611.60F31/58
Memorandum by the Chief of the Trade Agreements Section (Grady)
Mr. Kabeláč4 called to say that his Legation was disturbed at the statements in the paper regarding a “blacklisting” of countries discriminating against the United States.
I stated that the term “blacklisting” was an unfortunate one, and one for which the Department of State was in no sense responsible. I indicated that a special committee has been giving careful study for a number of weeks to discriminations against our trade by a number of countries, and it was our thought to withhold generalizations of rate reductions to countries who were flagrantly discriminating against American commerce.
I pointed out, however, that the withholding of these generalizations would be contingent on the countries in question continuing to withhold from us most-favored-nation treatment. The amendment to the Tariff Act of 19345 makes most-favored-nation treatment by this country positive, as the result of the lowering of rates in our various agreements would mean the possible evolution of a two-schedule tariff. The withholding of generalizations from the country would not in any sense be a blacklisting of that country but the equivalent of withholding most-favored-nation treatment. This can be rectified in the case of any country not now giving us most-favored-nation treatment by it agreeing to do so pending the working out of a trade agreement through a modus vivendi.
Mr. Kabeláč asked if we could indicate to him what we would expect of Czechoslovakia in the way of changing present treatment of American commerce that would enable them to secure most-favored-nation treatment from us. I said that we could give him such indications when the committee and the Secretary have reached a decision on the matter which, I hoped, would be a matter of not more than a week or so.