501.BD Europe/11–1049: Telegram
The Ambassador in the Soviet Union (Kirk) to the Secretary of State
2806. In opinion Emb Sov E–W trade tactics for immediate future (Noce 626, Oct 311) will continue be formulated and depend two basic considerations; 1st, trend western economic health and cooperation; 2nd Sov ability further postpone-minimize vitally necessary acquisitions, including numerous non-military categories from west. (Paris for Harriman.)
We believe new Sov overtures for trade expansion proceed primarily from inabilities under 2 above further complicated by foreign exchange shortages. At same time Emb confident Sov tactics will follow pattern filling minimum requirements in way best designed frustrate cooperation West, complicate recent econ difficulties arising from devaluation, growing WE marketing problems and October strikes U.S. Certainly, hoped for development Western splits plus improved terms and conditions EW trade a prime objective most recent Sov “capitalist crisis” propaganda barrage.
[Page 172]USSR claims 1949 grain harvest above pre-war and 2.1 mil tons over 1948 but whether or not Sov and bloc enjoyed unusually good 1949 harvest, agricultural commodities immediately after luxury items will be chosen medium acquisition foreign exchange ahead of industrial raw materials with higher strategic significance. Hence importance US sponsored special schemes provide WE American hemispheres agric surpluses on favored terms.
“Cool reaction” majority NAT countries to proposal treat export controls in framework pact (infotel Nov 3, 19492) naturally discouraging on surface. On other hand Emb recently impressed and encouraged awareness exhibited both govt and private members Belg trade del presently in Moscow, “serious threat growing Sov-Satellite trade monopoly.” Consensus ther independent conclusions closely parallel Emb estimate (memo encl Embdes 558 Oct 13) i.e. Wests ability cope this increased Sov threat fundamentally dependent speed-strength WEs’ coordination its econ power for offensive-defensive application. Most remarkable feature their reaction was expressed willingness accept immediate financial sacrifices and difficulties to further this goal.
Thus importance suggested stressing commercial security no less than military security in slated Paris trade control talks Nov 14 as element best designed stimulate further integration economic efforts comparable progress achieved cooperation joint military defense.
For depts info, British colleagues here who studied Embdes 558 indicate they have reported general agreement contents their govt, further that UK Govt might anticipate increased US pressure for stricter controls as initial Wash. reaction but that UKs willingness offer further cooperation these lines naturally conditioned by their sense of priority necessity feeding selves.
Paris for Harriman.4