Paris Economy Pact

Paris Economy Pact was an international economic agreement reached at the Paris Economic Conference held in June 1916 in Paris, France. The meeting, held at the height of World War I, included representatives of the Allied Powers: Great Britain, France, Italy, and Russia.

The pact was intended to isolate the Central Powers, the German Empire, the Austrian-Hungarian Empire, the Ottoman Empire and the Kingdom of Bulgaria. The Allied Powers envisioned isolating the Central Powers through trade sanctions after the war. A standing body, the Comité Permanent International d'Action Économique, based in Paris, was established to monitor the implementation of the pact.

This pact was of great concern to the United States government, led by the Wilson Administration, which saw the continued fragmentation of Europe to be a risk for continued conflict. U.S. Secretary of State Robert Lansing asked the staff of the U.S. Embassy in Paris to monitor the proceedings (the United States, having not yet entered the war, was not part of the Allied Powers). The issue of central concern to the United States was that this pact included schemes for subsidization and government ownership of manufacturing enterprises and the division of European markets for the pact participants.

The outcome of the 1916 Paris Economic Conference foreshadowed the conflict between the United States and the Allied Powers during the Paris Peace Conference.

The past concern of the U.S. government with this Pact are fossilized even today in the United States Code, in Title 19, Section 1332(c), which gives the U.S. International Trade Commission the "power to investigate the Paris Economy Pact and similar organizations and arrangements in Europe."