394.31/9–1051: Telegram
The Ambassador in Italy (Dunn) to the Secretary of State
1158. ReDeptel 1103, Sept 6. Discussion held this morning (postponed from Sept 7) with Grazzi, DirGen Econ Affairs, FonOff, on proposed US suspension of GATT relations with Czecho. Some slight progress achieved, with aid of material reftel. At start of discussion Grazzi said Italy cld not support US proposal but wld abstain. At conclusion he said Italy wld reserve its decision until question comes up at Geneva and in meantime wld consider all aspects of question and watch positions adopted by other Western European countries.
Emb rep explained US viewpoint along lines Dept’s 1103 and cirtels 199 and 94.1 Most helpful point was US intention not to withdraw from Italy or other concessions negotiated with Czecho. Favorable outlook for UK support also made distinct impression. Reservation of decision by Benelux countries was helpful, though in case of France FonOff had possibly later information Fr Govt wld not support US proposal. Dept’s comments on hats, cheese, and almonds were helpful. Emb rep also pointed out possibilities for Italy’s increasing exports to US in certain lines, partially replacing Czech trade.
Altho FonOff of course realizes supporting US wld not require Italy follow similar course, its major concern is that affirmative support of US proposal wld be taken by Czecho as unfriendly polit act and wld probably lead to some Czech retaliation. Italy concerned not only for GATT relations and trade with Czecho, but also for substantial number Ital residents Czecho and sizeable Ital insurance and other fin activities Czecho. Hence FonOff’s marked preoccupation with positions [Page 1404] to be taken by other Western European countries. If UK, Benelux countries, and especially France shld all support US position, Italy wld certainly also support it. They think retaliation most feared if Italy shld be one of limited number European countries supporting US.
Way left open for further discussions up to middle Oct. (FonOff thought Czech question wld come up late in session at Geneva.) Dept please furnish continuing info on attitude other Western European countries, together with comments where appropriate.
FonOff very little interested in formal aspects US proposal (Depcirtel 199), but slightly prefers “suspended” instead of “terminating”.
On informal, personal basis working level official afterwards asked why US had chosen action under Article XXV where two thirds and majority of those present are required, instead of Article XXI where US cld act unilaterally, or Article XXIII, where although procedures are slow simple majority wld suffice. While these alternatives may be entirely inappropriate, they wld make Italy’s position easier.