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The Most-Favored-Nation Clause*

Published online by Cambridge University Press:  04 May 2017

Stanley K. Hornbeck
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Extract

Probably no single treaty containing the most-favored-nation clause has caused more controversy than that made between the United States and Prussia, May 1, 1828. Certainly none has attracted more attention from individuals and bodies other than ministerial. This being the case, and since this controversy and its issue illustrate, in a variety of phases common to no other single instance, the necessity for careful application of certain of the principles and methods of interpretation indicated, it will be profitable to study the history of German-American most-favored-nation relations in some detail.

Type
Research Article
Information
American Journal of International Law , Volume 3 , Issue 4 , October 1909 , pp. 797 - 827
Copyright
Copyright © American Society of International Law 1909

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Footnotes

*

For the first two sections of this article see this Journal, 3:395 (April, 1909), and 3:619 (July, 1909). The bibliography to which footnotes “op. cit.” refer, may be found at 3:396 (this Journal, April, 1909.)

References

109 See the Journal, 3:395, et seq. (April, 1909).

110 This clause is no longer in force.

111 This treaty lost effect when the Orange Free-State was absorbed into the British Empire.

112 See also article 13. This treaty is still in force.

113 U. S. treaties with the Netherlands, October 8, 1782; Great Britain, November 19, 1794; France, September 30, 1800; Great Britain, July 3, 1816; Hanover, May 20, 1840.

114 Taussig: Tariff History of the United States.

115 Based on Livingston’s note to Lederer, November 5, 1832, Moore, op. cit. V:261.

116 This Journal, 3:621 (July, 1909).

117 Glier, op. cit., 81.

118 118 Glier, op. cit., 277-299.

119 United States-Prussia, 1828; United States-Argentina, 1853; Prussia-Argentina, 1857; United States-Nicauragua, 1867.

120 Glier, op. cit., 44-49.

121 Glier, op. cit., 255-262.

122 See this Journal, 3:411 (April, 1909).

123 For an interesting point as to the ideas which the respective governments entertained at that time of their obligations see Fisk: German-American Most Favored Nation Relations, Jour, of Pol. Econ., 11:226, 1903.

124 In the Reichstag, May 7, 1897.

125 U. S. For. Rel., 1894, 234-9.

126 ΐ2β U. S. For. Rel., 1897, 175-7.

127 Mentioned supra, under History, this Journal, 3:409 (April, 1909).

128 Moore, op. cit., V: 273-4. By the Act of 1894 salt had been put on the free list, but salt coming from any country which imposed a duty on salt from the United States was subject to a duty.

129 Note to Baron v. Thielmann, February 25, 1896, U. S. For. Rel, 1896, 208-209. Moore, op. cit., V : 353.

130 See citations given in Moore, op. cit., V: 320-322, 341-356. See Hall, International Law, 5th ed., 351-352. See Glier, op. cit., 303-307.

131 Fisk: Jour. Pol. Econ., 11:221, 1903.

132 See citations in Moore, op. cit., V: 353-355.

133 Calwer: Meistbeguenstigung der Vereinigten-Staaten, 28. See Pisk, : Jour. Pol. Econ., 11:235–6, 1903 Google Scholar.

134 See Glier, 303-307.

135 U. S. For. Rel., 1899, 297. Moore, op. cit., V: 285.

136 Hay to White, April 8, 1899. U. S. For. Rel., 1899, 301. Moore, op. cit., V: 387-388.

137 Quoted by Prof.Fisk, , Jour, of Pol. Econ., 11:236, 1903 Google Scholar.

138 “Die Vereinigten-Staaten sind nicht mehr meistbegünstigt in Deutsehland.”

139 “Das wurde der Fall sein, wenn wir mit der Vereinigten-Staaten ein allge meines Meistbeguenstigungsverhaeltnis haetten. Das ist aber nicht der Fall. * * * Davon kann also gar keine Rede sein, dasz den Vereinigten-Staaten von Amerika ipso facto eines Vertragsabschlusses mit anderen Staaten neue Kon zessionen zufallen koennten.” Quoted in Glier, 267. See also Glier, 310.

140 “* * * die Ueberraschung der Reichsregierung * * * voellig unbegruendt war.” Glier, op. cit., 81. “Wir hatten keinen glatten Meistbeguenstigungsanspruch gegen sie,” 273. “ * * * die Amerikaner ihren Vertragspflichten loyal und gewissenhaft nach zu kommen bestrebt sind,” 274-275.

141 Passim, but especially pp. 6, 8, 9, 61-62, 277. The Argentina-Prussian treaty of 1857 has never been abrogated, but the same arguments apply as to its being or not being in force which have been cited for the United States-Prussian treaty.

142 Fisk, : Jour. Pol. Econ., 11:222, 1903 Google Scholar.

143 On the subject of our recent commercial relations with Germany, see 60th Cong., 1st Sees., Sen. Doc. 185; Weltwirtschaft, 1907, I, p. 16, and 1908, I, p. 8; U. S. Tar. Series, No. 7, 1008; Willis, H. P.; Reciprocity with Germany, Jour. Pol. Econ., 15:321-344, 386-398, 1907. [Since Mr. Hornbeck wrote this article the United States has denounced its commercial agreements with foreign nations in view of the new tariff law. — ED.]

144 See Willis, : Jour. Pol. Econ., 15:388 ff, 1907 Google Scholar.

145 Cf. Cavaretta, op. cit., 159.

146 De Martens, , Droit international, Tome II: 322 Google Scholar; Calvo, : Droit international, VI: 287 Google Scholar.

