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German-American Commercial Relations

Published online by Cambridge University Press:  04 May 2017

Wallace McClure*
Affiliation:
Assistant to the Economic Adviser, Department of State

Extract

In the Treaty of Friendship, Commerce and Consular Rights signed with Germany on December 8,1923, the United States inaugurated an important development of its commercial policy in conformity with the Tariff Act of 1922, Section 317 of which directs the President, if “the public interest will be served thereby,” to “specify and declare new or additional duties” upon goods imported from countries that discriminate against the commerce of the United States. Pursuant to this provision the American Government undertook the negotiation of agreements with other countries both to eliminate existing discriminations and to obtain assurances that existing equality of treatment would be maintained. Preparation for the new series of commercial arrangements included a careful scrutiny of the most-favored-nation clause as applied to customs duties.

Type
Research Article
Copyright
Copyright © by the American Society of International Law 1925

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References

1 Reciprocity and Commercial Treaties, 1919. The reciprocity arrangements with Canada, 1854; Hawaii, 1875, and Cuba, 1902; and with a number of countries in accordance with the Tariff Acts of 1890 and 1897, were analyzed in this report. The Tariff Act of 1909, like that of 1922, provided for retaliation against discrimination.

2 Prior to 1922, several treaties, the language of which was expressly unconditional, had been entered into by the United States. In most of these the pledges were unilateral and were obtained from backward or ex-enemy states. Where bilateral, the unconditional language appears to have occurred without deliberate intention to alter American policy. The bilateral most-favored-nation articles of the treaty of 1850 with Switzerland were the earliest such example. The treaty of 1881 with Serbia (now Kingdom of the Serbs,Croats and Slovenes) is the sole survivor of the bilateral pledges concluded before the adoption of the Tariff Act of 1922; the unconditional form of the most-favored-nation clause, however, has had no practical effect upon the operation of the treaty.

3 In the oases of Poland and Esthonia the agreements were subject to legislative approval in those countries. The agreement with Finland came into effect on May 17, 1925, only "in so far as it concerns import and export duties;" otherwise it requires for its operation legislative action by Finland.

4 The advice and consent of the Senate to its ratification was granted February 10, 1925; it passed the Reichstag August 12, 1925. It becomes by its terms operative on the day of the exchange of ratifications, October 14, 1925.

5 Germany had previously entered into most-favored-nation agreements with a few minor enemy states, and by the Treaty of Rapallo, April 16, 1922, with the Union of Soviet Socialist Republics reciprocal most-favored-nation treatment was pledged. Germany has concluded treaties with Great Britain and Italy; with France and Japan it has entered upon negotiations, which have not, as the present issue of the JOURNAL goes to press, been reported to have reached signature.

6 Concluded September 10; became operative in October, 1786. Those earlier in date were with France (1778), The Netherlands (1782) and Sweden (1783).

7 See Articles II-VIII.

8 Re-exported goods are seldom required to pay customs duties.

9 Article I. By Article XII the United States agreed to extend on condition of reciprocity the stipulations of the treaty with Hanover to such other States of the Germanic Confederation as might accede to them. This the Duchy of Oldenburg did in 1847. Mecklenburg-Schwerin negotiated, instead, a separate treaty.

In 1861 the United States and Hanover concluded a convention abolishing river tolls on American vessels in the Elbe.

10 The treaty as a whole was to have a minimum term of about ten years. Transit dues on the aforementioned articles were abolished in ports and limited on the Berlin-Hamburg railroad.

11 Moore, J. B., A Digest of International Law, Vol. 5, pp. 288 et seq. Google Scholar

12 Sec. 3. The other items removable from the free list for bargaining purposes were coffee, tea, molasses and hides.

13 Act of August 30, 1890, especially Sections 4 and 5.

14 This series is known as the Caprivi treaties and dates from 1890, 1892 and 1893.

15 For texts of notes, Presidential proclamation under the Tariff Act of 1890, and other correspondence, see Senate Ex. Doc. No. 119, 52nd Cong. 1st Sess., pp. 108113.Google Scholar

16 Act of March 3, 1891; regulations issued March 25, 1891.

17 Some products not strictly agricultural were included in the list, which was later transmitted to the American Government.

