Foreign Relations of the United States, 1946, Eastern Europe, The Soviet Union, Volume VI

560.AL/6–2046: Airgram

The Secretary of State to the Ambassador in the United Kingdom ( Harriman )

secret

Washington , July 23, 1946.

A–1038. For Hawkins.⁴⁷ Following is information on discussions referred to by Czechs as outlined in paragraph 5 of your airgram A–712 of June 20, 1946.⁴⁸

(1) On May 29, Mladek, Kunosi and Hanč discussed with officers of Dept prerequisites to an Eximbank loan. Among prerequisites discussed was the question of Czechoslovakia providing the US with info concerning its international economic relations similar in scope and character to that normally made public by the US. Kunosi said the Czech Govt would be willing to enter into a general undertaking to supply economic info on an agreed basis to be specified in a separate exchange of letters.

(2) Article 3 of draft interim commercial arrangement proposed to Czechs June 29, 1945 included substantially provisions of Article VIII of 1938 trade agreement.⁴⁹ This would require public notice and non-discriminatory administration of quantitative import or export regulations. In loan discussions here Czechs have expressed inability to assume this obligation under current conditions (it cannot strictly be called “new and unusual”) as well as Article 5 of draft interim commercial arrangement providing unconditional mfn treatment respecting exchange control. They point out necessity for bilateral trade agreements and problem of resulting inconvertible currency balances, while subscribing to ultimate objective of multilateralism.

(3) Article 6 of interim commercial arrangement provided that Govt monopolies or enterprises shall be influenced solely by commercial considerations in their operations. While this was also covered in old trade agreement Article IX, Czechs were concerned over possible implications for film monopoly.

In view of Czech position outlined during loan negotiations here, further discussion of matters included in old trade agreement or draft interim commercial arrangement will be postponed pending more appropriate multilateral discussions at conference on world trade and employment. Czechs here have, however, agreed subject to approval in Prague to include in exchange of notes accompanying loan the following: (1) affirmation of transitional nature of bilateral barter agreements and undertaking to seek to augment earnings in convertible currencies attributable to Czechoslovak exports; (2) pledge of nondiscriminatory administration of import controls during transitional period subject to limitations imposed by Czech holdings of inconvertible currencies; (3) substance of Article 6 above on commercial considerations.

Byrnes

47. Harry C. Hawkins. Counselor of Embassy for Economic Affairs at London and Vice Chairman of the United States delegation to the First Meeting of the Preparatory Committee of the United Nations International Conference on Trade and Employment.
48. Not printed; it reported the views of Czechoslovak officials with regard to American proposals to be considered at the forthcoming United Nations Trade and Employment Conference in London (560.AL/6–2046). For documentation on the participation by the United States in that conference, see vol. i .
49. The draft interim commercial arrangement proposed by the United States was contained in the aide-mémoire of June 29, 1945, to the Czechoslovak Embassy, Foreign Relations, 1945, vol. iv, p. 543. For documentation relative to the reciprocal trade agreement between the United States and Czechoslovakia, signed March 7, 1938, see ibid., 1938, vol. ii, pp. 223 ff.