394.31/10–1551: Telegram

The Secretary of State to the United States ( GATT ) Delegation 1

confidential
priority
niact

Gatt 94. 1. Del authorized proceed in Belg dol restrictions case along fol paras.

2. Del shld consult fully with Can on approach in GATT. However, since Can interests in Belg EPU problem distinguishable in some respects from our own, prefer Can put item on agenda and prefer Del present US case separately.

3. In plenary discussion, Del shld make fol pts: (a) Justification for QR’s must rest on dol balance-of-payment grounds as set out Art XII; (b) on basis facts so far known to US, Belg situation does not [Page 1495]justify QR’s on such grounds; (c) in any case, consultations with CP’s under Art XII shld begin at once.

4. FYI, we anticipate that in ordinary course consultations will take some time, and that some elements of Belg problem, such as extent of US offshore buying in Belg and Belg contribution to mutual defense efforts through extension financial assistance to rest of Eur, may have crystallized somewhat in interim.

5. You shld inform Belgs privately that we recognize difficulty in solving Belg EPU problem and that solution will undoubtedly require reduction of surplus to be settled through EPU. You shld make clear that we do not regard dollar import restrictions as an essential element in solution EPU problem on basis of our understanding of present circumstances, and that this conclusion will be basis our position in any forum in which issue becomes germane. Position we are taking on dollar import restrictions leaves Belg with number of other methods dealing with EPU problem, e.g., measures announced by Belg to restrict EPU exports directly, provided such measures are properly conditioned (see Gatt 88, Oct 11). We hope one of elements in solution will be substantial contribution by Belg to other NATO countries as part of its defense effort.

6. This is joint ECA–State cable. Commerce, Treasury, FRB, Ex-Im Bank concur.

Acheson
  1. Repeated for information to Brussels as 518, Paris as 2231, and Ottawa as 103.