in or coming from Czechoslovakia, and reductions from its general rates on other listed products. These reductions, moreover, were to be extended "immediately and unconditionally so as to equal the most favorable rate which France might accord to any other country. Certain exceptions were, however, noted - including the treatment accorded to bordering countries with which France may enter into customs union.

With exceptions similar to those reserved in the case of import duties, the two countries mutually agreed to mostfavored-nation treatment in export charges and regulations. Czechoslovakia agreed to admit free of import duty certain listed products from France and to grant licenses for the importation annually of specific quantities of others. The provisions concerning the granting of export and import licenses and concerning prohibitions were detailed and involved both countries. Unconditional most-favored-nation treatment was guaranteed with respect to the raising of prohibitions of entry, to the importation or exportation of merchandise according to price conditions and to local duties. and charges affecting commercial interchange between the two countries.

Italy and Czechoslovakia signed on March 23, 1921,1 a commercial treaty differing in important respects from the one just described. It contains no lists of goods to be accorded special customs treatment. It starts out with the provisions that "there shall be full and entire liberty of commerce and navigation among the subjects" of the two

1See Commerce Reports, May 2, 1921. Effective April 15, 1921.

'On the same day Italy and Czechoslovakia signed an agreement containing elaborate provisions for the interchange of specified quantities of commodities ordinarily prohibited except under license. Effective April 15, 1921. Commerce Reports, June 25, 1921. A new treaty was signed on March 1, 1924.

countries and its general most-favored-nation clause presents an interesting example of comprehensiveness. Except for its last paragraph this article might well be considered a model one:

With respect to the amount, guarantee, and collection of import and export duties, including surtaxes, coefficients, and increases to which such duties are or may be subject, as well as with respect to the transit carriage, reexportation, warehousing, and custom-house formalities, and the transshipment of goods. and in general all that relates to commerce and industry, each of the high contracting parties undertakes to grant the other all favors and immunities which one of them may have granted or may in future grant to a third power.

In accordance with this principle, the products of the soil and industry of the Czecho-Slovak republic which are imported into Italy and the products of the soil and industry of Italy which are imported into the Czecho-Slovak republic shall, whether they be intended for consumption, warehousing, reexportation, or transit carriage, be subject to the same treatment and not liable to any different or higher duties than those levied on the products of the most favored nation.

It is understood that these provisions do not apply to the special favors now granted or which may subsequently be granted to contiguous nations in order to promote frontier traffic.

It is likewise agreed that, as far as the amount of import duties is concerned, the granting of the most-favored-nation treatment as provided in the present article will be mutually obligatory between the two high contracting parties only in case they grant such treatment to some third power. If one of the high contracting parties does not grant most-favorednation treatment unconditionally and without compensation to any other nation in the matter of import duties, it shall have the privilege of ceasing to apply such treatment to the other contracting party upon giving the latter two months' previous notice. In this case the obligation on the part of the other

high contracting party to grant most-favored-nation treatment shall also cease.1

By the provisions of a subsequent article, most-favorednation treatment is agreed upon with reference to transit taxes affecting goods of all kinds coming from or bound for the territories of the respective countries. In view of existing abnormal conditions the two countries "reserve the right to regulate the importation and exportation of products by means of embargoes or restrictions." Unless there is a special agreement of waiver, however, each country must apply such embargoes as are in force against the other" in the most favorable manner and to the most favorable degree possible."

3

Portugal and Czechoslovakia, by a commercial treaty signed December 11, 1922,2 mutually pledge most-favorednation treatment in regard to import duties and restrictions. Czechoslovakia excepts from this guarantee the treatment which may be granted to bordering countries under the provisions of the treaties of Trianon and St. Germain, but agrees to permit the unrestricted importation of a number of Portuguese products. It is understood that in case Portugal shall concede to any country, except Spain or Brazil, exemption from the payment of customs duties in gold or from liability to any surtax, the same favor shall be accorded to Czechoslovakia.

Greece and Czechoslovakia concluded a provisional commercial agreement on January 10, 1923, by which each country grants most-favored-nation treatment for certain

1 Article 8.

See Board of Trade Journal, January 4, 1923, and Commerce Reports, January 22, 1923. Apparently effective twenty days after signature. 'See Articles 205 and 222, respectively. Supra, subdivision 61.

'See Commerce Reports, March 19, 1923, March 17, 1924. Made effective by Czechoslovakia in February, 1923; ratifications exchanged Nov. 15, 1923.

listed articles imported from the other. Czechoslovakia undertakes to authorize the importation of specified quantities of certain Greek products which are subject to license requirements.

1

The four arrangements just described obviously represent four rather distinct types of international commercial agreement. The adaptability of Czechoslovakia to accommodate itself to such diverse policies as those of France and Italy 1 would seem to point to a comparative readiness to accept an unconditional most-favored-nation treaty such as the United States might be expected to offer. A preliminary arrangement between the two countries was effected by an exchange of notes operative November 5, 1923.2 The most serious problem in the negotiation of a permanent treaty appears to grow out of the difficulty of bringing within the principles of unconditional most-favored-nation treatment the Czechoslovak practice of requiring export and import licenses and establishing fixed quotas or contingents of goods for the commerce of other countries by separate agreements.

70. AUSTRALIA

Though continental in area, the Commonwealth of Australia is a country of scarcely more than five and one-half million inhabitants. Its agricultural products are not unlike those of the United States and it has large timber and mineral resources. It is, however, particularly jealous in regard to its manufacturing industries, and its commercial policy appears to have been framed with the intent of fostering their interests. The value of Australia's imports from the United States amounted to approximately 120 million dol

'There has been reported to be some sentiment in Italy favoring the abandonment of most-favored-nation agreements, at least until commercial conditions in Europe have become more stable, and the negotiation of special agreements with other countries.

2 Treaty Series, No. 673-A.

lars in 1920,' but this high mark is unlikely to be reached in normal years for some time to come.

Australia has never developed a commercial treaty system. Its relations with countries outside the British Empire are conducted through London and the benefits and obligations of a number of Great Britain's treaties extend to the whole or to parts of the Commonwealth, sometimes by the terms of the treaty in question, sometimes by the exercise of the option of adherence. However, as a recognized state at the peace conference of 1919, Australia signed the Treaty of Versailles and has signed other instruments then and since concluded. It became a member in its own name of the League of Nations and now functions as mandatory for most of the former German possessions in the Pacific. The Commonwealth has, moreover, as already noted, entered into reciprocity agreements with two of the other British self-governing dominions, New Zealand and the Union of South Africa.

2

Australia is emphatically a country that cannot be ignored in considering and planning for an American system of commercial treaties. A market so important in the trade of the United States, and potentially so vastly more important, is one in which American exports should have the protection of such assurances of continued entry as may be furnished by a treaty containing a most-favored-nation clause. This would seem obvious even if American goods were at present accorded equality of treatment. The fact is, however, that discriminations resulting from preferences allowed to other portions of the British Empire are numerous and effective. Moreover, the exceedingly illiberal policy of Aus

1Statistical Abstract of the United States, 1921, p. 468.

'For text see Appendix 6. See also Board of Trade Journal, Oct. 5, 1922. Effective, Sept. 1, 1922.

'Concerning Australia and the British preferential system, see supre, subdivision 50(a).