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United States Department of State / Foreign relations of the United States diplomatic papers, 1937. The British Commonwealth, Europe, Near East and Africa
(1937)

Italy,   pp. 435-506 PDF (27.1 MB)


Page 440


FOREIGN RELATIONS, 1937, VOLUME II
                           [Enclosure 21
Memorandum on the Proposed Treaty of Friendship, Commerce and
         Navigation Between the United States and Italy
4 COMPARATIVE ANALYSIS OF THE ITALIAN COUNTER PROPOSALS OF
  DECEMBER 15, 1936 IN RESPECT OF ARTICLE VIII AND EXPLANATION
  OF A PROJECTED SECOND PROPOSAL BY THIs GOVERNMENT
  The important broad differences between the Italian proposal and
our original draft of Article VIII are in the provisions relating to
quantitative restrictions and foreign exchange (Italian Par. (d)-
U. S. Par. 3).
  Under the terms of our original draft, neither country could estab-
lish or maintain any import prohibition or restriction in respect of
any article unless it admitted from the other country a proportion of
the total quantity of such article permitted to be imported from all
sources equivalent to the proportion supplied by the other country
during a previous representative period. That is to say, Italy would
be required to admit the restricted goods from the United States on
the basis of the proportionate share formula, and vice versa.
  The Italian proposal differs sharply from the foregoing in that it
does not require that an allotment based on the proportionate share
formula or any other formula be accorded to the United States in
respect of imports subjected to quantitative restrictions. It provides
in effect that in case the Italian Government chooses to establish the
restriction upon the basis of a share of the total importation for a
fixed period of time either a proportionate share shall be accorded
to the United States-albeit the Italian Government having within
its discretion the choice of the base period-or the two Parties shall
come to an agreement with respect to the quantity of goods to be
admitted.
  The Italian proposal also omits reference to customs quotas and
licensing restrictions and relates to exports as well as imports. Other
less fundamental differences with respect to quantitative restrictions
gre analyzed elsewhere in this memorandum.
  As regards exchange, our original draft requires that exchange
control shall be administered in such manner as to insure fair and
equitable treatment in the allotment of exchange, and provides that
the Party administering the control shall be guided by the principle
that the share of total funds made available for settlement of commer-
cial transactions which is allotted to the other Party shall not be less
than the share employed for the settlement of commercial obligations
to the nationals of such other Party during a representative period
prior to the establishment of exchange control.
440


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