Foreign Relations of the United States, 1949, Eastern Europe; The Soviet Union, Volume V

501.BD Europe/2–2249: Telegram

The Consul at Geneva (Troutman) to the Secretary of State

confidential

Geneva, February 22, 1949—8 a. m.

194. Noce 467. Supplementing Noce 451 and 432.¹

1. First session ECE trade committee adjourned Saturday night after plenary had considered reports three ad hoc working parties created to discuss respectively (a) short term trade and payments problems; (b) long term trade expansion problems; (c) other problems.² First two WP’s dealt with parts I and II of secretariat paper IDT/23; third with part III and with EE allegations that US export license Poland is discriminatory obstacle to expansion east-west trade. Each WP included representation all participating countries.

2. Re trade and payments mechanisms. WP 1 discussion business-like but unexciting. On basis WP report, committee passed relatively innocuous resolution requesting secretariat make further studies certain technical problems raised in its report. USDel dubious whether anything consequential will result but considers important that effort be made to explore all possibilities of constructive action within committee’s present reference terms.

3. WP 2 discussions provided best test willingness of participating countries supply basic trade data but test inconclusive. French proposal, supported by OEEC countries (and privately by Poland), outlined procedure as follows: (a) secretariat in consultation with governments to prepare short list of raw materials and essential commodities whose production and export could be increased; (b) countries willing produce additional export these items would advise maximum production on basis full use existing facilities and supplementary production and resultant increase in exports if additional means of production were imported, specifying nature and value of required articles; (c) countries desiring additional imports these items to advise amount thereof; (d) data received to be circulated and then examined at next session and in proper cases forwarded to technical committees.

Czech proposal supported by USSR, requested secretariat report on (a) commodities in short supply in Europe and being imported from overseas, (b) possibilities expanding European production thereof, (c) obstacles to such expansion, (d) steps required by governments to achieve expansion. Czech proposal concentrated attention on increased production without linking it to increased exports; opened door to rediscussion US licensing policy as obstacle and too premature requests for international financing. Proposal furthermore did not commit governments supply any data. Myrdal³ made strong statement re fact that secretariat studies useless unless governments committed to supplying essential data.

Upshot of long discussion was unanimous adoption compromise resolution requesting secretariat “in consultation with governments concerned” (1) to prepare brief list commodities in short supply in Europe, (2) to determine possibilities of expanding production and export these commodities and need for equipment and other goods in order to achieve such expansion of production and export.

4. WP 3 devoted chiefly to discussion EE charges against US export license policy. Czechoslovakia introduced resolution asking secretariat to investigate policy, including range and total value of commodities involved, economic effects of policy and “extent of differential application of US system, in light of theory and practice of international commercial policy.” In opposing Czech proposal Western countries took line that this a political subject already discussed in other forums including GA and time and energy of secretariat and delegates would be better spend on other matters. USDel reply repeated oft-stated reasons for US export license control. Said that if proponents of Czech resolution seriously interested in discrimination they would look closer to home. Then mentioned various types of discrimination practised by USSR and peoples democracies and concluded that absence any mention such forms of discrimination meant resolution introduced for political purposes only. No decision on resolution reached in WP.

After plenary when Czech resolution taken up Netherlands delegate moved for closure of debate. USSR argued speciously that debate not yet opened: therefore could not be closed. Chairman effected compromise that only two should be heard on resolution, one for and one against. USSR spoke for, USDel spoke against, both employing same arguments used in WP. Debate then closed, resolution defeated 11–6.

5. Committee never did succeed in electing permanent chairman. Filippi⁴ chaired WP 1, Lychowski⁵ WP 2, Myrdal WP 3, and plenary sessions. Trade committee will meet again in May about time of fourth ECE session chiefly to continue work initiated by WP 2.

6. Comment:

a. This first time USSR has participated in regular session of any ECE technical committee. Was definitely less obstreperous than at previous Geneva meetings with result that committee still in business and widespread feeling that meeting was successful though positive accomplishments limited. USSR and satellites stressed importance of increased east-west trade to welfare of Europe as whole and need for development EE. Also strongly favored extension bilateral agreements. EE obviously interested in securing equipment, credits, development goods. May simply be laying groundwork for renewed attempt at next committee meeting to secure separate economic development committee. Numerous anti-US attacks at trade meeting but confined primarily to specific allegations that export licensing policy interferes with orderly development east-west trade and hurts both western and eastern Europe.

b. OEEC countries, particularly France and Sweden, better prepared and better led than at earlier meetings. Result to OEEC alertness was that US could assume background role except when directly attacked.

c. While public support of OEEC countries for US on discrimination resolution was unwavering, there are strong private misgivings about wisdom of our policy as understood in Europe, particularly breadth of restrictive lists.

d. US concurred against its better judgment in creation of these WP’s one to do business and one for blowing off steam. Technique, however, was successful and WP 1 and 2 as well as plenary discussions were relevant and on fairly high level.

e. Porter can supply additional information on arrival US. Fuller report coming by airgram.⁶

Sent Department 194, repeated Paris Torep 215.

Troutman

1. Neither printed.
2. The first session of the Economic Commission for Europe’s Committee on the Development of Trade was held in Geneva, February 14–19, 1949. A seven-page report on the session was transmitted to the Department of State in airgram A–42, March 17, from Geneva, not printed (501.BD Europe/8–1749); Paul R. Porter, United States Deputy Representative to the Economic Commission for Europe, headed the United States Delegation to the session. The decision to establish the Committee on the Development of Trade had been made by the Ad Hoc Committee on Industrial Development and Trade of the Economic Commission for Europe in the course of a session held in Geneva, September 27–October 5, 1948. For an account of the Ad Hoc Committee’s session, see telegram 1363, October 6, from Geneva, and footnote 1, Foreign Relations, 1948, vol. iv, p. 570.
3. Gunnar Karl Myrdal, Executive Secretary of the Economic Commission for Europe as well as of the Committee on the Development of Trade.
4. Jean Filippi, French Representative to the Economic Commission for Europe and to the Committee on the Development of Trade.
5. Dr. Tadeusz Lychowski, Director of the Economic Department of the Polish Foreign Ministry; Polish Representative to the Economic Commission for Europe and to the Committee on the Development of Trade.
6. See footnote 2, above.