411.656/8–851: Telegram

The Chargé in Italy ( Thompson ) to the Secretary of State

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670. Note verbale dated July 31 received from FonOff protesting approval by mixed Congressional comm of Anderson [Andresen] amendment to Defense Act to suspend or limit US imports fats, oils, cheese, etc. Note states in part:

  • FonOff regrets having to take note that such decision would hit two typical Italian products, i.e. olive oil and cheese, and points out that, even disregarding serious economic and foreign exchange consequences which would result for Italy, such provision would seem to conflict with action undertaken by US Govt to favor economic recovery of certain countries within framework of ERP Aid Program.1
  • “This amendment, if effectively applied, would also seem to conflict with provisions Art 11 of GATT and would annul recently negotiated tariff reductions whereby Italy conceded analogous reductions in favor American products”.

Needless to say, we believe Ital protest more than justified. Would be most difficult to explain to Italian cheese and oil producers, who now faced with loss of ⅓ and ½ their respective export markets, how exclusion their products assists US def production.

Although we are confident actual implementation of amendment by Secy Agriculture will be as liberal as legislation permits and that amendment may eventually be repealed, this Congressional repudiation of principles embodied in GATT and ERP will inevitably undermine our future bargaining position on commercial policy matters and increase skepticism re sincerity US position. Except for one financial paper, Ital press has not yet realized implications, but story obviously grist for Commie mill.

Thompson
  1. For documentation on this subject, see volume IV.