Extract From Bulletin No. 246, March 20, 1950
Commercial Treaty Program Reviewed
[Here follows general commentary.]
Further Delay in Benelux Negotiations The commencement of negotiations with the Benelux countries has been subject to further delay. Hitherto the Netherlands maintained a favorable disposition toward the treaty, and expressed readiness to enter into negotiations as soon as its Benelux partners were prepared. Belgium has ascribed its own failure to complete preparations to the absorption of a relatively small Foreign Office staff in more pressing matters, rather than to substantive objections to the treaty. Recently, however, the Dutch have indicated that they are not now in a position to enter into negotiations. It appears that serious differences of opinion among various agencies of that government as to substantive features of the draft have emerged; also, the Netherlands has seemed inclined to delay negotiations until after the US has concluded similar treaties with other important commercial or industrial countries, possibly because of doubts that the US intends to push the treaty program. Recently, however, the ECA Mission at The Hague, together with the Embassy, impressed upon the Netherlands Foreign Office the relationship between the treaty and the long-range economic objectives of the European Recovery Program. The Foreign Office indicated that it would endeavor to have the differences within the Netherlands government as to the treaty resolved in order that the negotiations might be expedited.
Additional European Negotiations In addition to the negotiations with Ireland, which culminated in signature of a treaty January 21, 1950, and the negotiations with France2 and the Benelux, as mentioned above, commercial treaty projects with several other European countries are under way. The UK has indicated that it is now studying the draft treaty which we submitted last month, and while the British are anxious to conclude such a treaty with us, they probably can not enter into active negotiations before the end of 1950 because of the press of other matters. In response to an informal approach which [Page 685] we made last May, the Spanish government has now indicated that it is interested in undertaking treaty negotiations and is preparing a counter proposal to our basic draft. Denmark is studying a draft treaty which we presented in January, and the Foreign Office is understood to be interested in beginning negotiations quite soon. A draft treaty was presented to the Portuguese government this month. Recently the Swedish Embassy expressed interest in a commercial treaty but suggested that negotiations be preceded by a formal exchange of notes stating the intention of the two governments to negotiate such a treaty. It appears, however, that Sweden has been more interested in the exchange of notes than in the treaty, attaching political importance to the proposed notes, particularly as a means of counteracting domestic anxiety over Sweden’s growing isolation from the west. Accordingly, commitments as to the exchange of notes have been avoided, but a draft treaty has been prepared for purposes of technical study by Sweden with a view to eventual negotiation. Greece is believed to be favorably disposed toward the US basic draft but is concerned about extending the substantial establishment rights provided for in the treaty to other countries, particularly Italy, under existing most-favored-nation commitments. The Italian government recently expressed a desire to accelerate the flow of private US capital to Italy and proposed the negotiation of an agreement designed to broaden the guarantees for US investments in Italy, particularly with regard to the withdrawal of earnings. A draft of an agreement supplementing the commercial treaty of 1948 and containing the more significant developments in standard treaty provisions that have been developed over the past two years is now under consideration as a basis for possible negotiations with Italy.
Latin American Interest Since signature of the Uruguayan treaty in November 1949, drafts have been prepared for negotiation with Argentina and Ecuador, preliminary meetings have been held with Brazil and Colombia, and an informal approach regarding possible negotiations has been made to Paraguay. A standard draft treaty given the Chileans some months ago is understood to be currently under study by that government. A number of Chilean officials, however, continue to hold certain misconceptions regarding the nature and objectives of the draft. In an effort to clear this up, we have submitted a memorandum designed to remove the basis for these misconceptions.
Negotiations with Other Countries The new Australian Minister for External Affairs recently expressed interest in resuming the treaty negotiations which were suspended in September 1948 and welcomed our suggestion that a revised draft be substituted for the draft presented in early 1947. It is believed that the Philippine government may also be interested in resuming treaty negotiations on the basis of an [Page 686] up-to-date standard draft. Recently there have been indications of greater Egyptian interest in the draft which that country now has under study, apparently because of its possible relation to Point Four legislation; and there now appears to be greater likelihood that the Egyptian government may be persuaded to enter into negotiations on the basis of the draft commercial treaty rather than the Egyptian draft establishment convention. A copy of the standard draft made available on an informal basis to an officer of the Israeli Embassy is believed to be under study by that government, although it has not indicated its attitude toward undertaking a formal treaty project. Since Israel appears to be developing a relatively favorable attitude toward foreign investment, however, it may be possible to place the project on a formal basis. Signature of the treaty with Lebanon, which is before the Lebanese Cabinet for study and final approval, is expected in the near future. In view of unsettled political conditions in Syria, no further action has been taken with respect to the Syrian treaty project.
- Master set of the Department of State classified internal publication Current Economic Developments for the years 1945–1969, as maintained in the Bureau of Economic Affairs and antecedent offices.↩
- Not printed, but see paragraph entitled “Negotiation with France” in the memorandum prepared in the Bureau of Economic Affairs, March 10, 1950, entitled “Present Status of Program for Negotiating Treaties of Friendship, Commerce and Navigation,” supra.↩