the Philippines by new schedules which are more liberal to the Philippines, as set forth below:

This article also provides for the elimination by the Philippines of the present 17 percent exchange tax and its replacement by a temporary special import levy which will be reduced at the rate of 10 percent per year beginning in 1957. The latter will not apply to invisibles as did the exchange tax.

Article II: The revised agreement modifies U.S. quotas on Philippine products by:

a) Eliminating quotas on rice.

b) Removing absolute quotas on cigars, scrap tobacco, coconut oil, and buttons and providing a new and slower schedule for the progressive decrease in duty-free quotas on these commodities. c) Removing any impediment to possible future increases in the absolute quotas on sugar.

d) Removing criteria for allocation of U.S. quotas among producers.

Article III: Reciprocal provisions are made for quantitative import restrictions which may become necessary for the protection of domestic industries and to safeguard monetary reserves. Conditions for the imposition of such restrictions include advance consultations.

Article IV: The prohibition on the imposition of export taxes by either country is eliminated in the revised agreement.

Article V: The revised agreement eliminates the old article relating to limitations on changes in the Philippine exchange rate and on restrictions on transferability of funds. The new language substituted provides for Philippine implementation of U.S. proposals for reciprocal arrangements to facilitate the entry and stay in either country of persons classifiable as traders and investors.

Article VI: The obsolete terms of the old agreement relating to immigration are replaced in the revised agreement by the modified terms of former article VII. These terms mutualize as between citizens of both countries the right to use and exploit natural resources and operate public utilities on the basis of national treatment.

Article VII: The revised agreement contains here a new article providing for reciprocal nondiscrimination by either party against the citizens or enterprises of the other with respect to engaging in business activities.

Article VIII: The revised agreement inserts here security exceptions not previously contained.

Article IX: With deletion of obsolete terms, former article VIII regarding implementing legislation in both countries is repeated here. Article X: Old article IX providing for consultations on interpretation or application is amended to provide for consultations 3 years prior to termination.

Article XI: Obsolete portions of former terminating article X are deleted, leaving those portions applying to termination with the insertion of the effective date of the revisions.

Protocol: Some revised definitions are substituted.

C. INDOCHINA

United States Policy Regarding the Communist Threat in Indochina, 1950-1953

16. UNITED STATES RECOGNITION OF INCREASED SOVEREIGNTY IN THE STATE OF VIET-NAM: Note From the United States Ambassador-at-Large to the Chief of State of Viet-Nam,2 January 27, 1950 3

3

The Secretary of State, Dean Acheson, has instructed me to express to Your Majesty the gratification of the United States Government at the assumption by Your Majesty of the powers transferred by

1 Philip C. Jessup.

2 Bao Dai.

2 Department of State Bulletin, Feb. 13, 1950, p. 244.

the French Republic at the beginning of this year, and its confident best wishes for the future of the State of Viet Nam with which it looks forward to establishing a closer relationship. My Government believes that both the people of Viet Nam and the people of France are to be congratulated on this development.

The Secretary of State also asked me to express his personal hopes that Your Majesty will succeed in his present endeavors to establish stability and prosperity in Viet Nam, which, Your Majesty may be assured, my Government is following with close attention.

17. UNITED STATES RECOGNITION OF VIET-NAM, LAOS, AND CAMBODIA: Statement by the Department of State, February 7, 1950 2

The Government of the United States has accorded diplomatic recognition to the Governments of the State of Viet Nam, the Kingdom of Laos, and the Kingdom of Cambodia.

The President, therefore, has instructed the American consul general at Saigon to inform the heads of Government of the State of Viet Nam, the Kingdom of Laos, and the Kingdom of Cambodia that we extend diplomatic recognition to their Governments and look forward to an exchange of diplomatic representatives between the United States and these countries.

Our diplomatic recognition of these Governments is based on the formal establishment of the State of Viet Nam, the Kingdom of Laos, and the Kingdom of Cambodia as independent states within the French Union; this recognition is consistent with our fundamental policy of giving support to the peaceful and democratic evolution of dependent peoples toward self-government and independence.

In June of last year, this Government expressed its gratification 3 at the signing of the France-Viet Namese agreements of March 8, which provided the basis for the evolution of Viet Namese independence within the French Union. These agreements, together with similar accords between France and the Kingdoms of Laos and Cambodia, have now been ratified by the French National Assembly and signed by the President of the French Republic. This ratification has established the independence of Viet Nam, Laos, and Cambodia as associated states within the French Union.