18 The German writer, Glier, maintains that this treaty was abrogated altogether when Germany became a part of the Empire. (Die Meistbegunstigungsklattsel, pp. 303307).Google Scholar Certain early conventional rates under the Empire were not extended to the United States. Dr.Hornbeck, considers that it was inoperative after perhaps 1891 (the Most-favored-nation Clause in Commercial Treaties, pp. 9697).Google Scholar

19 Germany also agreed to a relaxation of certain sanitary requirements for the admission of American dried fruit.

20 Exception to most-favored-nation treatment by reason of contiguity and close political affiliation is rather commonly recognized.

21 The arrangements entered into with Germany under the Tariff Act of 1897 are published in Malloy's collection of Treaties, Conventions, International Acts, Protocols and Agreementsbetween the United States of America and Other Countries, Senate Doc. No. 357,61st Cong. 2d Sess.Google Scholar

22 After the beginning of the World War in 1914 the United States and Germany both appear to have considered the Prussian Treaty of 1828 in force and applicable to the relations between the United States and the whole German Empire.

23 Tariff Negotiations between the United States and Foreign Governments, 1910, H. R. Doc. No. 956, 61st Cong. 2d Sess., pp. 10, 17.Google Scholar

24 The Journal of Political Economy, Vol. XV, 1907, p. 395 Google Scholar. Dr.Willis', H. Parker; two articles (pp. 321 et seq. and 385 et seq. ) on “Reciprocity with Germany” give the background of the negotiations described above. See also Fisk, “German-American Most-favored-nation Relations,” ib., 1903, Vol. XI, p. 221;Google Scholar Shaw, Leslie, M. (Secretary of the Treasury), Current Issues, 1908, Chap. XXVI.Google Scholar

25 Hornbeck, op. cit, p. 97.Google Scholar

26 See Art. 289. Treaty Restoring Friendly Relations between the United States and Germany, Art. II (1).

27 The provision of the Treaty of Versailles lapsed on Jan. 10, 1925, five years after the coming into force of the treaty. See Art. 280.

28 See Kuhn, Arthur, K., “The New Commercial Treaty with Germany,July, 1925, issue of the Journal, p. 553, for a helpful summary.Google Scholar Mr. Kuhn's statement, on page 554, that most-favored-nation clauses have been held by the Supreme Court not to interfere with arrangements founded upon concessions based on valuable considerations, should be read as applicable to clauses that are either expressly conditional or are not expressly unconditional, such as have heretofore regularly been employed in American commercial treaties providing for most-favored-nation treatment. The most-favored-nation clause in the new treaty with Germany, as above indicated, is expressly unconditional. The intent of the parties was to give assurance of equality of treatment without any condition. Regardless of any consideration that may be accorded by third countries, concessions granted such countries are expected to be extended to the other party to this treaty simultaneously and without compensation. The cited decisions of the Supreme Court are based upon essentially different language and intent.

29 The protocol was concluded with only two of the eight countries which have accepted the convention.

30 Articles VII, IX, XI. Coastwise traffic is excepted from the promise of national treatment; concerning it, however, most-favored-nation treatment is assured.

31 The latter with particular reference to American prohibition laws.

32 Congressional Record, Feb. 7, 1924, more than a year prior to approval.

33 No President, however, has done so.

34 In this connection, attention may be called to the following passage in President Wilson's address of January 8,1918:

“The removal, so far as possible, of all economic barriers and the establishment of an equality of trade conditions among all the nations consenting to the peace and associating themselves for its maintenance.”

The President explained that by this he meant, in respect of the tariff problem, that “whatever tariff any nation might deem necessary . . . , it should apply equally to all foreign nations.”