Foreign Relations of the United States, 1948, General; the United Nations, Volume I, Part 2

560.AL/3–1148: Telegram

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

secret   us urgent
niact

Habana, March 11, 1948—11 p. m.

308. For Clayton and Brown from Wilcox.

1. USDel prepared draft article 23 on basis proposal mytel 278 to Department (5 to London, March 4), accepted by President, Board Of Trade (London’s 11 to Habana, March 5¹) on conditions accepted by USDel (mytel 6 of March 5 to London²). Despite assurance by American Embassy (London 13, March 9 to Habana³) Holmes has never admitted knowledge of Embassy’s agreement with President BOT (March 5) and still professes to lack authority to negotiate. At his urgent request, USDel agreed postponement Working Party from Wednesday to Thursday this week. Today he requested indefinite postponement Working Party meeting until British Government could take matter up again “in Washington”. USDel insisted on Working Party meeting and Holmes prevented action by filibuster.

2. Only objection Holmes has raised to USDel draft based on Embassy’s March 5 agreement with President BOT follows: Under proposal, country can elect either Habana or Geneva rules for its transition period. Under either option length of a country’s transition period would be determined by IMF. Period in controversy relates only to possible time between March 1952 and end of a country’s transition period. During this interval, scope of permissible discrimination under Habana option would be determined by IMF, CEM [sic] and scope under Geneva option would be determined by ITO. British delegation calls this “dual control” by IMF and ITO, and claims British Government will not accept it. Asks instead removal of all control over scope of discrimination from Geneva option. This would give country electing Geneva option far greater latitude for discrimination than countries electing Habana option and would be completely unacceptable to continental countries and indefensible in US. Is important that two options be evenly balanced.

3. Only reasonable point in British criticism was following: IMF control over scope of discrimination from March 1952 to end of transition period under Habana option involved post-examination. ITO control for this purpose in this period under Geneva option involved prior approval. Australians suggested changing latter Geneva provision to abandon prior approval and accept post-examination completely paralleling procedure IMF. Prior approval was great achievement Geneva but USDel agreed this proposal as final extreme concession to British position solely to achieve immediate complete agreement and terminate negotiations. Holmes now says UK will not even accept this.

4. Conference now at stage where further delay perilous. All other articles through sub-committees. Most other articles through main committees. Have reached semi-final or final conference decisions on all other major issues. Remaining work of routine character. Article 23 still in Working Party; has not even reached sub-committee. Holmes now proposes Working Party suspend operations for indefinite period. Such delay would prevent conclusion of conference before Easter, necessitate four-day recess, throw conclusion conference into April, overlap with Bogotá Conference. Seriously question whether we can hold 58 delegates in Habana beyond March 24. Danger is conference would go to pieces without conclusion.

5. Point nominally at issue would not seem to justify UK tactics. Believe UK purpose may be to use supposed desire of US to complete conference and get charter as means of extracting commitment for modification of Section 9 of loan agreement. UK points out loan agreement referred to future multilateral agreement and contends text accepted here would supersede provisions Section 9.

6. Following telephone conversations with Brown Thursday afternoon, have informed Working Party am authorized by US Government to state US will not negotiate further on Article 23 either in London or in Washington, but only in Habana with all delegates concerned participating. Canadians and Australians consider our position on substance entirely reasonable but reluctant to oppose UK request for further delays. Have offered to ask their governments to cable London supporting US position. USDel fears however delay would enable British Government to put pressure on dominions and on continentals in opposite direction. If sabotage continues USDel is considering circulating petition to discharge sub-committee and Working Party and bring question before full committee of conference. Such a petition might have unanimous Latin American support.

Repeated to London for information as 9. [Wilcox.]

Norweb

1. Same as telegram 890 from London, p. 887.
2. Wilcox in telegram 286 from Habana, March 5, not printed, and repeated to London as 6, accepted the three conditions proposed by Board of Trade President Wilson (560.AL/3–548).
3. Chargé Gallman in telegram 933, March 9, not printed, repeated to Habana as 13, reported that after the new text of Article 23 was received in London, instructions were sent to the United Kingdom delegation in Habana. “Delay accounted for by necessity Cabinet decision which will be taken Thursday. BOT states nothing to worry about.” (560.AL/3–948)