Office of the Historian

560.AL/3–348: Telegram

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

secret   us urgent
Habana, March 3, 1948—6 p. m.

270. For Douglas from Wilcox.

1.
Re point raised in paragraph 2 Embtel 8 March 3,1 Article 15 rearranged at suggestion UK delegate so appearance is less objectionable. Still permits UK to set up new preferences approved by two thirds vote of organization. Also permits new preferences approved by majority vote where “all parties belong to the same economic region.” US delegate persuaded Latins and others opposing UK position to accept following interpretive note for inclusion in text: “the organization need not interpret the term ‘economic region’ to require close geographical proximity if it is satisfied that a sufficient degree of economic integration exists between the countries concerned.” This leaves possibility ITO could decide parts of Empires belong to same economic region. Would be impossible to get Havana Conference of [or?] US Congress to accept more than this.
2.
Re point raised in paragraph 3 Embtel 8 and paragraph 3 Embtel 7 March 2 “simple provision” suggested by British cannot be considered. It would permit unlimited introduction and expansion of discrimination during transition period. We do not feel we could even submit such a provision to Congress let alone defend it. New Article 23 consistently with 1945 Anglo American proposals, parallels Fund transition period arrangement closely. It expands latitude for discrimination by two additional alternative texts in paragraph 1(c), Thompson-McCausland clearly understands how three bases can be used interchangeably in practice without need to define boundaries of each in advance. Without question, Havana text offers wider range of transitional discrimination than Washington proposals, London text, or Geneva text. Astonished at statement “Havana discussions indicate IMF will interpret narrowly”. Whole question of narrowness of Fund interpretations raised here was political attempt by French to extract some endorsement of their defiance of Fund on franc devaluation matter. How British can now adopt French position after spearheading Fund’s action on franc question is incomprehensible. Matter has no relevance to question of Article 23. On question section nine, we cannot see how new text of 23 would make any proposed section nine negotiations more difficult than either Geneva or London texts of same article.
3.
Re Embassy’s question on political risks:
a.
All delegates here now know British position Article 23 is remaining obstacle to completion conference. European delegates anxiously urging early action. Latin American delegates insisting US stand firm and offering unanimous support. Cannot accede UK position without alienating most other delegates.
b.
Washington, London and Geneva drafts preceded present draft of Article 23. Acceptance of fourth draft cannot be defended before Congress unless we can argue it is substantially same as original Washington draft. Acceptance UK position would destroy this argument” and make it impossible to defend Charter in U.S.
c.
Renewal trade agreements act now before Congress. If sort of article desired by UK were substituted for present provisions on nondiscrimination, with no quid pro quo, trade agreements legislation would be seriously endangered.

Repeated to Department for Clayton and Thorp from Wilcox as 270; sent London unnumbered. [Wilcox.]

Norweb
  1. Same as London’s telegram 836, supra.↩