'File 73/7 II (D 22) Status of Koweit [Kuwait] - Baghdad railway, Anglo Turkish negotiations' [‎25r] (51/540)

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{Received on the 19th February 191.2 icith Political Secretary's letter No. 5,
dated the 2nd February 1912.)
Board of Trade,
(Commercial Department)
Gwydyr house,
Whitehall,
London, S.W.,
10th January 1912.
C. 95.
(1591)
Immediate and Confidential.
Sir,
ibuliviUj
I am directed by the Board of Trade to acknowledge the receipt of your
letter (No. 57043), with, its enclosures, relative to a proposal to replace the
present ad valorem system of Customs duties in Turkey by a specific tariff,
and also to a proposal that the Baghdad Hail way Company should be allowed
to construct Customs buildings and exploit bonded warehouses at Baghdad and
Basrah.
In reply I am to say as regards the first proposal that the Board think that
His Majesty's Government need not object in principle to the substitution of a
specific for an ad, valorem tariff if all the other Powers concerned should be
in agreement on the subject. Such a substitution might, conceivably, in some
cases prove of advantage to British exporters who are sometimes subjected to unfair
competition by exporters from other countries in the shape of fraudulent
declarations of value. Any detailed proposals in this direction would of course
have to be submitted to very careful scrutiny—not only as regards the valua
tions but also as regards the classifications adopted—from the point of view of
their probable effect on British interests. Particular attention would naturally
have to be paid to the schedule of duties on cotton goods. The necessity of
adopting a simple and intelligible classification of duties, which will reduce to
a minimum the opportunities for Customs disputes, is also a matter of vital
importance to trade. The fact that the proposed specific tariff is being
elaborated by Sir R. Crawford affords some presumption that these matters
will not be overlooked.
I am to add that as soon as a copy of the draft tariff on which Sir R.
Crawford has been engaged can be confidentially obtained, the Board will be
prepared to examine it carefully from the above points of view.
With reference, however, to that part of Sir R. Crawford's letter enclosed
in your letter under reply, which suggests that such a tariff may be used in
the forthcoming negotiations between Turkey and Austria Hungary, the Board
presume that His Majesty's Government would only consent to take part in
any negotiations for the imposition of a specific tariff as part of a general
scheme for the conclusion of new commercial treaties by Turkey to which the
new tariff would be scheduled. In the event of these treaties being denounced,
the existing ad valorem tariff would of course automatically revive. In any
new Anglo-Turkish treaty it might perhaps be desirable to stipulate for the
periodical revision of the tariff as a consequence of changes in prices.
As regards the other proposal, viz., for the construction of a Customs house
and of bonded warehouses at Baghdad by the Baghdad Railway Company it
appears premature to make any arrangements for this purpose until the Company
which will work the line south of Baghdad has been formed Inasmuch as the
lines south and north of Baghdad respectively will be forked by different
companies, the Board would prefer that the construction of Customs buildings
should be the joint undertaking of the two companies rather than that of the
existing Baghdad Railway Company alone. As regards the proposed buildings