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United States Department of State / Foreign relations of the United States diplomatic papers, 1934. Europe, Near East and Africa

Netherlands,   pp. 627-641 PDF (5.6 MB)

Page 630

a free hand in these matters, and the appointment of Mr. Steenberghe 9
to succeed Mr. Verschuur, reported in the Legation's despatch No. 43,
of June 26, 1934,10 indicated that this policy is to be carried out with-
out any limitations. Only if this policy proves to be a failure will
there be any likelihood of a general use of bargaining tariff.
  The new policy has already produced special trade agreements with
a dozen countries, including Italy, Portugal, Belgium, Switzerland,
South Africa, Chile, Argentine and Germany, and negotiations are
now being conducted with Great Britain. Quota restrictions have
been applied against imports on a non-discriminatory quota basis but
special reciprocal extension quotas are granted under the special agree-
mients. All this has been and is being carried out without regard to
most-favored-nation treaties. While the Legation has not received
an official statement to that effect, it is understood that the point of
view of the Netherlands Government is that when most-favored-nation
clauses were included in international treaties, no such situation as the
present one had been contemplated as a possibility, and that therefore
quota agreements do not violate such most-favored-nation clauses.
  Under the circumstances and in view of the fact pointed out in the
Department's instruction that the most-favored-nation treatment ac-
corded to the Netherlands by the United States and vice versa has
only been based on an understanding and not on an actual treaty,
it seems very doubtful if the Netherlands will consent to enter into the
treaty recently presented to its Minister in Washington. I have had
no official expression of opinion but understand that the treaty is being
studied at present in the Department of Economic Affairs, where
there seems to be considerable scepticism among the officials with
whom the Commercial Attache is in touch. It may be assumed that
our draft treaty, had it been submitted two years ago, would have been
acceptable, but as things stand today it is probably not so much to
their liking, particularly, of course, Article 3.
  I regret to note that in the last paragraph of the Department's
instruction there seems to be some doubt as to the negotiation of a
trade agreement with the Netherlands. Since the bill authorizing the
President to enter into reciprocal agreements has become law and
certain other rights have been given him through the National Re-
covery Act,11 it seems advisable that a special trade agreement should
be negotiated with Holland, particularly as they themselves are
anxious to have one. Dr. Colijn 12 recently said to me, "When you are
ready to negotiate, we will be."
'M. P. L. Steenberghe, Netherland Minister for Economic Affairs.
10 Not printed.
21 48 Stat. 195.
12 President of the Council of Ministers and Minister of the Colonies.

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