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Department of State bulletin (Volume v. 22, Apr- Jun 1950) online

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prise in foreign countries. Treaties of friend-
ship, commerce, and navigation have always con-
tained provisions designed to provide assurances
to American nationals and business enterprises of
each country within the teritories of the other.
Some of these provisions are basically economic ;
.others concern the personal rights of the individ-
ual sojourning in a foreign country. All of these
provisions tend directly or indirectly to encourage
the free movement of persons, goods, and capital
on an international scale. All of them help to
furnish those essential elements, particularly pro-
tection and security for persons and property and
incentive for business enterprise, which constitute
a favorable climate for investment.

The treaty with Uruguay, in developing these
essential elements, gives increased emphasis to
certain provisions of special interest to investors
and gives particular attention to technical phases
of investment problems. It provides categori-
cally and in concrete detail (art. XV, par. 4) for
the introduction of capital by citizens of one
country into the territories of the other and tor
the withdrawal therefrom of earnings, of funds
for capital transfers and of other funds. Such
withdrawals, however, are subject to certain lim-
ited and carefully safeguarded restrictions during
times of exchange stringency. The treaty also
contains a provision (art. V, par. 4) which defines
rights to obtain the services of technical experts,
executive personnel, and other specialized em-
ployees in gi-eater detail than was done in the
treaty with Italy. This provision is designed to
encourage private enterprise to make its technical
resources available for purposes of economic de-
velopment. In addition, a substantial number of
improvements or refinements in the treatment of
technical problems have been made in the treaty
in the course of restating its standard provisions.
The statement of the rule on technical personnel
(art. V, par. 4) has been amplified, for example,
and the application of the standard of national
treatment to navigation matters (art. XVI) has
been stated in a more positive way. The extensive
restatement of the standard provisions has bene-
fited the treaty as a whole, both as to content and
language. In the process, the scope of reservations

812



to the general rules of the treaty has been nar-
rowed, and the language generally has been
tightened and further clarified.

In reflecting current interest in problems of
investment and economic development, the treaty
with Uruguay is in harmony with the broad ob-
jectives of the Point 4 Program. While the treaty
contains no provisions directly related to the tech-
nical assistance features of Point 4, it is a good
example of the kind of treaty which may promote
effectively the objectives of Point 4, for it contains
the kind of assurances as to the treatment of pri-
vate enterprise that are likely to create a climate
favorable for American investment in foreign
countries. It is also an example of the type of
agi-eement "relating to opportunities and security
for investment" the negotiation of which is pro-
vided for in article 12 of the charter for an Inter-
national Trade Organization.

In the case of Uruguay, of course, conditions
favorable to investments from abroad have long
existed, and the treaty serves rather to confirm
formally traditional Uruguayan policies compar- |
able to our own, under which both countries have
encouraged private enterprise and developed
prosperous economies. The treaty, however, is
something more than a formal declaration of
the general rules which govern economic rela-
tions between the two countries. It is designed
to promote the mutual benefit of the United
States and Uruguay, pointing out within &
broad framework practical ways in which pri-
vate Uruguayan and American resources of capi-
tal, skills, technology, and manpower can join in
the realization of yet higher standards of living.
This treaty is of real significance in other ways
as well. As President Truman said in his recent
message to the President of Uruguay : "In this
treaty, we have reaffirmed and pledged mutual
principles and practices of basic importance to
closer economic collaboration and increased com-
mercial interchange in a free world." The treaty
further strengthens the cordial relations which
have long existed between the Governments and
peoples of the United States and Uruguay and
holds out to the world a practical example of how
like-minded countries may act for their own and
for the general good.

Treaty of Friendship, Commerce
and Navigation With Ireland

The treaty of friendship, commerce, and navi-
gation with Ireland, which is now before you, is
the fourtli such comprehensive treaty to be nego-
tiated by the United States since the war, pursuant
to the State Department's program for expanding
and modernizing this country s commercial treaty
network. It is also the first treaty of the sort
with any English-speaking country since the con-
ventions of commerce and navigation of 1815 and
1827 with Great Britain.

