560.AL/1–2748: Telegram

The Ambassador in Cuba (Norweb) to the Secretary of State

secret

110. For Brown from Wilcox.

1.
Efforts being made by European countries to remove all limitations on discrimination by amending article 23 charter (article 14 GATT) as follows:
(a)
In paragraphs 1(a) and 1(b) Czecho would change “substantial and widespread disequilibrium” to cover any case of disequilibrium between two countries.
(b)
In paragraph (b) (I) Norway would delete rule against paying substantially higher prices. Belgium would delete requirement that excess must be progressively reduced.
(c)
France, Belgium and Czechoslovakia have attacked paragraph (B) (II). Belgium would extend “gold or convertible currency” to include any “accumulated” currency. France would limit requirement of selling for convertible currency to amount of exports toward currency country in normal period. Czechoslovakia would eliminate paragraph entirely.
(d)
Norway would declare all sales under long term contracts nondiscriminatory if contracts not discriminatory on date when signed.
(e)
France would postpone effective date of rules against discrimination to January 1949 or later date to be fixed by ITO (as in GATT). UK would postpone date to 1952.
(f)
In paragraph 3(a) Denmark would delete date 1952 and let ITO fix date later.
2.
Amendments referred to working party consisting originally of UK, France, Norway, Belgium, Czechoslovakia, and US, with later addition of Canada, Australia. US delegate originally considered refusing to serve on working party but decided refusal might be misinterpreted. Bronz,1 under instructions, has declined consider making any changes in text. Holmes2 and Philip repeatedly urging me to discuss modifications. Have refused to do so on grounds:
(a)
Article is second drafted by European countries in own interest; [Page 836] (b) Article merely contemplates gradual return to multilateral ism;
(c)
Purpose of seeking further modification apparently is to tie European trade up in permanent bilateral barter deals;
(d)
Broader escape for Europe would weaken resistance to numerous other escapes proposed by non-European countries here;
(e)
Further recession by US would be unacceptable American opinion;
(f)
Would undercut arguments by Marshall and Clayton in support of Marshall plan; and
(g)
Would provide argument for foes of Marshall plan and imperil its enactment.
3.
Possible concessions by US would be:
(a)
Addition of paragraph along lines of article 14 paragraph six of GATT as proposed in French amendment. UK would probably settle for this;
(b)
Substitute London and New York text3 for Geneva text. France and Czechoslovakia desire this;
(c)
Reword (b) (II) to retain as much as possible of substance. Would involve difficult negotiation but might ultimately get draft acceptable to US and French.
4.
French or British may approach Department insisting further latitude discrimination and arguing free hand bilateralism essential to Marshall plan. Important Department keep delegation fully informed and give no indication willingness make any concessions without advance warning to delegation.
5.
Please send all available ammunition for use in discussions here, including relevant Congressional questions addressed to Marshall Plan witnesses.
6.
Please discuss with Fields, Gunter,4 Luthringer and explain position to Clayton who is returning Habana Wednesday February 3. Would appreciate advice concerning strategy to be followed pending his return. Will continue refuse consider any real concession unless instructed otherwise. [Wilcox.]
Norweb
  1. George Bronz, Special Assistant to the General Counsel, U.S. Treasury Department, Technical Advisor to the U.S. Delegation.
  2. Stephen L. Holmes, Second Secretary, British Board of Trade, Member of the British Delegation.
  3. Reference here is to the ITO Charter text prepared at the First Session of the Preparatory Committee of the United Nations Conference on Trade and Employment, held in London from October 15 to November 26, 1946, and to that prepared by the Drafting Committee, meeting in New York from January 20 to February 25, 1947. See footnote 2, p. 802.
  4. Morris Fields, Chief, Commercial Policy Section, Office of International Finance, U.S. Treasury Department; and John Gunter, U.S. Treasury Department.