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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

Switzerland,   pp. 565-582 PDF (6.6 MB)

Page 569

States was established, as required by the note to item 95 in Part B of
Schedule I. The Department is fully aware of the statement in writ-
ing made by the Swiss Government at the time of signature of the
agreement that it would only be able to admit small quantities of lard.
This understanding in no way compromised the obligation assumed
by the Swiss to assign a definite annual quota to the United States,
divided into equal calendar quarter quotas. Furthermore, the Depart-
ment is entirely unable to agree with the interpretation of paragraph
2 of Article VII made by Dr. Stucki. Nothing in the paragraph
referred to supports the Swiss view that the assurance of fair and
equitable treatment with respect to quotas applies only to new quotas.
The words, "any article in which the other country is interested"
not qualified by an exception, either express or implied, in this para-
graph or elsewhere in the agreement, in regard to commodities the
importation of which was restricted at the time of signature or entry
into force of the agreement.
  The reply of the Swiss Government with respect to the tax on im-
ported lard was likewise unsatisfactory. Dr. Stucki's contention that
the tax did not constitute an import tax in the sense of Article I, but
rather a contribution by which the importer of lard might be relieved
of the obligation to make compensatory exports, is inconsistent with
the agreement in two respects. In the first place, whatever appellation
was given to the tax, it was levied only on imported lard and must
therefore be regarded as a charge imposed "on or in connection with
importation." Furthermore, it was not imposed or required to be
imposed by laws in force in Switzerland on the day of signature of the
agreement, and nothing contained in Article I warrants the substitu-
tion of a tax for requirements of an administrative nature which might
have been in effect at that time.
  Furthermore, the Department cannot agree with the view that the
requirement to make compensatory exports was to continue after the
importation of lard was authorized in accordance with the note to
item 95. Prior to the signature of the trade agreement the importation
of lard into Switzerland was entirely prohibited except in connection
with compensation transactions. It is obvious, therefore, that the
undertaking of the Swiss Government to "authorize the importation of
lard" from the United States involved a commitment to remove this
condition with respect to the quota to be assigned to the United States.
  Very truly yours,                    For the Secretary of State:
                                                FRANcIs B. SAYR}3
982609-54  37

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