Eighteen years after the Louisiana Purchase was signed, France argued that the treaty granted her special trading privileges in the Port of New Orleans and any other port-of-entry within the Louisiana territory. The argument was over the clause "the Ships of France shall be treated upon the footing of the most favoured nations". Was France to be treated equal to any other most favored nation, or was France to be treated as the most favored nation.
In his 1821 State of the Union Address, President Monroe reported to Congress that there were regretfully some very serious differences in our commercial relationship with France. One of these was related to the Louisiana purchase signed 17 years earlier. When the Louisiana purchase was signed in 1803, it granted both France and Spain full and free access to the Port of New Orleans and all of the other ports within the ceded territory for a period of 12 years. The agreement was intended to encourage trade between the nations by granting French and Spanish ships the same rights and privileges as American ships, so long as they restricted their goods to those from their own country and/or colonies. In addition Article 8 also stated that "In future and for ever after the expiration of the twelve years", France was to be granted the privileges equal to that of any "most favored nation".
Article VIII
In future and for ever after the expiration of the twelve years, the Ships of France shall be treated upon the footing of the most favoured nations in the ports above mentioned.Now, 17 years later, France was trying to arguing what it meant to be "upon the footing of the most favored nations". France argued that the treaty granted that Ships of France should be be granted special treatment equal to Ships of the United States. This caught President Monroe by surprise. It was not his understanding the "most favored nations" clause in the treaty. Essentially, France was claiming that the their ships should not be subjected to any of the revenue laws and taxes that applied to any other foreign nations. Specifically, they did not want to be subject to any more duties on merchandise or tonnage than what was charged to the ships of the united States for now and forever.
But as Monroe argued, the treaty was clearly limited to making France equal not above that of any other most favored nations. It was not intended to give France special privileges. Instead, it only stated that the United States could not setup any trade agreements with other nations that would put France at a disadvantage. Simply put, France should be placed on equal footing with any most favored nation, but not above. What France was asking for, was not that of a "most favored nation", but she was asking for additional advantages not enjoyed by any other foreign nation. If the United States granted what France was asking, it would not only set hewr apart from any other nation, but on equal footing with American merchants. Perhaps even above that since it would grant to French ships all the same advantages as American ships, but without being subject to American laws. This just made no sense, and it was not fair.
Here are the words of President Monroe regarding this dispute from his 1821 State of the Union Address:
"It is my duty to state, as a cause of very great regret, that very serious differences have occurred in this negotiation respecting the construction of the 8th article of the treaty of 1803, by which Louisiana was ceded to the United States, and likewise respecting the seizure of the Apollo, in 1820, for a violation of our revenue laws. The claim of the Government of France has excited not less surprise than concern, because there does not appear to be a just foundation for it in either instance. By the 8th article of the treaty referred to it is stipulated that after the expiration of 12 years, during which time it was provided by the 7th or preceding article that the vessels of France and Spain should be admitted into the ports of the ceded territory without paying higher duties on merchandise or tonnage on the vessels than such as were paid by citizens of the United States, the ships of France should forever afterwards be placed on the footing of the most favored nation.The following year, France and the United States entered into a temporary treaty of commerce and navigation for two years, which established reciprocal agreement on French products brought into American ports and vice versa. Article 3 of this treaty specified that "no discriminatory duty shall be levied upon the production of the soil or industry of France, imported in French bottoms into the ports of the United States for transit or re-exportation, nor shall any duties be levied upon the productions of the soil or industry of the United States imported in vessels of the United States into the ports of France for transit or re-exportation. The treaty also set specific duties on items like Wine, Cotton and rice. The treaty was sent concluded in June of 1822, and sent to the Senate for ratification on December 4, 1822. The treaty had a mandatory period of two years, and would continue indefinitely until one party "should declare its intention to renounce it".
By the obvious construction of this article it is presumed that it was intended that no favor should be granted to any power in those ports to which France should not be forthwith entitled, nor should any accommodation be allowed to another power on conditions to which she would not also be entitled on the same conditions. Under this construction no favor or accommodation could be granted to any power to the prejudice of France. By allowing the equivalent allowed by those powers she would always stand in those ports on the footing of the most favored nation.
