61 STAT.] FRANCE--MUTUAL AID SETTLEMENT-MAY 28, 1946 tariff will serve as the level from which reciprocal reductions will be negotiated in the forthcoming multilateral conference. (b) France has definitely abandoned its pre-war policy of pro- tecting French producers with import quotas. (c) The French Government has reiterated that it has abandoned the price equalization (perequation) procedure which it was com- pelled to use provisionally during the period prior to the revaluation of the franc in order to facilitate exports. III The French Government has made clear that it must maintain import controls within the framework of an import program but that it will maintain such controls only so long as they are necessary to safeguard the equilibrium of its balance of payments and to achieve in an orderly way its plan of reconstruction and modernization. The French Government will administer the issuance of import licenses under the French import program without discrimination as among foreign sources of supply as soon as France possesses, or is able to earn, sufficient free foreign exchange so that it is no longer necessary for her to make her purchases within the limits of bilateral trade and financial arrangements. IV The two Governments have reached a mutually satisfactory under- standing on the return to private channels of trade between France and the United States. The French Government has already restored to private channels a large part of the import trade of France and its colonies, and will continue to curtail the foreign procurement activities of the Government. French Government procurement in the United States will be limited to equipment for public corporations and agencies. For the time being, Government procurement will also be continued for a restricted list of items, such as short supply foodstuffs, steel, lumber, tires and certain medical supplies. Temporarily, a part of French imports will be handled by associa- tions of private traders, (groupements) until the difficulties of loading, shipment, and transport of essential supplies and their distribution in France are overcome. The French Supply Council in the United States will continue to operate on a reduced scale, engaging principally in the liquidation of outstanding contracts and governmental procurement as indicated above. It will limit its purchases to the satisfaction of essential civil- ian requirements; it will make the maximum practicable use of normal trade channels; it will pursue methods consistent with commercial practices and it will cease operations as soon as possible. V The two Governments have agreed that important benefits would accrue to both countries from a substantial expansion of French ex- ports to the United States. They hav discussed certain United States Maintenance of im- port controls by French Government. Return of trade to private channels. U.. 4211
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