COMMERCIAL TREATIES. Definition. Treaties of commerce and navigation are agree ments between nations relative to the privileges and immunities which may be enjoyed by the commerce and by the citizens or subjects of each party to the treaty within the territory of the other. In general or specifically such treaties, conventions or agreements define the terms under which the citizens or subjects of each of the contracting governments may re side and pursue their industries and occupa tions within the territories of the other gov ernment, and under which the vessels and com merce of each may enter the ports, etc., of the other for trade and transportation. The object of such treaties is to procure the greatest pos sible freedom from discrimination in the pur suit of trade and the expansion of industries, and to this end they are reciprocal in terms.
In Case of Permanent rights and general arrangements made between countries by treaty do not cease on the occurrence of war, but are, at the most, only suspended while the war lasts. (U. S. Supreme Court 1823-8 Wheat. 464, 494— Moore, Vol. V).
Modern A policy of discrimination in favor of one foreign nation as against others is repugnant to the modern spirit of commerce. The application of the principle that a favor granted by one nation to another must be equally extended to all other nations for like consideration is now almost universal. Usually nations entering into a treaty of commerce and navigation agree, reciprocally, to extend to the citizens or subjects and to the commerce of the other within its territories the same privileges that are enjoyed by natives, under the laws of the nation within whose territories such privi leges are granted.
Great Britain, France and Germany.— Great Britain, France and Germany has each a distinct policy as to concessions for trade expansion, each applying a form of discrimina tion in its own favor without violation of the principle of equality of treatment of foreign nations. Great Britain, as a free trade nation, opposes the employment .of discriminating cus toms duties and places the broadest possible construction upon the "most favored nation' principle. The policy of France has been that of specific reservations favorable to her own citizens, but is tending toward greater liberality. In 1882 she terminated all her European tariff treaties, and in 1892 adopted a minimum tariff for all nations with whom she had a most favored nation agreement and a maximum tariff for all others. The Entente Cordiale convention be tween France and Great Britain (1904) made provision for equality of import, customs dues, etc., as to trade, conunerce and naviootion
facilities of each with Morocco and Egypt; with reference to the Suez Canal and Gibraltar and as to fisheries in certain portions of the territorial waters of Newfoundland. In 1907 a reciprocal treaty was entered into between the two governments as to Canada, dealing with specific schedules, later (1909) enlarged in scope.
Germany in 1902 adopted a tariff system which was put into effect in 1906, making an increase in tariff rates, but providing lesser or °conventional° rates to be made effective .by conimercial treaties. The most favored nation clause in existing treaties of the empire w.as terminated and in 1905 treaties were made with Austria-Hungary, Russia, Italy, Switzerland, Belgium, Rumania and Serbia, by which these countries get the benefit of the °conventional° rates.
United States.— In the enactment of the 1909 tariff the United States adopted the maxi mum and minimum system effectmg commercial agreements, but preserved the most favored nation principle as interpreted by this govern ment. A concession of the lower rates was accorded to countries not unduly discriminating against the United States, and all countries now enjoy this concession.
Most Favored Nation.— The most favored nation clause, contained in nearly all treaties, may be declared in a few words with respect to each provision of a treaty, or be made the subject of a separate article. The form ap proved by the United States is: °Except as otherwise expressly provided in this treaty, the High Contracting Parties agree that, in all that concerns commerce and navigation, any privi lege, favor or immunity which either contract ing party has actually granted, or may hereafter grant, to the citizens or subjects of any other State shall be extended to the citizens or sub jects of the other contracting party gratui tously if the concession in favor of that other State shall have been gratuitous, and on the same or equivalent conditions, if the concession shall have been conditional.) The United States construes the most favored nation clause to imply a reservation as to favors granted gratuitously, as expressed in the above article, whether so stated in exact terms or not. (Adams, 1817; and adhered to by United States State Department). Great Britain and some others contend that there is no such reservation unless expressed in terms.