Evening star., 1934-10-20
.PARLEYS TO BEGIN
WITH TWO NATIONS
Reciprocal Trade Agree.
ments Sought by France
and Italy.
BY CONSTANTINE BROWN.

by CONSTANIINE DhOWNs
Two major powers are scheduled to
begin conversations with the Amert-
can Government for reciprocal trade
agreements shortly. These are Italy
and France.
Officiab Of the State Department
have already started q preliminary
exchange of views with the Italian
government on this subject.
The interested foreign governments
fully indorse the principles which are
advocated by Secretary of State Cor
dell Hull for q revival Of international
trade on the basis Of international
cooperation and drastic reduction Of
trade barriers. But they fear that for
the time being these laudable prin-
ciples will not quite 1T In the frame
work Of existing relations between
countries.
Situation With Italy.
Italy, for instance, 10 in o difncult
situation. In 1893 the trade balance
went against her to the tune Of about
$45, ,OO0, 900. As far as trade with the
United States Is concerned she has
purchased more in this country than
she has been able to sell.
One Of the main struggles Of the
Italian government at present Is the
defense Of the lira. II the Italian
government were to permit continu-
alton of an adverse trade balance. 1t
would become difiicult to maintain
currency at the present rate Of ex-
change. Or, Mussolini and his hnan-
cial advisers are determined to main
tain the lira at its present level, which
corresponds to Italy's economic and
financial situation.
The Italians are anxious to reach q
bilateral trade agreement with the
United States, but 1t Is pointed out in
Rome that such an agreement must
be based on an equilibrium Of exports
and imports between the two coun-
tries. That is say that Italy will have
TO sell about the same amount she Is
willing to purchase in this country in
order to avoid its currency going
down.
Favored Nation Clause.
The United States Government is
determined to maintain the most
fsvored-nation clause in all its trade
agreements. The belief of the Secre-
tary Of State is that principle is fair
and conducive, eventually. to a real
understanding between all nations,
without showing favor to any country
in particular, and without causing q
diversion of trade which would prove
ultimately damaging to every country.
The Italian government, according
TO reports from Rome, is willing TO sub
scribe to this theory and let that
clause be inserted in the future Italo-
American agreement.
But it appears that the American
Government would like to obtain as
surances from II Duce that there will
be no further quotas and embargoes
between the two countries once q new
agreement has been reached.
Rome is somewhat reluctant to COM
init itself to such q policy. The argu-
ment which the Italian government
Is putting forward Is that while it
does not intend to discriminate against
American goods. it may pe faced with
situation in the future whereby an
other country may decide to discrimi-
nate against italian commodities In
such a case Italy will have to retaliate
by increasing the duty on certain
products. On the basis of the most
favored nation clause such duties will
have to be applied to goods coming
from any country with which Italy
has general trade agreements and
American products could not be ex-
cepted. Hence Italy could not COM
NIT itself. In all fairness. to q policy
which circumstances might compel
her to change overnight.