The Acting Secretary of State to the Embassy in Canada 1
139. Re Belg import restrictions on dol goods:
1. Dept is recommending to NAC Staff on Mon that US approach Belg once more and request removal these restrictions and that, if approach unsuccessful, issue be put to IMF and GATT.2
2. Dept doc on subject notes fol pts.
- Dol restrictions are very slight help in reducing Belg intra-Eur surplus. Also will require Belgians pay higher prices for imports of commodities affected.
- Belgs are not faced now or in immed future with serious threat to dol reserves.
- Belg action violates commitments in, GATT and principles IMF. Precedent created by Belg restrictions, which rest on justification other than a threat to monetary reserves, is extremely dangerous for any trade liberalization plans, whether global or regional in scope.
- Belg case creates substantial risks which threaten continuation existing liberal US import policies. These policies already under heavy pressure. Case of this kind, which is not defensible on balance-of-payment grounds, may well provide basis for further actions by Congress limiting opportunities for foreign countries to export to US, such as cheese restrictions. This is threat to defense efforts Western Eur countries and to cooperative efforts Atlantic Community.
3. We understand Belgs themselves are closely divided on question of wisdom retaining dollar restrictions and we are hopeful, therefore, that by raising issue as in para 1 above, we may achieve their removal.
4. Dept believes US action as indicated to secure removal Belg import restrictions cannot be long delayed without considerable risk. Risks are (a) creation vested interests in Belg for retention restrictions, (b) possibility adverse Congressional reactions when it reconvenes, (c) loss of support of countries which have heretofore been chief supporters US liberal trade policies, particularly Canada.