Most Favoured Nation Clause

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Whatever jurists may think, however, in practice the American interpretation has to be taken into account. For instance, the treaty between Great Britain and Uruguay of July 15, 1899, spe cifically restricts the application of the existing most favoured nation clause :—"It was also agreed that the stipulations con tained in the treaty which is to be renewed do not include cases in which the Government of . . . Uruguay may accord special favours, exemptions and privileges to the citizens or products of the United States, of Brazil, of the Argentine Republic, or of Paraguay in matters of commerce. Such favours cannot be claimed on behalf of Great Britain on the ground of most favoured rights as long as they are not conceded to other States." Post-War Treaties.—Since the World War the United States has made a number of commercial treaties with an unconditional most favoured nation clause. In the treaty with Germany of Dec. 8, 1923 (existing treaties between the Allied and Associated Powers and Germany having lapsed) the clause is as follows :— "with respect to the amount and collection of duties on imports and exports of every kind, each of the two High Contracting Parties binds itself to give to the nationals, vessels and goods of the other the advantage of every favour, privilege or immunity, which shall be accorded to the nationals, vessels and goods of a third State, and regardless of whether such favoured State shall have been accorded such treatment gratuitously, or in return for reciprocal compensatory treatment. Every such favour, privilege or immunity which shall hereafter be granted to the nationals, vessels or goods of a third State shall simultaneously and uncon ditionally, without request and without compensation, be extended to the other High Contracting Party for the benefit of itself, its nationals and vessels." But from this all-inclusive provision the United States excepts its treatment of commerce with Cuba and its possessions. Coast wise traffic is also excepted. This measure is thus a compromise between conflicting views. "The introduction," says McClure, "of preferences in the matter of shipping would, in any but the narrowest sense, be inconsistent with, and would in all probability practically destroy the development of an unconditional most favoured nation tariff policy." When before the Committee on Foreign Relations this treaty was declared to be a model for subsequent commercial treaties and accordingly similar agreements with similar reservations have been reached with Brazil, Czechoslovakia, Dominica, Estonia, Finland, Greece, Guatemala, Hungary, Latvia, Lithuania, Nica ragua, Rumania and Siam.

Since the Peace Treaty of 1919, Great Britain has entered into a great number of treaties of commerce and navigation in which she has taken care to make the unconditional character of the most favoured nation treatment quite clear.

The commercial treaty between France and the Seychelles islands of April 16, 1902, having been denounced, the convention between Great Britain and France of June 5, 1920, contained pro visions entitling certain products of the Seychelles islands to the lowest custom duties applicable to similar products of foreign origin in France and giving a preference to French wines imported into the Seychelles islands.

In the Treaty with Latvia of June 22, 1923, the language of the most favoured nation clause becomes more precise and uncon ditional. The relevant provisions are as follows :—"Art. 1. There shall be between the two Contracting Parties reciprocal freedom of commerce and navigation. The subjects or citizens of each of

the two Contracting Parties shall have liberty freely to come with their ships and cargoes to all places and ports in the territories of the other to which subjects or citizens of that Party are or may be permitted to come, and shall enjoy the same rights, privileges, liberties, favours, immunities and exemptions in matters of com merce and navigation, as are or may be enjoyed by subjects or citizens of that Party. The subjects or citizens of each of the Contracting Parties shall not be subject, in respect of their per sons or property or in respect of their commerce or industry, to any taxes whether general or local, or to imports or obligations of any kind whatever, other than those which are or may be im posed upon subjects or citizens of the most favoured nation." "Art. 2. The Contracting Parties agree that in all matters re lating to commerce, navigation and industry, any privilege, favour or immunity which either Contracting Party has actually granted, or may hereafter grant, to the ships and subjects or citizens of any other foreign State, shall be extended simultaneously and unconditionally, without request and without compensation, to the ships and subjects or citizens of the other, it being their inten tion that the commerce and industry of each Party shall be placed in all respects on the footing of the most favoured nation." "Art. 5. Articles, the produce or manufacture of the territories of one of the Contracting Parties, imported into the territories of the other, from whatever place arriving, shall not be subject to other or higher duties or charges than those paid on like articles, the produce or manufacture of the territories of any other foreign country. Nor shall any prohibition or restriction be maintained or imposed on the importation of any article, the produce or manu facture of the territories of either of the Contracting Parties, into the territories of the other, from whatever place arriving, which shall not equally extend to the importation of the like articles being the produce or manufacture of the territories of any other foreign country." "Art. 6. Articles, the produce or manufacture of the territories of either of the Contracting Parties, exported to the territoriet of the other, shall not be subjected to other or higher duties or charges than those paid on the like articles exported to any other foreign country. Nor shall any prohibition or restriction be im posed on the exportation of any article from the territories of either of the Contracting Parties to the territories of the other which shall not equally extend to the exportation of the like article to any other foreign country." "Art. 7. As an exception from the general undertaking given by the Latvian Government to accord the most favoured nation treatment to the commerce of His Britannic Majesty's Govern ment, it is understood that His Britannic Majesty's Government will not claim the benefit of any customs preferences or other facilities of whatever nature which are or may be granted by Latvia in favour of Russia, Finland, Esthonia or Lithuania in re gard to Russian, Finnish, Esthonian or Lithuanian goods respec tively, so long as such preferences or facilities are not extended by Latvia to any other foreign country." A similar commercial convention was entered into on July 1923, by the British empire, France, Italy, Japan, Greece, Rumania and the Serb-Croat-Slovene State of the one part and Turkey of the other. .

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