411.6131/3–350
The Chargé in the Soviet Union (Barbour) to the Secretary of State
No. 233
Possible Abrogation of Commercial Agreement With USSR
The problem, as it is posed in the two memoranda transmitted with the Instruction under acknowledgement,1 is whether it is desirable for the United States to give notice of abrogation of the presently-existing commercial agreement with the Soviet Union. In these memoranda, it is argued that, with the failure of the USSR from 1941 onwards to specify the total dollar value of purchases it would make in the United States, the agreement has become disadvantageous from the American viewpoint. It is likewise asserted that the US, by restricting the types of materials which may be exported to the Soviet Union, itself is contravening the terms of the agreement, thereby laying itself open to charges of bad faith. Consequently, it is suggested in the memoranda that the US should abrogate the agreement in the near future, at the same time, for reasons which are given at some length, making an offer to negotiate a Treaty of Commerce and Navigation which would be broader in scope.
[Page 1118]Briefly, the existing agreement, first negotiated in 1939,2 on the Soviet side consisted of an engagement to purchase a fixed value of goods from the US annually. In return, the US agreed to extend to the Soviet Union Unconditional Most Favored Nation treatment, and not to place obstacles in the way of exports to the USSR. Inserted, however, was a saving clause, presumably subject to interpretation by the US alone, which would permit the US to restrict the export of articles broadly defined as “military supplies”. The agreement was renewed on an annual basis until July of 1942, at which time it was converted into an agreement of indefinite duration, subject only to abrogation upon six months notice given by either party.
The Embassy does not believe that a case has been made for American termination of the agreement at this time. Neither does it think that, even were abrogation desirable, the present international political temperature is favorable. More important, the proposal that the USSR be offered a Treaty of Commerce and Navigation seems from this post to be decidedly unwise, being susceptible to misinterpretation, and not compensated for by any obvious advantages.
The argument that, by abrogation, we would sidestep criticism by the USSR for violating the agreement does not seem wholly realistic in the light of systematic Soviet violation of existing international commitments. In the present climate of the “cold war”, it would seem rather academic to fear such charges: at a time when the US is being pictured in the Soviet and satellite press (and in official utterances) as an instigator of new conflicts, as a promoter of espionage and subornation, assertions of non-observance of a commercial agreement pale into insignificance.
Nations belonging to the Atlantic Pact, and other friendly countries, are fully aware of the necessity, justified by reasons of national defense, of limiting the export of strategic materials to the USSR: in fact, many of these countries have taken similar measures. In this regard, it is believed that there exist precedents for interpreting the term “military supplies” in a broad sense.
While the Embassy does not favor abrogation of the agreement at this time, even less reason is seen for coupling with abrogation an offer to negotiate a Treaty of Commerce and Navigation. At a time when, after strenuous efforts, the US has succeeded in persuading many European nations of the necessity of restricting the export of strategic supplies to the Soviet-bloc nations, the offer to negotiate another agreement, regardless of the explicitness of an accompanying statement of explanation, would arouse suspicion and alarm among our allies. Moreover, such an offer seems patently out of key with recent [Page 1119] strong statements of the President and the Secretary to the effect that, until the Soviets evidence willingness to abide by existing international engagements, we can see no object in negotiating new ones.
The Embassy feels also that, as one phase in the “cold war”, it may become desirable at some time in the future to abrogate the agreement. If this is done, it should be accompanied by maximum publicity, and should be viewed as an offensive step, rather than as one motivated by fear of Soviet criticism.
It is accordingly strongly recommended that no action be taken by the US in regard to this agreement pending further developments.
- Instruction No. 7, February 2, p. 1092. Only the first report transmitted with this instruction is printed in full.↩
- In regard to the conclusion of the first commercial agreement between the United States and the Soviet Union on July 13, 1935, see footnote 5, p. 1093. For the renewal on August 2, 1939, see Foreign Relations, The Soviet Union, 1933–1939, pp. 809–837. The renewal of August 4, 1937, is probably here intended.↩