But if this article should be so construed as that France should enjoy, of right, and without paying the equivalent, all the advantages of such conditions as might be allowed to other powers in return for important concessions made by them, then the whole character of the stipulations would be changed. She would not be placed on the footing of the most favored nation, but on a footing held by no other nation. She would enjoy all advantages allowed to them in consideration of like advantages allowed to us, free from every and any condition whatever."
In Monroe's final state of the Union, he held up this treaty as one accomplishment which was part of a "systematic effort has been made to place our commerce with each power on a footing of perfect reciprocity".
"In adverting to our relations with foreign powers, which are always an object of the highest importance, I have to remark that of the subjects which have been brought into discussion with them during the present Administration some have been satisfactorily terminated, others have been suspended, to be resumed hereafter under circumstances more favorable to success, and others are still in negotiation, with the hope that they may be adjusted with mutual accommodation to the interests and to the satisfaction of the respective parties. It has been the invariable object of this Government to cherish the most friendly relations with every power, and on principles and conditions which might make them permanent. A systematic effort has been made to place our commerce with each power on a footing of perfect reciprocity, to settle with each in a spirit of candor and liberality all existing differences, and to anticipate and remove so far as it might be practicable all causes of future variance.
Four years after the convention was in effect, full reciprocal trade with France had been reached. According to th convention, the duties would be reduced by 25 percent each year until all discriminating duties have been removed. President John Quincy Adams was happy to announce that as of October 1826, the U.S. and France would have full reciprocal trade. French vessels carrying French produce would b received in US ports under the same terms as American ships, and vice versa. Unfortunately, Adam could not say the same about outstanding claims of American merchants against the French government. Many of those were not yet settled.It having been stipulated by the 7th article of the convention of navigation and commerce which was concluded on [1822-06-24], between the United States and France, that the said convention should continue in force for two years from the first of October of that year, and for an indefinite term afterwards, unless one of the parties should declare its intention to renounce it, in which event it should cease to operate at the end of 6 months from such declaration, and no such intention having been announced, the convention having been found advantageous to both parties, it has since remained, and still remains, in force."
"Our relations of commerce and navigation with France are, by the operation of the convention of 1822-06-24, with that nation, in a state of gradual and progressive improvement. Convinced by all our experience, no less than by the principles of fair and liberal reciprocity which the United States have constantly tendered to all the nations of the earth as the rule of commercial intercourse which they would universally prefer, that fair and equal competition is most conducive to the interests of both parties, the United States in the negotiation of that convention earnestly contended for a mutual renunciation of discriminating duties and charges in the ports of the two countries. Unable to obtain the immediate recognition of this principle in its full extent, after reducing the duties of discrimination so far as was found attainable it was agreed that at the expiration of two years from 1822-10-01, when the convention was to go into effect, unless a notice of 6 months on either side should be given to the other that the convention itself must terminate, those duties should be reduced 1/4, and that this reducation should be yearly repeated, until all discrimination should cease, while the convention itself should continue in force. By the effect of this stipulation 3/4 of the discriminating duties which had been levied by each party upon the vessels of the other in its ports have already been removed; and on the first of next October, should the convention be still in force, the remaining 1/4 will be discontinued. French vessels laden with French produce will be received in our ports on the same terms as our own, and ours in return will enjoy the same advantages in the ports of France.http://www.presidency.ucsb.edu/ws/index.php?pid=29463
By these approximations to an equality of duties and of charges not only has the commerce between the two countries prospered, but friendly dispositions have been on both sides encouraged and promoted. They will continue to be cherished and cultivated on the part of the United States. It would have been gratifying to have had it in my power to add that the claims upon the justice of the French Government, involving the property and the comfortable subsistence of many of our fellow citizens, and which have been so long and so earnestly urged, were in a more promising train of adjustment than at your last meeting; but their condition remains unaltered."
http://www.presidency.ucsb.edu/ws/index.php?pid=29466
http://www.presidency.ucsb.edu/ws/index.php?pid=29468
http://tcc.export.gov/Trade_Agreements/All_Trade_Agreements/exp_005341.asp
http://avalon.law.yale.edu/19th_century/louis1.asp
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