The treaty with Ireland is patterned after es-

Department of State Bulletin



sentially tlie same basic iicjiotiatinf; draft as that
from wliicli the treaty of friendship, commerce,
and economic development with Uniiruay was de-
rived, and is thus very similar to it in organiza-
tion, style, purpose, and content. Since the
Urufiuayan treaty has just now been di.scussed,
therefore, it would seem most convenient to sum-
marize the Irish treaty by describing nuijor points
of difference between the two.-



POINTS OF DIFFERENCE WITH URUGUAYAN TREATY

The first difference to be noted is the inclusion
in the Irish treaty of two articles not found in
that with Uruguay. One of these, a provision
traditionally carried in this type of treaty, pro-
vides that the citizens of each country be exempt
from compulsory service in the armed forces of the
other (art. III). However, in conformity with
established United States policy, it is further stip-
ulated that this exemption cannot be claimed when
both countries are allied or associated in the same
war. To all intents and purposes, article III of
the Irish treaty is identical with article XIII of
the treaty of friendship, commerce, and naviga-
tion with Italy, which came into force on July 26
of last year.

The other new article provides for the enforce-
ability of commercial arbitration contracts be-
tween the businessmen of the two countries and
for the execution of lawful awards rendered pur-
suant to such contracts, regardless of the place
where the arbitration proceedings take place and
of the nationality of the arbitrators (art. X).
This provision is consistent with title 9 of the
United States Code and is calculated to forward
its objective of facilitating settlement of disputes
over business contracts without resort to litiga-
tion. This provision is also adjusted to the vary-
ing commercial arbitration law of the several
States and leaves room for future legislative ex-
perimentation in the ai-bitration field. Although
the treaty of friendship, commerce, and naviga-
tion with China, signed November 4, 1946, con-
tains a commercial arbitration provision adapted
to special Chinese problems, the Irish treaty is the
first to carry such a provision in a generally appli-
cable form.

The second group of notable differences between
the Irish and Uruguayan treaties arises from dif-
ferences in the history and economic circumstances
of the two countries. The primary adjustment
to Irish conditions is a reservation for the Irish
Control of Manufactures Act of 1932, as amended
in 1934 (art. VI, par. 4). This act, in brief, pro-
vides that factories cannot be established in Ire-
land under alien ownership except with the express
consent of the Irish Government. The same rule
applies with respect to alien acquisition of exist-

' For appendix of cross-reference table of the treaties
with Ireland and Uruguay, see Department of State press
release 457 of May 4, 1950.



ing Irish-owned factories. In administering this
legislation, the Irish Government has indicated
that it intends to follow a policy of according
favorable consideration to American investors
wishing to initiate enterprises in line with Irish
industrialization ambitions.

The Irish deemed it necessary also to maintain
their special stamj) tax on transfers of real estate
to aliens (art. IX, par. 1(b), last phrase, with
which compare jirotocol, par. 7, of Uruguayan
treaty). In addition to producing a certain
amount of revenue for the public treasury, this
tax is designed to discourage an excessive volume
of alien purchases of Irish property and to exer-
cise a restraining influence on further increases in
already inflated property values.

Thirdly, it was of course necessary that adjust-
ments be made to take account of Ireland's con-
nection with the British Commonwealth trading
and monetary area, especially the United King-
dom which is the established outlet for the pre-
ponderant share of Ireland's primary agricultural
exports. The reservation formulated to fit Irish
needs (art. XX, par. 3 (b)) is the counterpart
of the reservations the United States retains as to
Cuba, the Philippines, the Canal Zone, and our
territories and possessions, and Uruguay as to
Bolivia and Paraguay. It may be noted that this
Commonwealth preference reservation is limited
to the interchange of goods. Moreover, Ireland
undertakes not to increase existing Commonwealth
trade differentials so long as the United States
may be bounded by the General Agreement on
Tariffs and Trade (or the projected Ito charter)
not to increase existing Cuban and Philippine
preferences.