147 Lehr, op. cit., 315.

148 “Andrerseits laesst sich freilich nicht verkennen, dass durch die stricte Interpretation der nnbeschraenkten Meistbeguenstigungsclausel in einzelnen Faellen sehr harte Consequenzen fuer den Verpflichteten entstehen koennen.” (Von Meile, op cit., 206.)

149 Schraut, op. cit., 43.

150 Von Melle, op. cit., 206.

151 “Uebrigens duerfte von der Loyalitaet der contrahierden Staaten die Abstandnahme von einer derartigen unbilligen Ausnutzung der Meietbeguenstigungsclausel zu erhoffen sein.” (Von Meile, op. cit., 206.)

152 “Der Inhalt der Meistbeguenatigungsvertracge bestimmt sieh nicht durch meinen VeTtragswillen, sondern durch den Vertragswillen anderer Staaten.” In the Reichstag, January 22, 1892.

153 “Diese Erklarungen bilden u. E. das etaerkste Argument gegen die unbedingte Meistbegunstigung.” Glier, 353-354.

154 This Journal, pp. 401-402 (April, 1909).

155 Quoted in Argentina: Doc. Dip. y Consulares, Bol. No. 17, 1903, p. 9.

156 See Meredith : Protection in France, 20-22.

157 Cf. Fontana-Russo: Trattato di Politica-Commerciale, p. 606.

158 Cf. Yves Guyot: La Comédie Protectioniste, 32.

159 Von Melle, op. oit., 210.

160 “‘By the self-registering action of the most-favored-nation clause, common to this network of treaties, the tariff level of the whole body is continually lowered, and the road being paved towards the final embodyment of the Free Trade principle in the international engagement to abolish all duties other than those levied for revenue purposes.’” ( Morley, , Life of Cobden, II: 342 Google Scholar.)

161 Great Britain has a list of twenty dutiable articles, the duties being levied for revenue or sumptuary purposes only.

162 “It would require the clearest language to justify the conclusion that the United States government intended to preclude itself from * * * engagements with other countries which might in future be of the highest importance to its interests.” (Whitney v. Robertson, 124 U. S. 190.) Cf. Barclay, op. cit., 140. Cf. supra, p. 412 (this Journal for April, 1909).

163 See Fisk: International Commercial Policies, 95.

164 Cf. Herod, op. cit., 116.

165 Cf. Livingston to Lederer, November 5, 1832. Moore, op. cit., V: 251.

166 “What we [English] forget is, that, in its commercial policy, every other Nation has to think of its tariff relations with the whole world — of which we are not always the largest part. And what we should remember is that it would be a very serious thing for a protected country to give us advantages that it might otherwise be inclined to give us, when, under its Most-Favored-Nation Clause, it would have to give the same advantages to other nations.” (Smart: The Return to Protection, 137.) Cf. Poinsard: Droit International, 325; and Grunzel: System der Handelspolitik, 462-463.

167 Cf. Stone, : N. Am. Rev., 182:445, 1906 Google Scholar. Cf. supra.

168 See Stone, : Annale American Academy, 32:379–380, 1908 Google Scholar. See Senator Beveridge, ib., 409 ff.

169 See Annals American Academy, 32:313-312, 1908.

170 Willis, : Reciprocity with Germany. Journal of Pol. Econ., 15:385–398, 1907.Google Scholar “Back of this [the problem of tariff policy] is the question to be determined by the State Department with regard to the future interpretation of the most-favored-nation clause. The adoption of the European interpretation of that clause will bring our commercial diplomacy into line with that of other nations, and will do away with serious danger of friction in the future. Could the adoption of the European interpretation * * * be coupled with such a policy of tariff revision as has been suggested, the commercial difficulties which now threaten, not only from the side of Germany, but in other quarters as well, would be definitely removed.” (Ib., 394-395.)

171 Cf. Von Melle, op. cit., p. 207.

172 “* * * nous pensons d’accord avec notre eminent collègue qu’il est essentiel de remplaoer cette clause dans les traités ä conclure par une définition plus exacte, par exemple, par une disposition portant que ‘ les parties contractantes se concèdent mutuellement tous les avantages relatifs au commerce et i la navigation, accordée par elles gratuitement à n’importe quelle autre puissance.’ Quant aux avantages accordés moyennant échange ou compensation, il nous paraît qu’ils devraient toujours être exclus de la clause.” (Lehr, op. cit., 315-316.)

173 In the Reichstag, January 15, 1903. Quoted in Glier, p. 323.

174 Jones, Lloyd: The American Interpretation of the most-favored-nation clause. Annals American Academy, 32:393, 1908 CrossRefGoogle Scholar.

175 Cavaretta, op. cit., 167-168, and note 2.

176 Argentina : Doc. Dip. y Consulares. Bol. No. 17, pp. 17-18, 1903.

177 Senor Ernesto Frias, of Uruguay, read a paper in which he favored the abandonment of the most-favored-nation clause for a system of maximum, minimum, and special tariffs. Senor Julio Philippi, of Chile, argued that the most-favored-nation clause need not be considered incompatible with other systems of tariff policy, and urged that much of the inconvenience which attaches to the use of the clause on account of the uncertainty as to its interpretation could be avoided if nations would stipulate in the treaties in which they insert the clause just what interpretation is to be given it.

178 See Yale Law Journal, 1907, p. 32.

179 The next paragraph prescribed for the selection of the commission.

180 See Treaty between Austria-Hungary and Germany, January 25, 1905. The treaty between Great Britain and Bulgaria, November 26, 1907, provides, article 18, that “any controversies * * * regarding the interpretation or application of the tariffs annexed * * * including the additional stipulations * * * as well as the rates of the Convention tariffs agreed upon between the contracting parties and third states, shall, on the demand of one or other * * * be adjusted by means of arbitration.” The treaty between Great Britain and Servia, March 31, 1908, article 14, contains similar provisions.