Foreign Relations of the United States, 1969–1976, Volume XXIX, Eastern Europe; Eastern Mediterranean, 1969–1972

1. Telegram From the Department of State to Certain Diplomatic and Consular Posts¹

Washington, September 12, 1968, 0109Z.

236888. Subject: U.S. Economic Response to Invasion of Czechoslovakia.

1. This message outlines Departmentʼs thinking and decisions taken thus far on U.S. economic policy toward Warsaw Five as well as consideration of possible economic help we might offer Romania.

2. Request action addressees make high-level approaches to Fonoffs to present U.S. ideas in this field and obtain Fonoffs reactions. In discussing U.S. approach Embs should make clear that U.S. has no intention to resort to economic sanctions or return to cold war measures. Our approach is to emphasize: (a) the need for keeping our guard up and maintaining the possibility of controlling economic transactions with the Communist countries; (b) avoiding extension of economic benefits to invading countries which western countries do not give each other; and (c) avoiding gestures of good will, friendship, and business-as-usual during current period.

3. Our review covered unilateral measures U.S. could take and the possibility for multilateral action. U.S. has decided for the time being on following measures: (a) discourage important new business by U.S. firms with the invaders, principally the USSR, (b) turn down or delay some major pending cases of high visibility for U.S. export licenses, and (c) delay proposed arrangements for verification and payment of annuities in USSR.

4. Embs should describe scope of U.S. unilateral measures, and suggest possibility of similar unilateral action by Europeans, e.g. discouraging important new business and delaying some major pending new exports. Moreover, in view of greater economic involvement of western Europeans with invading countries, we believe it appropriate that they consider, on multilateral basis, greater restraint on credits to invading countries, such as temporary suspension of new long-term credits, limiting credits to Berne Union guidelines, and non-subsidization of interest payments.

Rusk

1. Source: National Archives, RG 59, Central Files 1967–69, POL 27–1 COMBLOC–CZECH. Confidential. Drafted by Ruth H. Phillips and James Stromayer (EUR/RPE) on September 11; cleared by Jacob M. Myerson (EUR/RPM), William A. Root (EWT), Raymond E. Lisle (EUR/EE), Thomas O. Enders (E/IMA), Adolph Dubs (EUR/SOV), and Anthony M. Solomon (E); and approved by Leddy. Also sent to Bonn, London, Paris, Rome, and The Hague. Repeated to Budapest, Moscow, Prague, Sofia, Warsaw, Bucharest, Zurich, USNATO, and Paris for OECD.