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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

Italy,   pp. 435-506 PDF (27.1 MB)

Page 445

in the Article. Of course, the Article would afford Italian exporters
exactly the same safeguards in the United States, should by any chance
restrictions be imposed here. Currently, of course, we have no ex-
change restrictions whatsoever on the transfer of normal commercial
  This Government has given very careful consideration to the ques-
tion of an exchange provision which will assure effective operation
of the other provisions of Article 8 relating to treatment with respect
to tariff matters and quotas. It has concluded that probably the pro-
visions of our exchange proposal are the only solution. The provisions
of sub-paragraph (a) preclude the imposition of prohibitions or re-
strictions on the transfer of payments for imports and thus assure
that all permitted imports will be paid for. But at the same time
these provisions in no way prevent the state from taking such action
as may be deemed necessary, under certain circumstances, to protect
its currency by limiting the amount of its total imports in accordance
with the provisions of the Article relating to quantitative restrictions
and thus limiting the amount of exchange which would be necessary
to pay for permitted imports.
  Under the Italian proposal, the only advantage that would be
guaranteed would be that prohibitions or restrictions on transfers of
payments for commercial transactions would not be imposed against
American goods unless they were also imposed against the goods of
other countries. But this would in no way protect us from a total pro-
hibition of transfers to us or from discrimination against us in the
allocation of whatever exchange may be granted by the control
  Considering the foregoing, we hope the Italian Government, in the
same cooperative spirit which has prevailed throughout the nego-
tiations, will give further careful consideration of our exchange pro-
posal of May 1, 1937. If after such reconsideration the Italians still
find the language of our proposal unacceptable, this Government would
appreciate receiving a counter proposal from the Italian Government
which would have the effect of assuring that American exporters can
receive prompt payment in foreign exchange for permitted importa-
tions of their goods into Italy.
  For your information, should the Italians fail to present an ex-
change provision which is satisfactory to this Government, we are
considering the advisability of dropping Article 8 from the negotia-
tions and concentrating on the conclusion of a general treaty of
friendship, commerce and navigation which would contain no pro-
visions relating to subjects of that Article. The problems involved
in Article 8 might then be left for later negotiations.

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