Foreign Relations of the United States, 1949, National Security Affairs, Foreign Economic Policy, Volume I

560.AL/2–1949: Telegram

The Secretary of State to the Embassy in the United Kingdom

secret

Washington, February 19, 1949—11 a. m.

588. For Douglas from Thorp.¹ Department desires importance US Govt attaches MFN for Japan be reemphasized Brit Govt at sufficiently high level gain reasonable assurance position Brit will take at Annecy (Depcirtel Feb 11). Failure Brit make sincere effort reach satisfactory formula, particularly if takes form seeking influence other countries against US position, wld be regarded as inconsistent our agreed commercial policy objectives.

Dept desires earliest possible determination nature modifications Ger protocol insisted on or assurances required. Assumes major obstacles lack yen exchange rate and fear Jap textile competition. Effort being made to estab exchange rate and shld succeed by early summer. If not estab by end Annecy Conf, might consider making effective application protocol hinge on subsequent estab. Suggest non-committal exploration this possibility.

As to fear competition, Dept recently informally approached by Brit Emb and Sir Raymond Street² re possible joint mission to Jap US–UK industry groups to discuss future Jap textile industry. (Memorandum being air mailed). In Emb opinion would Dept acquiescence such project to exhange views Tokyo leaning toward better understanding mutual problems, but not restrictive agreement, have significant bearing Brit attitude re MFN issue?

Dept believes if estab exchange rate will remove substance Brit opposition, opposition other grounds less likely gain support other Govts, your estimate present views Brit Govt desired earliest.³ [Thorp.]

Acheson

1. Lewis W. Douglas, Ambassador in the United Kingdom, and Willard L. Thorp, Assistant Secretary of State for Economic Affairs.
2. Sir Raymond Street, Chairman of the British Cotton Board.
3. Repeated to Tokyo (59), Canberra (31), Sydney (47), and Capetown (16). Repeated in substantially the same form on February 24 to Wellington, New Delhi, Karachi, and Colombo (560.AL/2–2449). Cables substantially similar in content but with variations and organized quite differently were sent to Paris (575) and Brussels (206) also on February 24 (560.AL/2–2449). In cables to Capetown (18) and Canberra (33) on March 2 these missions were instructed to approach the governments to which they were accredited “on a sufficiently high level” to indicate the importance of the issue to the United States (560.AL/2–1949, 560.AL/2–1549). This instruction had also been included in the aforementioned cables to Wellington, New Delhi, Karachi, and Colombo. Responses from the Commonwealth countries tended ot be noncommittal, although Australia was most explicit in its opposition to the U.S. proposal. It was understood that a Commonwealth Conference was to convene in London on March 31 to discuss issues prior to the opening of the conference at Annecy, and this was to include the question of most-favored-nation treatment for Japan. In the meantime the Department undertook to discuss with the U.S. Political Adviser in Tokyo possible revisions of the German protocol of September 1948, so as to formulate an instrument corresponding more closely to the Japanese situation (Department’s telegram 80, to Tokyo, March 7, 3 p. m., 560.AL/3–749).