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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

Yugoslavia,   pp. 584-595 ff. PDF (4.3 MB)

Page 593

import of automobiles from the United States would amount in the
year 1938 the same as in 1935, namely about 18 million dinars. The
same would apply to other controlled articles. These import permits
would be issued quarterly, without taking into consideration the trade
balance between Yugoslavia and the United States and will be allowed
even in the case of an adverse trade balance for Yugoslavia. The im-
port of the non-controlled articles, naturally, is free and is not subject
to compensation on this basis. The import of the controlled articles in
the aforementioned relation, and also all the other articles from the
United States, whose import in Yugoslavia is not subject to any con-
trol, would be paid in free foreign exchange. Finally, the compensa-
tions which today are required for the import of the controlled articles
from the United States would also be dispensed with.
  [Here follows table giving value of controlled articles imported
from the United States in 1935.]
        The Department of State to the Yugo8lav Legation
  The Government of the United States has given consideration to
the proposal presented by the Yugoslav Government on November 12,
1937, and is gratified to find that this proposal would involve sub-
stantially more favorable treatment to American trade in the con-
trolled articles than is now accorded by Yugoslavia. Should the
Yugoslav Government be prepared to accord to American trade in
all controlled articles the treatment indicated in its proposal with
some such modifications as are suggested below, the United States
Government would be prepared to continue the Treaty of Commerce,
and Friendship [Navigation] between the two countries in effect until
further notice, and hence, among other things, to continue to grant
most-favored-nation treatment to the trade of Yugoslavia.
  The United States would consider this arrangement to be of a tempo-
rary and transitory character for the reason that the imposition on
imports from the United States of restrictions which are not imposed
on imports from certain other countries, albeit the products involved
form only a small proportion of the total trade, cannot be considered
as being in harmony with the principle of most-favored-nation treat-
ment. The United States is ready to accept it only because it believes
that by such an arrangement the treatment accorded to American trade
can be made to approximate the treatment which would be accorded
under a more formal adherence to the most-favored-nation principle.
It hopes, however, that ultimately it may be possible for the Govern-

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