611.9131/40
The Assistant Secretary of State ( Sayre ) to the Persian Minister ( Djalal )
My Dear Mr. Djalal: Your letter of November 20, 1934, regarding a memorandum you have received from the Persian Department of Commerce concerning the trade between Persia and the United States, has been received and carefully noted. Some time prior to the receipt of your letter the American Minister at Teheran had been instructed by telegraph to outline to the appropriate authorities of your Government the views of this Government with respect to the possibility of a reciprocal trade agreement. Accordingly it would appear to be unnecessary for us to enter into any detailed discussion of the matter at this time.
I may say, however, that the Department of State concurs in the opinion expressed by the Persian Department of Commerce that the export of carpets from Persia to the United States and the shipment of American automobiles, parts, et cetera, to Persia, taken together, form such a preponderant part of the trade between the two countries as to justify the two Governments in endeavoring to negotiate a reciprocal trade agreement. I must be frank in stating, however, that our information regarding the present treatment of this trade differs very materially from that expressed in your letter under acknowledgment.
In this connection your Government must of course be aware of the requirement that importers of automobiles into Persia, in order [Page 888] to receive the import permit necessary under the Trade Monopoly Act, must purchase export certificates at a price of 13.5 percent of their nominal amount, which amount moreover must be 117.7 percent of the nominal value of the import permit (since the latter is issued against only 85 percent of the export certificate), and of the further requirement that 20 percent of the exchange needed to pay for importation of automobiles must be purchased from the National Bank at a rate which has varied from over 50 percent to almost 100 percent higher than the market rate. In addition, our attention has been called to the system employed by the Persian customs authorities in appraising imports of certain automotive products. Without going into details, it will suffice to mention that the method of appraisal appears to create unnecessary difficulties in the importation of such products into Persia. These facts hardly bear out the statements in your letter regarding the “facilities made in favor of American automobiles,” et cetera.
While I should also have to qualify certain statements in your letter with reference to the importation of Persian rugs into the United States, I am of the opinion that this Government will find it possible to make a concession respecting Persian rugs calculated to be of real value, especially when the market for such rugs revives following an improvement in building activity in this country. In return it would be necessary for Persia to make suitable concessions respecting the importation of the products of the American automotive and tire industries, since, as you doubtless are aware, concessions to the trade of other countries under the Trade Agreements Act of June 1934 can be made by the United States only in exchange for reciprocal concessions.
I am hopeful that the reply which we are awaiting from your Government through our Legation at Teheran will be of such a nature as to permit the negotiation of an agreement designed to restore and further develop the trade between our two countries to their mutual advantage.
Sincerely yours,