Memorandum of Conversation, by the Deputy Director, Office of European Affairs (Thompson)


In the course of a conversation on another matter, Mr. Allen1 said that the Foreign Office was actively considering their Yugoslav policy and that the matter had been discussed on a ministerial level and that a telegram had been sent to Belgrade asking their Ambassador for his comments. Their present line of thinking was that in order not to involve Tito in difficulties with his own Politburo, they should be careful not to make any direct approach. He said that the Ambassador might intimate to Tito that in accordance with Article 10 of the Trade and Payments Agreement concluded last December, the British Government was now prepared to consider a long-term trade agreement.2

I replied that we were also actively considering our policy and that within the next day or two, I hoped we would be in a position to give him some specific conclusions. I said that I believed our thinking coincided with theirs in that we believed we should assist Tito in maintaining his independence of Moscow and in overcoming the effects of the Soviet blockade by allowing him to obtain his vital import needs. I said we were thinking of facilitating the procurement by Yugoslavia of 1 B items and possibly, by mutual agreement, of some 1 A items, but I made it clear that no definite decision had been taken. I also pointed out that I believed we were in agreement that we should not make any specific political demands of Yugoslavia at this time.

I said that speaking personally I was somewhat disturbed at the suggestion that the British might conclude a long-term economic agreement. It seemed to me important to liberalize trade with Yugoslavia but to hold over Tito’s head the possibility that this could be restricted at any time if he did not behave. While not asking any political concessions, it would be clear to him that the less his policies [Page 871] opposed ours, for example, in Greece, the more likely this trade would be continued.

Mr. Allen said that this was not necessarily incompatible with a long-term trade agreement which might merely set targets which would have to be supplemented by specific short-term agreements. He said he would endeavor to obtain further information from the Foreign Office on this point.

Llewellyn E. Thompson
  1. Dennis Allen, Counselor of the British Embassy.
  2. Telegram 158, February 16, from Belgrade, not printed, reported that the British Embassy in Belgrade had been instructed by London to approach the Yugoslav Government regarding the beginning of formal negotiations on February 28 for a long-term trade agreement. If the Yugoslavs agreed, a British trade delegation would come to Belgrade to conduct the negotiations (611.60H31/2–1649).