restrictions to the application of such rates still apply but quantitative and qualitative restrictions are not being applied.

(c). It is intended that tariff rates and customs procedures will be applied uniformly throughout the areas of Western Germany, and the necessary steps towards this end are already being taken.

2. During the life of the Most-Favoured-Nation Treatment for Germany Agreement, the appropriate authorities in Western Germany undertake to consult with the signatories to the Agreement on any duties which the latter consider to involve hardship, with a view to granting reductions in cases where the duties in force prevent the normal operation of trade.

[Subattachment 2]

annex 2

Memorandum of Understanding Relative to Application to the Western Sectors of Berlin of the Agreement on Most-Favored-Nation Treatment for Areas of Western Germany Under Military Occupation³

1. The undersigned, representing Governments now signatory to the Agreement on Most-Favored-Nation Treatment for Areas of Western Germany under Military Occupation, signed September 14, 1948 (hereinafter referred to as “the Agreement”), agree, since the same policy considerations as apply to the extension of most-favored-nation treatment to the areas clearly covered by the Agreement also apply to the extension of such treatment to the sectors of Berlin under occupational control of France, the United Kingdom and the United States, that the provisions of the Agreement applicable to Western Germany shall from the signature hereof be construed as applicable in like manner to such sectors of Berlin.

2. This Memorandum shall be deposited with the Secretary General of the United Nations who shall transmit a certified copy thereof to each government specified in paragraph 2 of Article VI of the Agreement. This Memorandum shall be open for signature by each Government which has signed, or hereafter signs, the Agreement.

Done at Annecy, in a single copy, in the English and French languages, both texts authentic, this [13th] day of [August], 1949.

1. Not printed; sent to the Department as telegram 418, July 26.
2. This was reported in Frankfurt telegram 1854, August 18, 5 p. m. (repeated to Annecy as 15 and to Berlin as 139): “Military governors at meeting today noted without objection statement on tariff policy as formally read at July 26 [25] meeting at Annecy.” (560.AL/8–1849)
3. Signed at Annecy, August 13, 1949; for text, see TIAS No. 2047 or Department of State Publication No. 3797 (Washington: Government Printing Office, 1949).