It is anticipated that the full implementation of these basic agreements and of supplementary accords which have been negotiated and are awaiting ratification will promote political stability and the growth of effective democratic institutions in Indochina. This Government is considering what steps it may take at this time to further these objectives and to assure, in collaboration with other

1 Documents on International Affairs, 1949-1950 (London, 1953), pp. 596-608. 2 Department of State Bulletin, Feb. 20, 1950, pp. 291–292.

3 Ibid., July 18, 1949, p. 75.

See Franco-Vietnamese agreement of Mar. 8, 1949; Documents on International Affairs, 1949-50 (London, 1953), pp. 596–608.

like-minded nations, that this development shall not be hindered by internal dissension fostered from abroad.

The status of the American consulate general in Saigon will be raised to that of a legation, and the Minister who will be accredited to all three states will be appointed by the President.

18. EXTENSION OF MILITARY AND ECONOMIC AID: State1 ment by the Secretary of State, May 8, 1950 1

The [French] Foreign Minister and I have just had an exchange of views on the situation in Indochina and are in general agreement both as to the urgency of the situation in that area and as to the necessity for remedial action. We have noted the fact that the problem of meeting the threat to the security of Viet Nam, Cambodia, and Laos which now enjoy independence within the French Union is primarily the responsibility of France and the Governments and peoples of Indochina. The United States recognizes that the solution of the Indochina problem depends both upon the restoration of security and upon the development of genuine nationalism and that United States assistance can and should contribute to these major objectives. The United States Government, convinced that neither national independence nor democratic evolution exist in any area dominated. by Soviet imperialism, considers the situation to be such as to warrant its according economic aid and military equipment to the Associated States of Indochina and to France in order to assist them in restoring stability and permitting these states to pursue their peaceful and democratic development.

3

19. ECONOMIC AID PROGRAM: Note From the American Chargé d'Affaires at Saïgon to the Chiefs of State of Viet-Nam, Laos, and Cambodia, May 24, 1950 *

4

I have the honor to inform you that the Government of the United States has decided to initiate a program of economic aid to the States of Cambodia, Laos, and Vietnam. My Government has reached this decision in order to assist Cambodia, Laos, and Vietnam to restore stability and pursue their peaceful and democratic development.

With these purposes in mind, the United States Government is establishing, with headquarters in Saigon and associated with the United States Legation, a special economic mission to Cambodia, Laos, and Vietnam. This mission will have the responsibility of

Issued at Paris, where the Secretary of State was attending a Western Foreign Ministers meeting; Department of State Bulletin, May 22, 1950, p. 821. 2 Robert Schuman.

Edmund Gullion.

Department of State Bulletin, June 12, 1950, pp. 977-978. David Bruce, the American Ambassador at Paris, simultaneously delivered an identical note to the President of the French Union.

working with the Governments of Cambodia, Laos, and Vietnam and with the French High Commissioner in developing and carrying out a coordinated program of economic aid designed to assist the three countries in restoring their normal economic life. The members of the American economic mission will, at all times, be subject to the authority of the Government of the United States and will not become a part of the administrations of the Associated States.

The Government of the United States recognizes that this American assistance will be complementary to the effort made by the three Associated States and France, without any intention of substitution. American aid is designed to reinforce the joint effort of France and the Governments and peoples of Cambodia, Laos, and Vietnam, on whom rests the primary responsibility for the restoration of security and stability.

United States economic aid will be granted in accordance with separate bilateral agreements between each of the Associated States and the United States of America. The approval of these agreements will be subject to legal conventions existing between the Associated States and France. Initial economic aid operations, however, may begin prior to the conclusion of these agreements.

The United States Government is of the opinion that it would be desirable for the three governments and the French High Commissioner to reach agreement among themselves for the coordination of those matters relating to the aid program that are of common interest. The American economic mission will maintain contact with the three Associated States, with the French High Commissioner in Indochina and, if desired, with any body which may be set up by the Associated States and France in connection with the aid program.

Mr. Robert Blum has been appointed Chief of the United States special economic mission to Cambodia, Laos, and Vietnam.

Identical letters are being addressed today to the governments of Cambodia, Laos, Vietnam and the President of the French Union.

[Military Aid to France and Indochina: Statement by the Department of State regarding Franco-American Conversations, October 17, 1950; supra, pp. 1668-1669.]

20. THE MILITARY AID PROGRAM: Statement by the Departments of State and Defense, September 23, 1951 1

Discussions which have been going on for the past week between General of the Army, Jean de Lattre de Tassigny, French High Commissioner in Indochina and Commander in Chief of the French Union Forces in Indochina, and officials of the Departments of Defense and State were concluded September 22 in an atmosphere of cordiality and unity of purpose.

The participants were in complete agreement that the successful defense of Indochina is of great importance to the defense of all

1 Department of State Bulletin, Oct. 8, 1951, p. 570.