INTERNATIONAL AGREEMENTS OTHER THAN TREATIES [62 STAT. Translation MINISTRY OF FOREIGN AFFAIRS REYKJAVIK July 3,1948. MR. MINISTER: I take the liberty of referring to the conversations which have recently taken place between representatives of our two Governments, relating to the territories to which the commercial agreements between Iceland and the United States of America shall apply, and to confirm that as a result of these conversations an understanding has been reached, as follows: 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, the Free Territory of Trieste, Japan or southern Korea, the Government of Iceland will apply to the products of such area the provisions relating to the most-favored-nation treatment for products of the United States of America in the trade agreement con- 67 Stat. 1075. eluded on August 27, 1943 between Iceland and the United States of America, or for such time as Iceland and the United States of America may both be contracting parties to the General Agreement on Tariffs 61Stat., Pts. and6. and Trade, concluded on October 30, 1947, the provisions of that Agreement, relating to the most-favored-nation treatment of such trade, as they now are or may hereafter be amended. It is understood that the undertaking in this paragraph relating to the application of the most-favored-nation provisions according to the Trade Agreement concluded on August 27, 1943, shall be subject to the exceptions recognized in the General Agreement on Tariffs and Trade, permitting departure from the application of most-favored-nation treatment. It is stipulated, however, that noth- ing in this section shall be construed to require compliance with the procedures specified in the General Agreement with regard to the application of such exceptions. 2. The undertaking in point 1, above, will apply only to the prod- ucts of the areas referred to therein for such time and to such extent as such areas grant reciprocal most-favored-nation treatment to products of Iceland. 3. The undertakings in points 1 and 2, above, are entered into be- cause no effective or significant tariff barriers now exist with respect lo imports into the areas herein concerned. In the event that such tariff barriers are imposed, the undertakings will not interfere with the application of the principles of the Havana Charter for an Inter- national Trade Organization relating to reduction of tariffs on a mutually advantageous basis. 4. It is recognized that because there is no uniform rate of exchange in the areas of western Germany, Japan or southern Korea referred to in point 1, that may have the effect of indirectly subsidizing the exports of such areas to an extent which it would be difficult to calculate exactly. So long as such a condition prevails, and if it does not prove possible to solve the problem in consultation with the United States 2908
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