560.AL/12–1545: Telegram
The Ambassador in the Soviet Union ( Harriman ) to the Secretary of State
4184. Re Department’s circular December 7, 5 p.m.23 and Deptel 2505, December 12, 3 p.m. With respect to invitation which I am directed to present to Soviet Government to participate in March preliminary meeting on trade and employment, I wish to make following observation:
1. Meeting is to be largely for purpose of negotiating reductions of tariffs. I explained in my 3597, October 19, why lowering of Soviet tariffs cannot be considered as a concession on Soviet part. Department now indicates Russia is to be asked to bind itself to purchase goods up to a certain minimum value from other parties to the agreement, to refrain from discrimination, and to make purchases and sales solely on basis of commercial considerations.
In view of this Embassy, these points are all unrealistic. In absence of any international agreement, Soviet purchases from foreign countries are going to be determined by a definite plan, which takes into account a number of factors such as amount of credits and foreign exchange available, need for specific commodities, et cetera. This plan, incidentally, is never revealed to outsiders. A Soviet commitment to purchase a minimum amount abroad could be considered a concession from our standpoint only if this amount were greater than what Soviets had planned anyway to purchase. But Soviets need imports badly, and their import plans will doubtless envisage maximum they can manage financially. To bind them to a limit no higher than that maximum would be to ask them for no concession at all. To bind them to a limit higher than that maximum would be of questionable wisdom. Soviet imports are going to outweigh actual commodity exports heavily for a long time to come. The problem is not to bring pressure to increase their orders abroad. The problem is to get them to contribute to world economy something even half way commensurate to what they expect to get out of it. To ask them to buy beyond their own estimated maximum will not solve this problem; it will only aggravate it.
[Page 1351]As to other points, there is no reason to suppose that Soviet Government would promise in good faith not to discriminate or to buy an sell solely on commercial considerations. Soviet leaders have never ceased to pride themselves on their foreign trade monopoly as a unique and superior political weapon in dealings with capitalist world, and I can assure Department that they have no serious intention of forfeiting any of advantages it gives them. Nor could they ever be held to such a pledge. Who could prove that allocation of certain orders in one country rather than another constituted “discrimination”? Soviet Government would hardly undertake any blanket obligation to give explanations to foreign governments as to motives of its allocation of orders, and even if it did it could easily find numerous arguments (some of which would be beyond our power to check or rebut) to prove that commercial considerations had been dominant.
The things we want from Russia on economic lines are not these. Of much greater importance to us and to cause of international economic collaboration would be a Russian willingness—not yet evidenced—to join with us in trying to solve Europe’s desperate food and supply problems on a non-political basis; to do something toward economic rehabilitation of Balkan countries which have now been driven literally to brink of ruin by Soviet policies; and to cease pursuing special economic monopolies and other advantages in eastern and central Europe through secret agreements negotiated under the shadow of political intimidation and deliberately concealed from Russia’s major Allies.
Department may rest assured that no favorable answer will be forthcoming to this invitation until after present political talks24 and possibly not for weeks thereafter. In addition, “proposals” on which this invitation is based have not yet reached this mission. We will, therefore, await further instructions before extending invitation.
2. I strongly recommend that the invitation be phrased in such a way as to indicate to Russians what will be expected of them. As it stands, particularly with the oral comment Department has suggested, they would enter March talks with firm impression that all they would be asked to do would be to make tariff concessions in return for similar concessions on part of other countries. It would be unfortunate for them to go into talks with this understanding and then to discover that they alone, of all those present, were to be expected to undertake special obligations for minimum purchases from other countries. Russians are peculiarly sensitive about matters of agenda. Their representatives have little latitude in negotiation in best of circumstances, and when faced with unexpected changes in agenda [Page 1352] they are usually obliged to insist on long delays while they get new instructions.