893.50 Recovery/4–1448: Telegram

The Secretary of State to the Ambassador in China (Stuart)

694. Depts draft master Bilateral Agreement ERP44 countries and separate draft for China have been circulated for comment other [Page 513] Govt agencies concerned, particularly ECA. It had been hoped that drafts agreed upon within US Govt could be presented for[eig]n Govts early next week, but possible changes desired by other agencies probably will delay such action. Time factor and shortage Dept personnel dictate that negotiation European agreements be conducted here for most part, although actual signing contemplated in European capitals. For reasons mentioned Deptel 519 Apr 8, Dept still believes negotiation China agreement should take place Nanking. Draft China agreement follows genl pattern ERP draft, with appropriate modifications and additions to take account special circumstances China. Text being telegraphed separately45 and Embs comments requested soonest.

Dept regards period negotiation as providing best opportunity press for informal Chinese undertakings regarding internal measures of self-help by conducting discussions corollary to actual negotiation text agreement as indicated Deptel 519 Apr 8. Request Embs views desirability initiate corollary discussions promptly as first stage negotiation agreement. Discussions could be explained on ground US desire learn intentions ChiGovt regarding genl undertakings along lines Chang Chun’s Jan 28 statement and specific measures in implementation thereof in order assist in drafting bilateral agreement. Text agreement could then be presented when ready after significant emphasis had been given necessity internal reforms. Corollary discussions should of course be continued during course subsequent negotiation.

It is necessary that agreement be signed by July 3 to enable continuity aid. However this consideration should not interfere with placement proper emphasis on internal reform and with obtaining appropriate undertakings in agreement in this regard. Must agreement be ratified by Legislative Yuan? If so how much time should be allowed for such ratification?

Depts comments Embtel 669 Apr 14 and suggestions other topics to be covered in corollary discussions will follow. Would appreciate suggestions from Emb regarding measures primarily of internal-reform character to be emphasized in corollary discussions as requested Deptel 519 Apr 8.

  1. European Recovery Program.
  2. Telegram No. 695, May 7, 7 p.m., not printed.