611.6531/102
The Department of State to the Italian Embassy
Aide-Mémoire
(1) The communication presented by the Italian Ambassador in regard to the prospective trade negotiations between Italy and the United States10 has been given careful consideration. It is hoped that this preliminary exchange of views will clarify and ultimately facilitate the negotiation rather than impede it.
This Government wishes to assure the Italian Government that it understands the difficulties with which Italy is now confronted in its international trade relations. In the development of the trade agreements program in which it is now engaged, the Government of the United States is seeking to follow policies which will result in a lessening of such difficulties for all countries concerned, for unfortunately the problems and the pressures such as have been emphasized by the Italian Government seem common and widespread among the nations of the world.
(2) It is the belief of this Government that only as world trade is permitted to increase along natural economic lines, shaped by the differences between climates, natural resources and national aptitudes [Page 594] of the various countries of the world, and only as the volume of world interchange actually increases, can such difficulties be permanently met. In proposing the negotiations with Italy for a mutually profitable trade agreement, the underlying purpose which moves this Government, and which it trusts similarly animates the Italian Government, is that the volume of trade in both directions between the two countries should be increased. It is hoped that this can be achieved by each of the two Governments abstaining from reducing further the trade opportunities they may accord each other, and by developing as a result of trade negotiations new commercial opportunities of a mutually advantageous character. That this process of creating new and additional trade through mutual concessions is the only way that ultimately can serve to bring about general improvement seems to the American Government a fact established by recent experience and not merely an inapplicable theory; and this would be the leading consideration that would guide the American negotiators in any trade discussions that may be undertaken between the two Governments.
This Government appreciates that the present international trade balance situation of Italy appears to be a decidedly unfavorable one, and that it is natural, therefore, that Italy must to some extent shape its policies to meet the immediate condition with which it is confronted and seek concessions which will enable it gradually to improve its balance of trade. On the other hand, the United States must make it clear that in its judgment any policy of strict bilateral balancing of trade relations between two countries in so far as it interferes with the natural course of trade, can only serve when translated into actual practice to diminish the normal scope and unquestioned benefits of international trade. The widespread practice of such a policy compels countries to purchase in other than the markets to which they would naturally resort, thus effectively suppressing triangular trade upon which rests the purchasing power that nourishes the whole circle of world trade. The inevitable effect is increased costs of commodities and lowered standards of living. In the opinion of the American Government, agreements worked out in accordance with the idea of effecting a bilateral trade balance have customarily not developed new trade; actual experience seems to show that they have at best kept alive under insecure circumstances a reduced measure of old trade. In view of this fact the United States in entering into negotiations for a mutually profitable trade agreement with the Italian Government, while giving the most sympathetic consideration to the views expressed by the Italian Government, assumes that both Governments have as their object the development of trade in both directions, with the expectation that the new opportunities given to the Italian export trade would be such as to assist Italy in meeting the difficulties with which it is confronted.
[Page 595](3) It may also be observed that such efforts as have been made to attain a bilateral equilibrium in trade relationships have frequently been open to the criticism of overlooking or minimizing the importance of international transactions other than goods movements,—for example, tourist expenditures, shipping earnings, immigrant remittances, pension payments, and the like.
(4) The United States will be happy to proceed with a preliminary exchange of views regarding the terms of a possible commercial agreement on the understanding that neither of the two Governments is committed to any limitation in the objects sought in negotiation by the statements of views that have been exchanged, and that neither of these statements is in any sense a “reservation”.
(5) To the suggestion of this Government that up until the conclusion of the negotiations the Italian Government abstain from further restrictions upon the importation of American goods, the reply of the Italian Government is read with regret. The inauguration of new restrictions during the period of negotiation is apt to create new currents of prejudice and thus to make a favorable outcome of the negotiations far more difficult, if not impossible. Nevertheless, if the Italian Government can not see its way clear to accept the request put forward, the Government of the United States is prepared to open negotiations upon the Italian Government’s giving it the assurance that during the course of the negotiations no restrictive action under any circumstances will be taken by the Italian Government which will create new discriminations against American trade as compared with the trade of other countries. If the Italian Government should find it necessary during the course of the negotiations to adopt new restrictive measures, this Government trusts that the Italian Government, as indicated in its communication, will be willing to limit its restrictive action to measures necessitated by an emergency situation.
(6) This Government will await the further reply of the Italian Government before making any public statement on the subject.