Remaining differences are of a miscellaneous
character, the most notable one being perhaps a
revised rule on personal property. In the past,
the general rule on personalty carried in United
States treaties has been that of the most-favored-
nation. However, inasmuch as this means non-
discrimination as compared merely with other
foreigners and does not assure treatment equal
to that accorded nationals in the country, it is no
longer altogether adequate in view of the impor-
tant role that ownership of shares of stock, for
example, has come to play in modern economic
affairs. Article VII, paragraph 2, of the Irish
treaty represents the result of the Department's
effort to develop a stronger and more satisfactory
rule : namely, national treatment, subject to neces-
sary qualifications.

Adjustments for balance-of-payments difficul-
ties, which can be expected to constitute a normal
feature of treaties of this type during the present
era of disordered international finances, are found
in paragraph 8 of the protocol. The differences
between this and the comparable adjustments
found in the Uruguayan treaty reflect adaptations
to the particulars of Ii-eland's financial position.
The principle involved is the same in both treaties.



May 22, 1950



813



The protocol of the Irish treaty also contains
other variances of secondary import, growing out
of the circumstances of the negotiation. The
Minutes of Interpretation, identified with but not
part of the treaty, afforded a convenient medium
for recording the rules of interpretation applicable
to certain terms and passages of the treaty, as
desired by one or the other country. These ma-
terials, being merely statements of what the treaty
fairly construed is intended to mean, are not of
such a nature as to require incorporation in the
text of the treaty or protocol.

In concluding my summary, Mr. Chairman, I
think it would be fitting to quote from the state-
ment issued by Sean McBride, Ireland's distin-
guished Minister for External Relations, at the
time the treaty was signed :

The Government warmly welcomes the conclusion of
this treaty. The U.S.A. and its people hold a very special
place in the mind and heart of the Irish nation. The
exceptionally close relations between the two countries
have already rested and in the final analysis must always
rest on those solid foundations of sentiment and mutual
respect which are the best guarantee of friendship between
states. This treaty, however, supplements the basis of
our friendship in providing a juridical framework for the
maintenance and further development of intercourse be-
tween the two nations. The Government earnestly hopes
that the conclusion of the treaty will furnish the Irish
business community with an incentive to make every
effort to expand the country's dollar-earning capacity,
whether by the export of goods or the sale of services like
tourism so that in the years ahead we may be able to pay
for those goods and services we need from the U.S.A.
If our resources are to be used to the best advantage.

I can only add that the State Department also
warmly welcomes this treaty and trusts that it will
serve to encourage American businessmen likewise
to increase their commercial and investment in-
terests in Ireland.



PUBLICATIONS



Recent Releases

For sale hy the Superintendent of Docnments, Oovernment
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direct to the Superintendent of Documents, except in the
case of free publications, which may he obtained from the
Department of State.

Germany 1947-1949: The Story in Documents. European
and British Commonwealth Series 9. Pub. 3556. 631
pp. $3.25 per copy.

Story of American policy toward Germany and perti-
nent developments in Germany. The documents are
presented in comprehensive, topical arrangements.

Health and Sanitation: Cooperative Program in Bolivia.

Treaties and Other International Acts Series 1U99. I'ub.
3729. 3 pp. 50.

Agreement between the United States and Bolivia,
modifying and extending agreement of July 15 and
16, 1942, as modified and extended — Effected by ex-



change of notes, signed at La Paz July 1 and 14, 1948 ;
entered into force July 14, 1918, operative retro-
actively from June 30, 1948.

United States Educational Foundation in Norway. Trea-
ties and Other International Acts Series 2000. Pub.
3740. 14 pp. 100.

Agreement and exchange of notes between the United
States and Norway — Signed at Oslo May 25, 1949 ;
entered Into force May 25, 1949.

Inter-American Highway. Treaties and Other Interna-
tional Acts Series 2001. Pub. 3741. 5 pp. 50.

Agreement between the United States and Guatemala,
.supplementing agreement of May 19, 1943 — Effected
by exchange of notes, signed at Guatemala May 18,
1948 ; entered into force May 18, 1948.

Parcel Post. Treaties and Other International Acts Series
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Agreement and detailed regulations between United
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and at Washington April 13, 1949 ; entered into force
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and with respect to Korea July 1, 1949.

