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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

Greece,   pp. 406-434 PDF (11.0 MB)

Page 413

every nation. Even today, notwithstanding the anarchy into which
international trade has fallen, the nations of the world are to be found
still clinging to the principle of equality in their international treaties,
a fact evidenced by the great number of most-favored-nation treaties
now in existence and by the frequency with which the most-favored-
nation clause is inserted in new treaties.
  Yet the recognition which this great and abiding principle today
receives is largely nominal and too often fails to reflect itself in prac-
tice. During the course of the depression there have come into use
many new devices for restricting and diverting trade, either directly
or through the control of the means of payment therefor, with the
result that in many countries which formerly based their commercial
policy on the most-favored-nation principle and which still employ
the most-favored-nation clause, equality of commercial opportunity
and treatment does not, in fact, exist. The claim has been advanced
by some that since the most-favored-nation clause was developed and
many of the existing most-favored-nation obligations were assumed
in a time when tariffs were practically the only restriction placed upon
trade, it can be considered as applicable in the main only to tariffs.
Without seeking here to discuss the historical or legal bases for this
view, the Government of the United States cannot help but feel that
such a construction, by in fact denying equality of treatment, denies
the fundamental purpose for which the most-favored-nation clause
was formulated.
  While the United States is fully aware of the difficulty of attempt-
ing under present conditions to establish for universal acceptance
rigid definitions of the treatment which, under the various types of
trade control other than customs duties, may properly be considered
as constituting equal, or most-favored-nation, treatment, the United
States is prepared, as a matter of policy, to accept the following
arrangements as a substantial equivalent of non-discriminatory treat-
ment in the application of the more important types of non-duty
trade controls:
  Quotas. With respect to quantitative restrictions on imports, an
allotment to United States trade of a share of the total quantity of
any article permitted to be imported equivalent to the proportion of
the total importation of the article which the United States supplied
during a previous representative period. By the term "representative
period" is meant a series of years during which trade in the particular
article under consideration was free from quantitative restrictions
and discriminations and was not affected by unusual circumstances.
  Exchange control. The United States Government believes that
any form of control of foreign exchange in connection with com-
mercial transactions should be administered in such a way as not to
impair the operation of the principles of most-favored-nation treat-
ment and quota allocation set forth above.

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