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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

Liberia,   pp. 785-857 PDF (27.0 MB)

Page 799

reciprocal trade that have been made or may in future be made with
any further state; and treaties to facilitate the payment of foreign
   The Department cannot agree to such sweeping exceptions to the
scope of the most-favored-nation clause. Indeed, it is a cardinal
principle of the present commercial policy of the Government to
extend to all countries which do not discriminate against it, the con-
cessions and duties and other import restrictions made in trade agree-
  The Department wishes to emphasize the fundamental importance
of the most-favored-nation principle as an effective instrument for
the reduction of barriers to trade. The Liberian Government is no
doubt fully aware of the disastrous consequences which have resulted
from the growth of trade barriers since 1929. The continued existence
of severe restrictions on trade and particularly the existence of dis-
criminations still gravely retards economic - recovery. The conse-
quences of these restrictions and discriminations are serious for the
trade of all countries and especially so for small nations which are
still striving to recover from the financial difficulties which developed
during the depression.
  This Government is now engaged in a program of reduction of
trade barriers through trade agreements and commercial treaties.
These instruments are broadly of two types:
  1. Under the trade agreements, concessions relating to tariff duties
and other restrictions upon specified products are made by both parties
to each agreement. These concessions are accompanied by an under-
taking by each party to give unconditional most-favored-nation treat-
ment to the trade of the other. It follows that if either party -to the
agreement should make any concessions to a third country, such con-
cessions would also be extended to the other party. Fifteen agreements
have already been made on this basis.
  2. The second type of agreement contains mutual pledges of uncon-
ditional most-favored-nation treatment without concessions relating
to particular commodities. -Through commercial treaties and agree-
ments of this type the United States guarantees to the other country
that concessions made by the United States to third countries in
agreements of the first type will be extended to the other party. An
exception is made by the United States only in the case of concessions
to Cuba. In return, the United States receives similar assurance
with regard to agreements which the other party may make with
third countries, sometimes with minor exceptions.
  It is for this reason that the United States has proposed the
inclusion of the unconditional most-favored-nation clause in the pro-
posed treaty with Liberia. Clearly the exceptions proposed by the
Liberian Government are of so sweeping a nature that they would
render the clause largely ineffective in its application to the trade
between the two countries.

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