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

501.BD Europe/10–3149: Telegram

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

confidential

Geneva, October 31, 1949—2 p. m.

1222. Noce 626. References: Noce 554, 564, and 598 of May 30, June 21 and August 24, respectively.¹

1. ECE Trade Committee session failed last May because USSR was unwilling to agree any procedure for exchanging information on which east-west trade negotiations could be based. On August 9, Myrdal gave Arutiunian memo in effect requesting Soviet Government to suggest appropriate procedure. At same time, he advised USDel, he would not reconvene Trade Committee without reasonable assurance of successful session.²

2. In private conversation with Myrdal during October 3–6, Agriculture Committee session Soviet delegate reported to have indicated willingness to see practical work in field of east-west trade initiated within ECE. Apparently said they were prepared export a wide range of commodities, including grains, provided assurance given that proceeds of their sales could be used to procure non-military items they desire from western Europe. Soviet delegate claimed his oral statement constituted reply to Myrdal’s August 9 memo.

3. In aide-mémoire of October 28, presented to USSR Minister in Bern, Myrdal has rejected foregoing oral statement as basis for renewing negotiations. Suggest, however, that expansion east-west trade might be achieved through multilateral negotiations within ECE Trade Committee along following lines:

(a) Relatively long-term purchase agreements by WE for cereals and possibly other supplies from EE frame don lines of international wheat agreements;

(b) Commitment by WE that proceeds of EE sales could be used for purchase of goods on lists to be agreed upon;

(c) Flexible payment provisions including possibility of arrangements whereby export surpluses earned in one country could be used for purchases in another.

4. Myrdal’s aide-mémoire asks whether this type of approach might lead to useful results and volunteers visit Moscow if further discussion considered desirable. Expresses hope USSR reply will provide basis for executive secretariat formally approaching other governments.³

5. Asher bringing copy Myrdal’s aide-mémoire to Washington. No immediate US action required. Procedure outlined in paragraph 3 contains nothing basically new. Secretariat seems to feel, however, that USSR may really desire reopen east-west trade discussions in EGE. Cite fact that Arutiunian invited Myrdal’s August 9 memo and that USSR Agriculture delegate took initiative of volunteering information in paragraph 2 above. Equally possible in our view that USSR aware that secretariat and all participant blame it for failure of Trade Committee, seeking opportunity to transfer blame rather than promote trade. In other words, may simply want be in position to say at fifth commission session, “we informed Executive Secretariat our interest in expanding east-west trade through ECE, responsibility for failure rests elsewhere.” USSR may also be working toward bloc trading arrangements with west.

6. To help evaluate USSR motives, USDel would be interested in (a) recent information concerning so-called non military items USSR delegate may have had in mind, and (b) learning whether EE agricultural situation such that surpluses of grains, feedstuffs, etc., not anticipated last May now available for export.

Sent Department 1222, repeated Paris Torep 378. Department pass Moscow 19.

Troutman

1. None printed.
2. See telegram 997, Noce 593, August 25, from Geneva, p. 138.
3. Telegram 1234, Noce 629, November 3, from Geneva, not printed, reported that Myrdal had sent an aide-mémoire, dated November 2, to all members of the Committee on the Development of Trade of the Economic Commission for Europe. The aide-mémoire was the same as the one described here, except for the omission of the references to Myrdal’s private conversations with Arutyunyan and his August memorandum to Arutyunyan (501.BD Europe/11–349). For the text of the November 2 aide-mémoire, see Appendix IV of the Report to the Fifth Session of the Economic Commission for Europe, by the Executive Secretary, UN doe. E/ECE/114, Rev. 1, April 12, 1950.