611.60F31/8–646: Telegram
The Acting Secretary of State to the Ambassador in Czechoslovakia (Steinhardt)
1104. ReEmb 1484, Aug. 6.63 Dept appreciates your judgment [Page 219] political value of interim commercial agreement but feels that such agreement would not stimulate trade with U.S. in view of fact Czech exports to U.S. already receive benefit most-favored-nation treatment and U.S. exports to Czecho handicapped by factors not likely be removed by any possible commercial agreement. In view talks here, proposed exchange notes accompanying loan will contain most mutually satisfactory undertakings on commercial policy possible at present.64 Dept believes clauses on commercial policy included in proposed exchange of notes with Czechs accompanying loan as much as Czechs will be willing undertake in any interim commercial agreement on exchange control and quantitative import controls. Moreover, note contains additional undertaking re commercial considerations in conduct of Govt enterprises.
Czechs unwilling agree to accord non-discriminatory treatment respecting exchange control and quantitative import controls (cf minutes meetings May 29, June 24, July 8, July 15, airgram A–1038 to London of July 23, repeated Prague, and instruction 873 Aug. 2165).
Since Czech customs duties seem likely continue for some time to be relatively unimportant means of import control, Dept feels mere mfn commitment on customs duties by Czech Govt would not be adequate quid pro quo for like reciprocal contractual undertaking by U.S. Consequently, it was agreed in discussions here to postpone [Page 220] further consideration of matters included in proposed interim commercial agreement pending multilateral discussions of proposed ITO charter.
[Here follows text and Department’s explanation of the revised wording of certain paragraphs in the proposed exchange of notes to accompany the Export-Import Bank loan to Czechoslovakia. The revisions were those agreed upon by Czechoslovak and American negotiators at a meeting on September 4.]
- Not printed; in it Ambassador Steinhardt asked whether the Department wished to consider the advisability of an interim commercial agreement which, the Ambassador believed, would result in a favorable reaction in Czechoslovakia and would serve to stimulate trade with the United States (611.60F31/8–646).↩
- During October 1946, United States and Czechoslovak officials agreed that all references to a loan be removed from the draft exchange of notes covering commercial policy and compensation. The notes were exchanged on November 14, 1946; see bracketed note, p. 236.↩
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At a meeting with Czechoslovak representatives on May 29 on the question of an interim commercial agreement between the United States and Czechoslovakia, Department officers explained their desire to begin discussions on the basis of the draft interim commercial agreement proposed by the United States on June 29, 1945 (see Foreign Relations, 1945, vol. iv, p. 543) and the inability of the United States to accept the Czechoslovak counterproposal of April 27, 1946 (see telegram 670, May 1, from Praha, p. 191). At a meeting with the Department officers on June 24, Czechoslovak representatives explained the unreadiness of their Government to negotiate a full commercial treaty and presented the text of an interim commercial agreement based largely upon the United States proposal of June 1945 (611.60F31/6–2446). On July 8, the Department proposed to the Czechoslovak negotiators that the notes to be exchanged between the United States and Czechoslovakia in connection with the contemplated Export-Import Bank loan should be extended to cover significant points of an interim commercial arrangement between the two Governments (860F.51/7–846). A draft of such an exchange of notes was presented to the Czechoslovak representatives on July 15 (860F.51/7–1546). This draft was discussed at subsequent meetings with the Czechoslovak representatives on August 13, August 23, and September 4 (860F.51/8–1346, 8–2346, and 9–446). The draft notes of July 15 and the revised draft of September 4 are not printed. The notes, from which all references to a loan had been removed, were signed and exchanged in Washington on November 14, 1946, as an agreement between the United States and Czechoslovakia regarding commercial policy and compensation. See bracketed note, p. 236.
Instruction 873, August 21, to Praha, transmitted a copy of a memorandum on the attitude of the Czechoslovak Government toward American proposals for the expansion of world trade (560.AL/8–2146).
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