840.50 Recovery/7–1248: Telegram
The Secretary of State to the Legation in Switzerland
1001. From Dept and ECA. Reur 848, July 2, rptd Paris for Harriman as 47, and urtel 895, July 12, sent Paris as Torep l.1 Swiss reluctance to report through OEEC import requirements from US inconsistent with basic concept of ERP. Since first enunciation in Sec State’s Harvard address, ERP has been based on premise of joint European effort involving maximum mutual aid and greatest use of European resources, with US aid as supplement for relatively brief period. Same concept underlies CEEC Report of 1947 and Convention signed Apr, to both of which Swiss were parties.
Traditional and strongly held policy of Swiss neutrality is recognized. However US makes distinction between political neutrality and economic collaboration with OEEC countries. Greatest possible Swiss participation in ERP is desirable not only because of contribution Swiss can make to recovery but also to further larger and longer term objective of closer economic integration of Western Europe. Swiss participation in ERP activities to date, including membership on executive comm of OEEC, and stated intention to take part in intra-European activities OEEC, evidence continued adherence to purposes of a joint recovery program with which their reluctance to channel US requirements through OEEC appears to us to be inconsistent. In our view distinction drawn by Swiss between “intra-European” and other aspects of program is a false one since all aspects ERP are obviously closely interrelated. Supplies from US to France for example have direct bearing on problems of intra-European trade. Whole concept of program will be undermined if individual countries begin “participating” in only those aspects they regard as having most direct bearing on own economies.
US aid includes not only financial assistance but also a preference for participating countries in allocation and licensing of exports of scarce items. Such aid is stated in Sec. 115 (b) of EC Act to result from multilateral pledges and joint recovery programming of participating countries. We doubt that Swiss really wish to force us into a position of having to determine whether Swiss requirements should be treated differently from those of other ERP countries or, in the extreme, to determine whether insistence on independent action constitutes such a departure from idea of a joint program as to disqualify Swiss as participating country under Sec 103(a) of EC Act with attendant loss of licensing preference under Sec 112(g).
[Page 471]Above is our reaction to Swiss position. We believe however that principal approach to Swiss should come from other ERP countries presumably through OEEC. Accordingly suggest Harriman, if he agrees, discuss matter informally with OEEC officials and advise Bern, Dept and ECA as to course of action he believes most effective to change Swiss viewpoint.
Legation is authorized, however, if Swiss raise subject again, to express substance of above. [State and ECA.]
- Neither printed.↩