The Department of State. Department and Foreign Serv-
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Pamphlet describing the organization and functions
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The General Agreement on Tariffs and Trade (Amended
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Includes such related documents as Final Act, Proto-
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Great Lakes-St. Lawrence Waterway Project. European
and British Commimwealth Series 13. Pub. 3767. 7 pp.
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Slessage of the President to Congress and text of the
agreement.

United States Policy Toward Asia. Par Eastern Series
33. Pub. 3817. 16 pp. [Bulletin Reprint] Free.

Address by Secretary Acheson made before the Com-
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General Agreement on Tariffs and Trade: Negotiations
Beginning September 1950 Under the Trade Agreement
Act of 1934 as amended and Extended. Commercial Policy
Series 126. Pub. 3S19. 92 pp. 25(i!.

Notice of United States intention to negotiate, list
of products to be considered, and notice of public
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Diplomatic List, April 1950. Pub. 3820. 155 pp. 30^ a
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U.S. Ambassadors' Report on Regional Conferences in
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Report of the first regional conference of U.S. Am-
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The Mutual Defense Assistance Program. General For-
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A Fact Sheet including pui-pose, program, policy
background of MDAP outlined.



814



Department of State Bulletin



Countries Accede to General Agreement on Tariffs and Trade



FINLAND

[Released to the press April SS}

United States tariff concessions initially ne-
gotiated by this Government with Finland at
Annocv, France, in 1949, will become efl'ective
May 25, 1950.

Finland today signed the Annecy Protocol of
Terms of Accession to the General Agreement on
Tariffs and Trade and has taken the other steps
necessary to become a contracting party to the
agreement. Under the provisions of the protocol,
the two Governments are obliged to make their
concessions eflfective 30 days after the above
actions have been taken.

Most of Finland's concessions involve a change
from specific duties to ad valorem rates. The
concessions will benefit a wide range of United
States exports, but probably the most extensive
coverage is found in the fruit, automotive, and
machinery groups. Cotton, lard, and tobacco are
important agricultural products appearing in the
schedule, while motion pictures, tires and tubes,
and office appliances are noteworthy industrial
items.

Among the most important concessions granted
by Finland were those on automobiles. An ad
valorem duty of 14 percent was obtained for pas-
senger cars of the types in which the United
States has chief interest and for motor trucks,
buses, automobile chassis, and most automotive
parts. Concessions were obtained on the two
most important items in the United States imple-
ment trade with Finland : plows and tractors, the
former being granted a rate of 10 percent, and the
latter 8 percent.

The United States agreed to reduce the duty
on gi-anite paving blocks and hewn, dressed,
pointed, pitched, lined or polished granite (from
30 to 20 percent); on certain cutlery; on birch
plywood (from 25 to 20 percent) ; on spools
(from 25 to 121/2 percent) ; doors (from 25 to
16% percent) ; Gruyere process cheese; beermat
board and other paperboard; greaseproof and
certain other papers; ski wax; and certain wood
pulp items.

The United States concessions will be put into
effect by Presidential proclamation in accordance



with the Trade Agreements Act of 1934 as
amended.

Upon the coming into force of the new tariff
rates provided for in the General Agreement on
Tariffs and Trade, the trade agreement between
the United States and Finland in 1936 will be
terminated.



DENMARK

[Released to the press May J]

Denmark, on April 28, 1950, signed the Annecy
Protocol of Terms of Accession to the General
Agreement on Tariffs and Trade and has taken
the other steps necessary to become a contracting
party to the Agreement. Under the provisions of
the protocol, the two Governments are obliged to
make their concessions effective 30 days after the
above actions have been taken, on May 28, 1950.

The United States concessions will be put into
effect by Presidential proclamation in accordance
with the Trade Agreements Act of 1934 as
amended.

The moderate general level of the Danish tariff
explains the predominance of duty-rate and duty-
free bindings among the concessions granted by
Denmark. These concessions w-ill benefit numer-
ous branches of American agriculture and in-
dustry, and the concessions resulting from
Denmark's negotiations with other countries
I^articipating in the Annecy conference will be of
assistance to many other American exporters in-
terested in the Danish market.

