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

ECA Telegram Files, Lot W–130, Paris Repto: Telegram

The Special Representative in Europe for the Economic Cooperation Administration (Harriman) to the Administrator of the Economic Cooperation Administration (Hoffman)

secret

Paris, October 15, 1949—6 p. m.

Subject: East-west trade

Repto 6884. Re Washington Repto 6445, Repto 6590, and Repto 6847.¹

1. Final plenary meeting referred to Repto 6847 held evening October 14. Alphand, chairman, presented report committee of experts who had reviewed on basis new Anglo-French list (a) controls actually in force in each country, (b) definitions of items. Copies report committee of experts and new Anglo-French list with our analysis being airpouched.² Our preliminary estimate reveals that, not including electronic items still under consideration, Anglo-French list now approximately 48 items short of US 1–A list. If French agree embargo items, which they now agree to control quantitatively because of trade agreement commitments, shortfall would be reduced to 35 items. British report French ideas re electronics items under discussion are promising.

2. Following points arose this meeting:

a. British proposed another meeting experts in month’s time when governments would be prepared make statement of items they would be prepared control after study of Anglo-French list. Differences of opinion would then be mutually discussed. British suggested that future trade agreements should avoid inclusion items on Anglo-French list and countries should examine present trade agreements to see if Anglo-French items could be prohibited for export. British also suggested memorandum be prepared by each government on problem transshipment and re-export.

b. Italians re-emphasized their controls more extensive and in operation longer than those any other European country present and pressed for early discussion and adoption common list. Italians also raised question what areas are included in “Soviet orbit”, specifically referring to Soviet Zone–Austria, Finland and Yugoslavia.

c. Belgian representative repeated he had no authority commit government and did not believe present trade agreements should be violated in letter or spirit. He pressed for more time before start meeting to enable his government take matter under consideration.

d. Dutch representative informed his country had licensing procedure covering all exports but not prepared agree any list at this time. Pointed out that Philips Company privately using US 1–A list as guide for screening electronics exports to Soviet orbit. (British delegate suggested that Netherlands Government should take “more positive responsibility” for Philips exports.) Dutch representative insisted that present trade agreements be respected and also pressed for more time before next meeting of committee. He stated he could not commit his government to a date.

e. French chairman proposed) another meeting in a month. He defined France’s understanding of “countries in Soviet orbit” which roughly parallels US policy. He suggested pooling of information on individual countries exports to Finland and Yugoslavia. He raised matter of expanding meeting to include Germany, Swiss and Scandinavian countries.

f. US delegate expressed hope that Anglo-French list would not be considered maximum level of parallel action and agreed with French that other countries should be included in further meetings. We also pressed for further consideration of questions of transshipments, exports under present trade agreements, and possibly some sort permanent mutual consultative group to deal with questions arising from exports to Finland, Yugoslavia, etc.

g. Meeting agreed adopt French proposal to: (1) Bequest individual governments submit memorandum by November 7 on Anglo-French list items accepted for control and government’s position on those items not accepted; transshipment and re-export problem; present and future policy on implementation of present and future trade agreements; (2) hold another meeting of heads of delegations and experts November 14 in Paris to discuss memorandum and make further recommendations.

h. Question controls in West Germany not specifically discussed although French and other representatives privately indicated that he viewed status of security controls there with great concern.

After reiteration vital necessity to keep news of meeting secret, meeting adjourned in rather uninspired atmosphere.

In private conversations later, Swiss made point of telling us he thought his government was exercising controls in highly satisfactory manner but could not of course concert its actions with others. Belgians asked why east-west controls were handled by ECA instead of on top diplomatic level or under security arrangement of Atlantic Pact. Alphand stated his opinion US, UK, France would have exert greater effort secure parallel action and recommended handling within NAT,³ Italians emphasized increasing pressure to relax their present controls, particularly from industrialists. We indicated to Italians our disappointment at meeting and need for some countries to take courageous stand ahead of others to break vicious circle of each waiting for others to agree before taking comprehensive steps themselves.

3. Consensus of all US representatives present that, despite UK and French apparent earnestness, results meeting disappointing, amounting to little more than formalization of inadequate Anglo-French list without obtaining any immediate action by Belgium or Netherlands and with probable result that Italians may eventually backslide. We will send shortly recommendations on further course of action.

Sent Washington Repto 6884; repeated London Repto 908, Brussels Repto 415, The Hague Repto 472, Rome Repto 884; pouched Paris Repto 189.

Harriman

1. None of the messages under reference here is printed. Telegram Repto 6645, October 1, from Paris, not printed, reported on a meeting held in Paris on September 29 of the delegates to the Organization for European Economic Cooperation from France, the United Kingdom, Belgium, Luxembourg, the Netherlands, Italy, Switzerland, and Sweden. The delegate’s agreed to the convening of a meeting in Paris on October 12 of experts (subsequently called the Consultative Group) to review in detail those export items currently controlled by the countries represented and to seek agreement on a common list of commodities to be controlled by each country (ECA Telegram Files, Lot W–130, Paris Repto). Telegram 6847, October 13, from Paris, not printed, reported upon the early phases of the Paris meetings on East-West trade. French, British, Belgian, Dutch, and Italian representatives participated in the meetings, and Switzerland sent an observer. At the insistence of the British and Dutch, the United States also was invited to participate. Hervé Alphand, the Director of the Office of Economic, Financial, and Technical Affairs of the French Foreign Ministry served as chairman. At an introductory session, general statements were made by the various representatives. At a subsequent technical meeting, a new Anglo-French export control list (see footnote 2, below) was introduced. A final plenary meeting was scheduled (ECA Telegram Files, Lot W–130, Paris Repto).

   Sweden was not represented at these October meetings. Telegram 3858, September 19, from Paris, not printed, had earlier reported that a French Foreign Ministry official had confirmed the recent receipt of a Swedish note formally declining participation in East-West trade controls on the grounds of the traditional Swedish policy of neutrality and independence (640.6031/9–1949).

2. Translated copies of the report and the new Anglo-French list under reference here were transmitted to the Department of State as enclosures to despatch 914, October 18, from Paris, none printed. The despatch pointed out that the new list contained a number of items in addition to those included in the original Anglo-French list of February (640.6031/10–1849). Regarding that earlier list, see footnote 3 to telegram 496, February 5, from Paris, p. 78. Telegrams Repto 6962 and Repto 6963, October 21, from Paris, neither printed, presented detailed analyses of the new Anglo-French list. Based upon the list it appeared that, exclusive of precision instruments and electronics, approximately 25 American 1–A items were not currently in any form on a British embargo list and approximately 45 1–A items did not come under French embargo control (ECA Telegram Files, Lot W–130, Paris Repto).

3. Telegram 4349, October 18, from Paris, not printed, reported on a private talk with Alphand after the meetings described here:

   “(a) French were fully aware present approach through OEEC Representatives in Paris not successful, clear demonstration this situation was an objective of French sponsorship of current meetings.

   “(b) French pointed out that overall situation which prevailed during previous 15 months of negotiation had been changed by signature NAT and MAP and stated that ‘future action up to US.’ Alphand stressed need for most cautious handling if military considerations were to be invoked, and interjected thought that French would like to keep leadership in dealing with continental countries.” (640.6031/10–1849).