394.31/11–651

The Chargé in Belgium (Millard) to the Secretary of State

confidential

No. 548

Ref: Dept’s Telegrams 518, Oct 15 and 525 Oct 16, and Embassy Telegrams 536 Oct 17 and 631 Nov 5, 1951.

Subject: Foreign Office note re Belgian dollar import restrictions.

In accordance with the Department’s telegram No. 525 dated October 16, the Embassy presented to the Foreign Office the memorandum of October 17 (enclosure No. 1) based on the text of the Department’s telegram No. 518 dated October 15, 1951. The representations made in Brussels and at the GATT Conference in Geneva were, therefore, closely coordinated.

The Foreign Office replied to this memorandum by a note dated October 31, 1951 (received in the Embassy November 5, 1951), the text of which is given in enclosure No. 2. The substance of this reply was communicated to the Department in Embassy telegram No. 631 dated November 5. It will be noted that the Belgian Government considered the recommendations made by the Council of OEEC on July 6, 1951, as concurring in its view that all measures at its disposal should be adopted to redress its position in the EPU (obviously one of the means which would contribute to this objective is the restriction of dollar imports). The Belgian Government considers that this measure qualifies for waiver of the non-discriminatory obligations under the GATT by a broad interpretation of Article XV. The only statement in the note which has not been made before by the Belgian Government is the assurance that the Belgian and Luxembourg Governments “count on reducing the term of application (of the restrictive measures in question) to the strictly indispensable minimum.” The suggestion made [Page 1504]in the Embassy memorandum that “a substantial contribution by Belgium to other NATO countries” be considered as an element in the solution of the EPU problem is only answered by the statement that “Belgium is already fulfilling, at the present time, all of its obligations in the framework of NATO.”

The Embassy finds the attitudes expressed in this note entirely consistent with the position taken by responsible Belgian Government officials in all discussions since the measure was first announced.

For the Chargé d’Affaires, a.i.
Patten D. Allen

Commercial Attaché

Enclosure 1

The Embassy in Belgium to the Belgian Ministry of Foreign Affairs

Belgian Import RestrictionsEPU Problem

In confirmation of the United States Government position regarding the subject restrictions as conveyed to the Belgian Delegation by the United States Delegation at the meeting of the contracting parties to the General Agreement on Tariffs and Trade being held currently in Geneva, the following memorandum is respectfully submitted:

The United States Government considers that the justification for the quantitative restrictions on imports from the United States and other dollar areas recently imposed by the Belgian Government must rest on dollar balance-of-payment grounds as set forth in Article XII of the General Agreement on Tariffs and Trade.

On the basis of the facts thus far known to the United States, the Belgian situation would not justify the imposition of such quantitative restrictions on dollar balance-of-payment grounds. In any case, the United States Government considers it important that consultations with the contracting parties under Article XII should begin at once.

The United States Government recognizes the difficulty of solving the Belgian EPU problem and also recognizes that a satisfactory solution to that problem will undoubtedly require a reduction of the Belgian surplus to be settled through the EPU. However, it does not regard dollar import restrictions by the Belgian Government as an essential element in the solution of the EPU problem, on the basis of the United States Government’s understanding of the present circumstances. This conclusion will be the basis of the United States position in any connection in which this problem may be raised. This position with regard to dollar import restrictions will, however, leave Belgium with a number of other methods of dealing with the EPU problem. [Page 1505]For example, the United States Government would not contemplate opposing the measures announced by the Belgian Government to restrict exports to EPU countries directly, provided such measures were in accordance with international obligations. The United States Government hopes that another of the elements in the solution to the EPU problem will be a substantial contribution by Belgium to other NATO countries as a part of its defense effort.

Enclosure 2

The Belgian Ministry of Foreign Affairs to the Embassy in Belgium

Le Ministère des Affaires Etrangères et du Commerce Extérieur présente ses compliments à l’Ambassade des Etats-Unis d’Amérique et à l’honneur de lui faire part de ce qui suit:

Le Mémorandum de l’Ambassade du 17 octobre 1951 relatif aux réstrictions à l’importation récemment établies dan l’Union Economique belgo-luxembourgeoise en rélation avec le problème posé par la situation actuelle à l’intérieur de l’Union Européenne des Paiements a retenu toute l’attention du Gouvernement belge. Celui-ci ne peut partager l’opinion exprimée dans le Mémorandum d’après laquelle les restrictions en question ne sont pas de nature à constituer un élément essentiel de la solution du problème qui se pose. Le Gouvernement belge estime que, conformément à la recommandation du Conseil de l’O.E.C.E. du 6 juillet 1951, il ne peut négliger aucun des moyens à sa disposition pour obtenir une attenénuation du déséquilibre entre la position créditrice en Europe de l’U.E.B.L. et la position débitrice de celle-ci dans la zone dollar. Ce n’est d’ailleurs qu’en présence d’une nécessité impérieuse que les gouvernements luxembourgeois et belge se sont décidés à prendre les mésures restrictives en question dont ils comptent réduire la durée d’application au strict minimum indispensable.

De l’avis du Gouvernement belge, les restrictions imposées à l’achat de certains produits payables en dollars, étant uniquement déterminées par des considérations de change et la nécessité de résorber la créance de l’U.E.B.L. sur l’U.E.P., rentrent dans la catégorie des mésures prévues par l’article XV de l’Accord Général sur les Tarifs Douaniers et le Commerce.

Le Gouvernement belge espère que les Parties Contractantes à l’Accord Général comprendront ce point de vue.

En ce qui concerne le désir exprimé par le Gouvernement des Etats-Unis de voir la Belgique faciliter la solution du problème de l’E.P.U. par une contribution substantielle aux autres pays NATO, comme part de son effort de défense, il faut souligner que la Belgique [Page 1506]remplit déjà, à l’heure actuelle, toutes ses obligations dans le cadre NATO.