560.AL/2–2448: Telegram
The Ambassador in the United Kingdom (Douglas) to the Secretary of State
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705. Delsec 1575. (1) In conversation today with Alphand Saltzman and Martin outlined alternative courses of action now being considered by us with respect to most-favored-nation treatment for occupied areas. In view shortness of time proceeded immediately to describe (1) provision for most-favored-nation treatment in bilateral agreements under ERP, (2) protocol which would commit occupying powers on one hand and other signatories to the protocol to apply provisions of GATT to occupied areas on reciprocal basis, and (3) protocol on same open-end basis merely committing signatories to apply most-favored-nation treatment to their trade with the occupied areas if they receive similar treatment from the occupied areas. Three exceptions for occupying powers listed in Clayton–Douglas memorandum were suggested as well as possible need for security exception similar to Article 94 for other signatories.
(2) Importance US attaches to recognition of principles involved was stressed.
(3) In answer to question indicated inability to say that if protocol adopted would not proceed with provision in bilateral agreements.
(4) Alphand expressed general French agreement with US objective as regards opening channels for German exports. Only real question was to what kind of Germany most-favored-nation treatment was to be granted. When usual French security fears had been allayed, there would be no problem, but until assurances in hand on these points French could not bind their hands. He suggested that in view this problem commitment clearly limited to occupation period would be materially less objectionable than one applicable to post-occupation period.
(5) Alphand also indicated that Chapter 3 provisions with respect to exemptions for economic development of war-devastated areas not acceptable “for the time being.” Reasons apparently political. This would rule out, he feared, protocol applying all provisions of GATT.
(6) He offered no criticisms of alternative 3 if limited to occupation period.
[Page 869](7) He indicated no interest in what was done with respect to Japan and Korea;
(8) Alphand said he would refer the matter to Paris. He understands fully need for prompt action.
(9) At another meeting with British on same subject content of proposed protocol explained to them, as well as possible alternative of simple undertaking to extend most-favored-nation treatment to occupied areas on basis of reciprocity. Importance of early decision stressed to British who, however, explained delay would result from consulting dominions on application protocol or other undertaking to Japan and Korea. Important therefore to know whether Department prepared to accept agreement confined to Germany only.
(10) Re Habana’s 232 to Department February 23, repeated to London unnumbered.
Bequest instructions whether we should press further for protocol. Martin and De Wilde1 do not think it feasible to ask French and British to take initiative in sponsoring protocol at Habana.
- John C. de Wilde, Acting Associate Chief, Division of Occupied Area Economic Affairs.↩