of the United States of America concerning the problems faced by the Government of Sweden as the result of its serious loss of gold and dollar exchange. These discussions have resulted in a mutual understanding between the two Governments as follows: [For terms of understanding, see numbered paragraphs in U.S. note, above.] WASHINGTON, D.C., February 11, 1948 A.F.F. The Swedish Chargé d'Affaires ad interim to the Assistant Secretary of State for Economic Affairs EMBASSY OF SWEDEN WASHINGTON, D.C. FEBRUARY 11, 1948 My DEAR MR. SECRETARY: Reference is made to the Minister's letter of June 24, 1947 setting forth the policies of the Swedish Government in connection with foreign exchange transactions between Sweden and the United States. It will be recalled that the final paragraph of the letter reads as follows: "If unforeseen circumstances require temporary modification of the principles set forth above, the Government of Sweden in accordance with the provisions of its memorandum of June 24, 1947, will review the situation with the Government of the United States". Last December the Government of Sweden, having decided that the payments position of Sweden required a further review with the Government of the United States, initiated discussions on the subject in Washington. It was pointed out in the discussions that Sweden has been and is taking steps to bring its payments and receipts into equilibrium for 1948, except as to a carryover of import commitments covered by import licenses issued in 1947 and a seasonal deficit anticipated during the first quarter of 1948. After careful examination of the facts, it now appears advisable to find a solution of Sweden's immediate payments difficulties through (a) reduction of import commitments referred to in the foregoing paragraph insofar as this is feasible and through (b) temporary modifications of the policies described in the letter, already cited, governing payments and transfers to the United States, involving deferments of such payments and transfers. In accordance with (b) above, the Government of Sweden therefore proposes that in cases where the authorizing of a payment between Sweden and the United States would cause Swedish gold and hard currency assets TIAS 1711, ante, p. 840. to fall below a minimum working balance, a reasonable delay in authorizing such payment will not be considered a violation of paragraph 4 of the Swedish aide-memoire of June 24, 1947 or of the terms of the Minister's letter of the same date. The Swedish Government considers the above proposal as an exceptional and temporary measure which it intends to withdraw as soon as Sweden's reserves of gold and convertible foreign exchange reach such levels that payments and transfers may be made to the United States on a current basis without adversely affecting Sweden's payments position. Accordingly, my Government would be pleased to have a review of the situation whenever either of our Governments considers that such action would be appropriate. It is the understanding of my Government that the temporary arrangements outlined in this letter would remain in effect until terminated or modified following a review of the situation as provided above. Sincerely yours, Mr. WILLARD L. THORP Assistant Secretary for Economic Affairs A. AMINOFF The Assistant Secretary of State for Economic Affairs to the Swedish Chargé d'Affaires ad interim DEPARTMENT OF STATE WASHINGTON February 11, 1948 MY DEAR MR. CHARGÉ D'AFFAIRES: I have received your letter of February 11, 1948, setting forth the proposals of the Government of Sweden for temporary modification of the provisions of the letter from the Swedish Minister dated June 24, 1947, regarding foreign exchange transactions between Sweden and the United States. It gives me pleasure to state that the provisions of your letter are acceptable to the Government of the United States. Sincerely yours, Mr. ALEXIS DE AMINOFF Chargé d'Affaires ad interim of Sweden WILLARD L. THORP RECIPROCAL TRADE: QUANTITATIVE IMPORT RESTRICTIONS AND DEFERMENT OF PAYMENTS Exchange of memorandums at Washington June 12, 1948, modifying agreement of June 24, 1947, as modified The Government of Sweden wishes to refer to discussions which have recently been held between its Embassy in Washington and representatives of the Government of the United States of America concerning the problems faced by the Government of Sweden as the result of the serious loss of its gold and dollar exchange. These discussions have resulted in a mutual understanding between the two Governments as follows: 1. Because of the large deficit in the Swedish balance of payments with the hard currency areas of the world it is recognized that the Government of Sweden continues to be faced with the necessity of taking measures to correct its present imbalance of trade and to conserve its foreign exchange. The import restrictions imposed by the Government of Sweden on March 15, 1947, as presently applied are understood to serve these purposes. 2. It is therefore agreed that the provisions contained in the exchange of aide-memoire between the two Governments dated June 24, 1947,2 as modified by the exchange of memoranda dated February 11, 1948 shall continue to be applied after June 30, 1948, until the Government of Sweden becomes a contracting party to the General Agreement on Tariffs and Trade concluded at Geneva Switzerland on October 30, 1947, or until June 30, 1949, whichever is the earlier. If by May 1, 1949, Sweden has not adhered to the General Agreement on Tariffs and Trade, the two Govern 1TIAS 1953, post, p. 866. 'TIAS 1711, ante, p. 837. TIAS 1712, ante, p. 846. ments agree to review the situation for the purpose of considering such actions as the circumstances may demand. It is further agreed that either Government after consultation as to the continued justification for this understanding may terminate it on sixty days written notice. WASHINGTON, D.C., June 12, 1948 A. A. F. F. The Department of State to the Swedish Embassy MEMORANDUM The Government of the United States of America wishes to refer to discussions which have recently been held between its representatives and representatives of the Embassy of Sweden concerning the problems faced by the Government of Sweden as the result of its serious loss of gold and dollar exchange, and to the memorandum of today's date from the Embassy of Sweden setting forth the understanding reached in these discussions. The Government of the United States of America confirms the understanding reached in these discussions as set forth in the memorandum from the Embassy of Sweden. DEPARTMENT OF STATE W. L. T. Washington, June 12, 1948 MOST-FAVORED-NATION TREATMENT FOR AREAS UNDER OCCUPATION OR CONTROL I have the honor to refer to the conversations which have recently taken place between representatives of our two Governments relating to the territorial application of commercial arrangements between the United States of America and Sweden and to confirm the understanding reached as a result of these conversations as follows: 2 1. For such time as the Government of the United States of America participates in the occupation or control of any areas in western Germany or the Free Territory of Trieste, the Government of Sweden will apply to the merchandise trade of such area the provisions relating to the most-favorednation treatment of the merchandise trade of the United States of America set forth in the Trade Agreement between the United States of America and Sweden signed May 25, 19351 (including, for its duration, the memoranda as to its application exchanged June 12, 1948), or, for such time as the Governments of the United States of America and Sweden may both be contracting parties to the General Agreement on Tariffs and Trade, dated October 30, 1947, the provisions of that Agreement, as now or hereafter amended, relating to the most-favored-nation treatment of such trade. It is understood that the undertaking in this paragraph relating to the application of the mostfavored-nation provisions of the Trade Agreement of 1935 shall be subject to the exceptions recognized in the General Agreement on Tariffs and Trade 1EAS 79, ante, p. 799. TIAS 1800, ante, p. 850. |