The State Department at Washington announced on June 5, 1918, that
it had appointed an economic representative, who was to join the
American Embassy at Rome. This was regarded as the first step in a
general policy of more active participation by the United States in
preparations of the nations at war with Germany for the after-the-war
trade struggle.
The new treaty of alliance between Germany and Austria to control all
Central European sources of raw materials, and to exclude other nations
from equal trade privileges, with similar restrictions imposed by the
new treaties forced on Finland, Ukrainia, and Rumania, changed the
attitude of the American Government, which at first had not assented to
the proposals of the Paris Economic Conference to interpose artificial
obstructions to free commerce with the Central Powers after the war.
The Italian Government recently named a commission to study
after-the-war problems, and with this commission the American economic
delegate will have close relations. Italian importing and exporting
interests in the United States also have taken advantage of the
opportunity afforded by the decision of the Italian Government to
consider this important subject, and have joined in the dispatch of a
committee to Italy to co-operate. Italian industries, though of great
potential strength and capable of returning large profits on their
capitalization, are said to require substantial assistance from America
if they are to go on after the war without relapsing into the control
of German financiers.
It is reported that economic representatives will be sent to the
American Embassies in all the allied capitals.
On May 14 Mr. Bonar Law, British Chancellor of the Exchequer, announced
in the House of Commons that, in order to leave its country's hands
free for the time when peace arrived, the French Government had
denounced all commercial conventions containing a general clause
regarding "most-favored nations"; and that, in view of the probable
scarcity of raw material after the war and the necessity for providing
for the needs of the British Empire and the Allies, the British
Government intended to adopt a similar course.
In answer to other questions, Mr. Bonar Law said that the British
Government had not changed its policy expressed in the Paris
resolutions since the entrance of the United States into the war; he
had every reason to believe that America was very anxious for unity of
economic control, and agreed that any useful action would be much more
effective if taken in conjunction with our allies.
Lord Balfour of Burleigh's committee considered the question of the
denunciation of commercial treaties and reported against it. The
report contains a summary of the various commercial treaties which
are in existence between Great Britain and other countries. Those
with enemy countries have been terminated by the war. In the case
of allied countries commercial treaties on the basis of reciprocal
most-favored-nation treatment are in force between the United Kingdom
and Italy, Portugal, Russia, the United States, Japan, Serbia, and
Montenegro. There is a similar treaty with Rumania. United Kingdom
goods have most-favored-nation treatment in France, owing to a
legislative enactment and not by treaty right, for customs duties were
excepted from the scope of the Anglo-French commercial convention of
1882.
Great Britain has commercial treaties on the most-favored-nation
basis with Switzerland and Greece. In the case of the Netherlands and
Denmark, the general principle of most-favored-nation treatment is
subject to minor limitations. The position with regard to Sweden and
Norway is doubtful; but the old treaty of 1826 with Sweden and Norway
on a reciprocal most-favored-nation basis has continued in operation in
practice, in spite of the dissolution of the union between Sweden and
Norway in 1905.
Outside Europe, Great Britain has commercial treaties providing for
reciprocal and unconditional most-favored-nation treatment with
Argentina, Bolivia, Colombia, Honduras, Mexico, Nicaragua, Paraguay,
and Venezuela. Those with Costa Rica and Liberia are conditional.
Nearly all these commercial treaties are subject to a fixed period
of notice on either side as a condition of denunciation. The treaty
with Japan cannot be terminated before 1923. The treaty with Portugal
has only recently been completed, after years of negotiation. Twelve
months' notice of termination is required in the case of the treaty
with Switzerland and of most of those with neutral countries outside
Europe. The Spanish agreement--it is based on an exchange of notes in
1894--is subject to six months' notice.
Before the war there was no commercial treaty between the United
Kingdom and Germany. The United Kingdom enjoyed most-favored-nation
treatment in Germany in customs matters by virtue of a biennial law.