Memorandum from the French Embassy.
Washington, March 26, 1907.
Under date of August 23, 1905, the French Embassy had the honor to inform the State Department of the provisions of the French tariff laws which do not permit the French Government to continue to grant the benefit of the minimum tariff to importations of coffee from Porto Rico.
The considerations set forth on this occasion by the United States Government and contained in the note of the State Department of September 8, 1905, were brought to the attention of the minister of commerce of the Republic, who has just made a new investigation of the situation arising with regard to coffee from Porto Rico, from the nonratification by the American Senate, within the periods specified, of the Franco-American convention of July 24, 1899, and of the additional arrangement of January 31, 1903, extending to Porto Rico the benefit of said convention.
In its aforesaid note the State Department explained that, upon agreeing to extend to the products of Porto Rico, by the convention of August 20, 1902, the advantages granted to North American products by the commercial convention of May 28, 1898, the French Government had in exchange secured for Algerian products, upon their importation into the United States, the benefits of the tariff reductions granted by the said convention to French products. Now, this exchange of concessions had been especially advantageous, according to the Federal Government, to French and Algerian commerce, notably with regard to their exportations of wines and tartars, and the State Department consequently considered the application of the French minimum tariff to Porto Rican coffees as a compensation calculated to establish the equilibrium between the concessions granted on both sides in 1902.
The Federal Government furthermore observed that, according to the agreement of May 28, 1898, which at present governs the commercial relations between France and the United States, the latter country now grants to France the tariff treatment of the most-favored nation, without receiving in return the same treatment when the case is otherwise with regard to third nations under identical conditions.
In reply to these observations my Government has instructed me to state to your excellency that these arguments do not appear such as to warrant the application of the French minimum tariff to Porto Rican coffees. In fact, at the time of the arrangement of August 20, [Page 290] 1892, it was understood that the extension of the benefits of the commercial convention of May 28, 1898, to Porto Rican products would constitute an offset to the advantages which the United States should grant to French commerce by extending the effects of this convention to Algerian products. This exchange of concessions appeared, at the time it was agreed upon, to be self-compensating, and every fresh concession added to the one we then granted would appear to secure to the United States an advantage for which we receive no compensation.
It is true that, on concluding the arrangement in question, the French Government at the same time agreed to admit Porto Rican products to the benefits of our lowest rates up to February 23, 1903. But it does not seem that this provision should be invoked to-day by the Federal Government in order to secure the permanent concession of the favor then granted to Porto Rican coffee. This favor was in fact granted only temporarily in order to enable Porto Rican coffees to enter France at the minimum tariff rates until the ratification of the convention of July 24, 1899, should have granted them these rates permanently.
The periods for which this favor was granted having now expired without any other act having intervened to grant the minimum tariff to Porto Rican coffees, it follows that by right the Federal Government has no grounds on which to demand the maintenance of the favoring rates which have hitherto been granted to its products.
On the other hand, my government can not admit the second argument invoked by the State Department, viz, that, since the United States grants to France the tariff treatment of the most-favored nation, American importers should, owing to this circumstance, derive a right in proper cases to enjoy the same rates in France.
It is beyond doubt, in reality, that the rates established in our general tariff are very moderate in comparison to the very high duties levied on most of our products upon entering the United States, and that the application of our minimum tariff to the articles contemplated in the convention of May 28, 1898, amply compensates the reductions in duties which have been granted to us by the United States. Moreover, if this argument were well founded, the United States would be entitled to demand the whole of our minimum tariff and not only our lowest rates on coffees. It is obvious that such a claim as this could not be admitted.
Being desirous of showing the broadest spirit of conciliation, while at the same time bound by the provisions of the law of February 20, 1903, regarding the tariff rates on colonial produce, the minister of commerce has decided not to subject Porto Rican coffees to the general tariff until on and after August 1, 1907, so that, in the interests of transactions concluded up to July 31 next, they Avill enjoy the provisional rates by which they have benefited since September 23, 1903.
The Government of the Republic would be disposed to utilize the interval until August 1 next in order to sound the Federal Government for the purpose of ascertaining whether it would be willing, in exchange for the minimum tariff applicable to Porto Rican coffees, to grant to French merchandise, both on this island and in the United States, the reduction provided by Section III of the American customs law of July 24, 1897, on champagnes and sparkling wines, which are not included in the agreement of May 28, 1898.