Foreign Relations of the United States, 1950, Western Europe, Volume III

740.5/12–1650: Telegram

The Secretary of State to the United States Deputy Representative on the North Atlantic Council (Spofford), at London¹

confidential
niact

Washington, December 16, 1950—9 a. m.

Todep 171. Eyes only for Spofford.

1. This is joint State–ECA message. Harriman concurs. Subj is OEEC–NATO relations.

2. In our judgment, increased emphasis rearmament makes imperative fundamental reexamination and development clear-cut US position this subj. As you recall, May North Atlantic Council discussion possible activation NAT economic machinery resulted interim decision pursue alternative of informal US and Canada association with OEEC for gen purposes economic cooperation North America plus Western Eur. In practice, however, because of increasing importance NATO functions and increasing dominance rearmament consideration in NATO countries economic policies and programs, need has been felt for expanding work in economic sphere on basis NATO membership only. Certain incidental factors have contributed to this development, including strong feeling some Brit circles desirability emphasizing NATO at expense OEEC because US full and equal partner in former while Brit among “suppliants” in latter. Creation of NATO working group of twelve in Paris² on economic distribution of burden reflects effort bridge growing gap; however we have impression many persons concerned, especially OEEC personnel, are unclear respective future responsibilities this group and any London group in economic field. Problem intensified by new proposal creating permanent group financial and economic advisers to NAT deps (Depto 305).³

3. Consequence these developments, as reflected in conversations here with OEEC policy group, and confirmed by Wood and others recent conversations individual OEEC delegation and secretariat members, appears to be increasing sense, justified or not, of demoralization in OEEC. We feel present position increasingly unstable and undesirable. De facto situation, is piecemeal building up of NATO economic functions and tendency toward corresponding withering of OEEC. We increasingly doubt feasibility co-existence as effective instruments in two separate places of two North Atlantic economic bodies with largely parallel membership and overlapping responsibilities of uncertain definition. We also see no hope sound solution without clear and concerted US position and leadership.

4. We believe gradual withering of OEEC undesirable on several counts. US has made important investment in prestige this organization, culminating particularly in arrangements informal association and active participation in full range its activities. OEEC is symbol and instrument of major US Congressional and Administration policy to foster EUR economic integration. OEEC is only international organization containing Western Ger as full and equal member, which sits in inner circle exec comite. Swedish and Swiss participation affords important opportunity maintaining their effective cooperation with West and tacit support NATO program. Maintenance formal cooperative ties with other non-NATO OEEC members, i. e., Ireland, Austria, Greece and Turkey also desirable. Moreover, OEEC as going concern with cooperative habits and effectively organized technical secretariat offers important values very difficult and time-consuming to recreate. At same time, NATO requires mom closely knit economic collaboration its members on issues directly related common mil effort. Expedient NATO subcommittees in Paris geographically separated from deps and DPB seems not to offer genuinely effective solution.

5. We therefore conclude that considerable measure of de facto consolidation is indispensable to satisfactory working relationship, a prerequisite to which is location in same city. This wld permit NATO economic work to be carried on as part of NATO organization in NATO committees, composed of persons who also serve as members of OEEC delegations and in many cases on corresponding OEEC committees with wider membership. Arrangements wld also be made for joint use selected members OEEC Secretariat after appropriate security clearance. This arrangement would (a) permit variable division of functions between two organizations subj ready modification as circumstances dictate; (b) solve increasing concern many delegations problems staffing two separate economic organizations; and (c) automatically avoid duplication and frictions arising therefrom. In absence such arrangement, these will be growing problems particularly if NATO takes on major program technical industry work. This consolidation wld greatly simplify US staffing and concerting of positions and efforts US Eur regional organizations. This arrangement might also facilitate development of more or less informal arrangements for handling difficult but probably urgent problem of bringing Ger in on NATO economic work. Recognize that these arrangements shld in due course be superseded by still more fundamental long-term resolution of organizational problems in North Atlantic area.

6. We recognize obvious difficulties move either OEEC to London or NATO to Paris. Believe latter technically easier in view present relative size organization. Perhaps also some advantage closer proximity to SHAPE; unable assess prestige considerations affecting either UK or Fr attitudes this point, although some injured feelings doubtless wld result. A move to London might present difficult political problem for Swedes and Swiss, strengthening hand of neutralist elements in these countries which might oppose closer arrangements between OEEC and NATO. Transfer to London might have some merits strengthening UK interest as second leading NATO partner and problem of Fr feelings might be eased in view establishment SHAPE in Fr. Either wld be feasible from US viewpoint.

7. Obviously desirable consider carefully any commitments with respect organization economic work in OEEC or NATO from now on in light of fact that proposal of kind described above is under serious consideration US Govt. Once US has clear position, and pending international agreement thereon, believe US shld endeavor shape decisions in NATO and OEEC so as move toward accomplishment US plans.

8. Possible but undesirable alternatives to proposals in paras 5 and 6 appear to be either: (a) attempt place all NATO economic work in Paris, with similar relations to OEEC but great disadvantage geographical separation from deps and DPB,—we believe that in fact this attempt wld prove vain—or (b) deliberate and conscious building up NATO economic organization with formal agreement OEEC, including transfer portion OEEC secretariat, leaving Paris OEEC as residual body handling EPU, intra-Eur trade policy, and some gen collaboration with non-NATO members. This wld have major disadvantage absence Ger from proximity to NATO work and generally wld sacrifice most OEEC assets mentioned para 4 above. This arrangement wld also involve an unworkable split in economic work which wld prove very confusing (e. g., operations of EPU are, of course, not purely civilian affair but closely related to conduct of Eur transfers of components of mil production).

9. Also involved here, for decision before long, is desirability fuller and more formal US and Canadian participation in OEEC. Problem appears to be how far it is useful and possible for US to go in this direction. OEEC delegation has raised this question urgently, and matter is being restudied here in light of changed conditions.

10. We regard clear US position this issue matter of urgency. Cld we have soonest your respective views and, if you can find early opportunity personal discussion together, your joint views.

Acheson

1. Sent also to Paris, eyes only for Katz (Torep 10551).
2. Prior reference to this group is in Todep 63, October 17, and Depto 116, October 20, neither printed.
3. Telegram Depto 305 from London, December 9, not printed.