Foreign Relations of the United States, 1950, Central and Eastern Europe; The Soviet Union, Volume IV

450.6031/4–2850: Telegram

The Secretary of State to the Embassy in the United Kingdom ¹

top secret   priority

Washington, April 28, 1950—7 p. m.

Tosec 36.² 1. Commerce Dept has submitted memo to NSC raising basic issues of East-West trade policy.³ NSC will discuss problem on May 4 with ECA participating.

2. Commerce memo directed generally toward forcing tough line in 1–B negots, including sanctions involving withholding of ERP and MDAP assistance. It includes fol specific recommendations: (a) US shld make unequivocal effort to convince countries of Western Europe that they shld bring their control of exports, for security purposes, under basis as restrictive as are currently employed by US regardless of trade losses which might be incurred; (b) negots to achieve this objective shld proceed at highest level including presentation by US in FM mtg; (c) US exports of strategic items to Western Europe, including those under MDAP and ECA, shld be screened for East-West trade implications and that info developed, where relevant, shld be used to convince countries of Western Europe to adopt security controls parallel to those of US. In some instances, this may require delay of US exports of a strategic item to Western European country where that country wld not agree to security controls over that or related items; (d) that NSC give recognition to injustice of export restrictions on Amer business which are not being applied to Western European competitors, even though reasons for restriction are equally valid.

3. We propose to emphasize fol in our position: (a) that ECA and State as negotiating agencies, acting through OSR, up to point of takeover and State, since it has assumed full responsibility, have made and will continue to make strong effort to obtain parallel action by countries of Western Europe. This effort to date has had good measure of success with achievement of substantial agreement on embargo list, progress on transshipment and establishment of machinery to handle problems on multilateral basis. We will press forward vigorously on 1–B negots, major outstanding problem, but questions of negotiating tactics must be left to responsible negotiating agency; (b) with respect to withholding of exports of MDAP and ECA items to Western Europe in order to obtain parallel action, this is question of best negotiating technique to persuade other govts to accept an agreed US position. It is our view that best negotiating approach to use with our partners in the NATO is to appeal to the common security interests of the North Atlantic area rather than to threaten or to carry out a denial of essential mil or econ assistance. If cooperation of Europeans is unwilling, enforcement of controls will be negligent and ineffective; (c) Secy intends to explore with Brit and Fr FonMin and with NAT Council all aspects of cold war, including in genl terms essentiality of joint security restrictions on trade with the Soviet bloc. He does not intend, however, to supersede or undercut negots which are now being pressed vigorously in Paris through Consultative Group and Coordinating Comite and directly with key countries on this subject; (d) in view of much greater importance East-West trade to Western Europe than US and significance to success of ERP it is essential to maintain at this time long-estabd principle that US controls may have to be more restrictive than Western European; (e) Dept believes that changes in cold war and in European recovery picture since NSC last reviewed problem of East-West trade controls may justify new appraisal of US policy in this field and suggests that NSC direct its staff to initiate necessary factual studies which will be required to make this appraisal effective. Data required include basis for current appraisal of importance of East-West trade to European recovery, impact of controls on EE, Soviet intentions with respect to trade, reaction other govts after full discussion to US 1–B program, etc.

4. Your views urgently requested on above in light your discussions this subject with Brit? Wld like views Emb Paris also and they may wish discuss para 3 (b) with OSR.

Acheson

1. This message was repeated to Paris as 1898.
2. The use of the Tosec series indicator here indicates that this telegram was directed to the United States Delegation which was in London for a series of preliminary meetings with British and French officials, April 24–May 5, in preparation for the forthcoming Tripartite (U.S.-U.K.-French) Foreign Ministers Meetings, May 11–13. For documentation on those meetings, see vol. iii, pp. 828 ff.
3. See Secretary of Commerce Sawyer’s letter of April 25 to National Security Council Executive Secretary Lay and the memorandum enclosed thereto, p. 83.