Foreign Relations of the United States Diplomatic Papers, 1940, The British Commonwealth, The Soviet Union, The Near East and Africa, Volume III

611.9131/124

Memorandum of Conversation, by Mr. Leander B. Lovell of the Division of Commercial Treaties and Agreements

[Washington,] August 24, 1940.

Participants:	The Iranian Minister, Mr. Schayesteh
	Mr. Deimel
	Mr. Merriam
	Mr. Lovell

The Iranian Minister said that he had received instructions from his Government concerning the possibility of trade agreement negotiations between the two countries; but owing to the fact that an earlier communication from his Government on the same subject had not as yet reached him, he was not altogether clear as to the status of the conversations.

Mr. Deimel indicated that there had been intermittent discussions over the past several years concerning the possibility of negotiating a trade agreement between the United States and Iran and that when these conversations were resumed in the latter part of 1937 and early in 1938, the Department had transmitted to the American Legation in Tehran an outline of our understanding of the nature of the proposed negotiations. Mr. Deimel read pertinent parts of the telegrams, to which he had reference, and said that this Government’s position had been given in a note from the Legation in Tehran to the Iranian foreign office on March 28, 1938. He understood from a recent telegram (dated August 2, 1940) from the Legation that the Iranian Foreign Minister had replied accepting the position that any such negotiations should be based on the principle of reciprocal most-favored-nation treatment in respect of all forms of trade control but adding a qualification referring to the contents of certain compensation agreements to which Iran is a party.

The Minister said that these agreements were of a very special nature, providing for the purchases of certain commodities by each country and establishing prices and the means of payment for such purchases. He had thought before he came in that he would ask for a memorandum giving the American proposals but he now felt that this was unnecessary since he understood them well enough. There were some other things in which he was interested, however. The instructions from his Government had referred to the trade agreement between the United States and Turkey and he wished to have copies of that as well as of the provisional commercial agreement of May 11 [14], 1928 between his country and the United States.⁸¹ He wished also to be told about the general provisions which we employed in trade-agreement negotiations.

Mr. Deimel replied that he would be glad to furnish the Minister with sets of the general provisions and also copies of the agreements mentioned. He pointed out that the standard general provisions, of which two copies were provided the Minister, were what this Government started with in trade agreement negotiations and that in each case the provisions were modified somewhat to suit the particular situation as the Minister could see from looking over some of the trade agreements concluded. Mr. Deimel briefly outlined the procedure followed here in trade agreement negotiations, referring to the public announcement of intention to negotiate and the all-inclusive list published with it and the period of at least five or six weeks after the announcement before the formal negotiations could begin. It was pointed out that in the nature of the procedure this Government was not in a position to make a commitment on any trade concession to the other country until after the hearings which are referred to in the public announcement. In this connection Mr. Deimel indicated the Minister might wish to give some thought to the products on which his country might like to have concessions, bearing in mind the fact that the United States follows in general the principle of limiting concessions to the other country to products of which that country is a major supplier.

The Minister was grateful for the discussion of the procedure and requested copies of the public announcement made in the case of Turkey⁸² as well as copies of some publication which would contain a comparison of the rates of duty finally included in the Turkish agreement with those in effect prior to the agreement. In response to his request the Minister was furnished copies of the analysis of the trade agreement with Turkey as well as of the announcement. The Minister indicated he would send to the Department the pertinent parts of the most recent instruction from his Government.

81. See exchange of notes, May 14, 1928, Foreign Relations, 1928, vol. iii, pp. 724–729.
82. Department of State, Press Releases, January 15, 1938, p. 108.