Denmark bound favorable duty rates on fresh
apples and pears ; raisins and prunes ; dried apri-
cots, apples, peaches, pears, and mixed fruit. As-
surance of continued duty-free treatment on
wheat, soya beans, and certain cornstarch was ob-
tained, and a low rate on rice was homid. The
duty on canned and dehydrated soups was cut by
50 percent. A duty-free binding was obtained on
raw cotton and linters and a moderate rate on leaf
tobacco was bound against increase. Continued
free entry was assured for red top and blue grass
seed, and favorable duty rates on pecans and on
apricot and peach kernels were bound. Reduc-



May 22, 1950



815



tions were obtained for certain soft drink extracts
and for salted salmon.

The specific Danish duty on larger passenger
cai's was removed, and these are now dutiable at
only 15 percent ad valorem. Favorable rates on
a range of automotive parts were boimd against
increase. Electric motors, generators, magnetos,
and certain other electric equipment for use on
automobiles were bound at 71/2 percent. Auto-
mobile engines were bound at 5 percent. Aircraft
used in international traffic were bound duty free,
and other aircraft at 7^/^ percent. Ad valorem
rates of 5 percent wei'e bound on refrigerating ma-
chines, graders, earth movers, road rollers, exca-
vators, concrete mixers, and other machines for
contractors' use except when combined with cer-
tain electrical components, in which case the rate
of 71/^ percent was bound. A favorable 5 percent
ad valorem duty was bound on typewriters, calcu-
lating and adding machines, cash registers, book-
keeping and accounting machines and certain other
items of office equipment, except those combined
with certain electrical components, on which a
71/2 percent duty was bound. Moderate duties on
lubricating oil and petrolatum were bound, and
free entry on paraffin was assured. The duty on
turpentine was removed and duty-free treatment
of rosin was bound. The duty was bound on tires
and tubes. A specific duty of about 2^ per foot
was established for motion pictures to replace the
previous ad valorem rate.

The United States agreed to reduce the duty
on rangefinders for photographic purposes from
45 percent ad valorem to 25 percent; the duty on
certain internal combustion engines from 35 to
171/2 percent, and that on certain other internal
combustion engines from 271/2 percent to I71/2 per-
cent. The duty on certain cutlery was reduced
from IQ^ each plus 35 percent to 80 each plus 17I/2
percent, and that on sterling silver tableware and
certain manufactures of silver from 321/2 to 25
percent.

The duty reduction on butter to 7(f per pound
was limited in application to imports from all
sources not to exceed 5 million pounds between
April 1 and July 15 of any year and not in excess
of a like amount between July 16 and October 31 of
any year. Imi>orts in excess of these quantities
remain dutiable at the full rate of 140 per pound.
The duty on Emmenthaler type cheese was bound
at 50 per pound with an alternative 20 percent min-
imum rate ; that on blue-mold cheese was reduced
from 50 per pound with an alternative 25 percent
minimum rate to 30 per pound with an alternative
15 percent minimum rate. The duty on orchard
grass seed was reduced from 5 to 2i/^0 per pound ;
that on Aquavit from $2.50 to $1.25 per gallon.
The duty on certain jewelry was reduced from 55
percent to 35 percent. The duty on statuary and
certain other works of art was reduced from 20
percent to 10 percent. Natural flint was bound
duty-free as was also rennet.



LIBERIA



[Released to the press April 27]



Tariff concessions negotiated between the United
States and Liberia during the negotiations held at
Annecy, France, in 1949, will go into effect on May
20, 1950. Liberia signed the Annecy Protocol of
Terms of Accession to the General Agreement on
Tariffs and Trade last year and, on April 20, took
the other steps necessary to become a contracting
party to the agreement. Under the provisions of
the Annecy Protocol, the two Governments are
obligated to make their concessions effective 30
days after Liberia completed the necessary for-
malities.

Under the agreement, Liberia places on its free
list agricultural machinery, medicinal and phar-
maceutical preparations, insecticides, fertilizers,
and fertilizer materials, which were formerly duti-
able at from 10 percent ad valorem to 30 percent.



Online LibraryUnited States. Dept. of State. Office of Public CoDepartment of State bulletin (Volume v. 22, Apr- Jun 1950) → online text (page 59 of 116)