Foreign Relations of the United States, 1951, National Security Affairs; Foreign Economic Policy, Volume I

ECA Message Files, FRC Accession 53A278, Paris Torep File: Telegram

The Acting Administrator of the Economic Cooperation Administration (Bissell) to the Embassy in France

confidential

Washington, December 7, 1951—12:33 p. m.

Reference—(a) Torep 8875, rptd Brussels Ecato 630, Rome Ecato 1373¹
(b) Secrep Paris 40, rptd Brussels Deptel 752, Rome 2404, Ottawa 139²
(c) Toeca 555 Brussels, rptd Paris Torep 580, Rome 34, Ottawa 2³
(d) Repto 5871, rptd Brussels Repto 425, Rome Repto 1034.⁴

Torep 9266. Pass Harriman. This cable has been cleared with State.

A. Request ur comments soonest on State Dept draft of US note (quoted below) to Belg Govt concerning recently imposed dol import restrictions.

B. On basis NAC Staff mtg Nov 26, all agencies here are agreed on essentiality making clear US opposition to restrictions not justified on B/P grounds. Reasons for this view are set forth at length in draft note and reftel (b).

C. We also anxious make representations to Belgs with minimum prejudice to negotiations over Belg military effort and Belg assistance to other Eur countries. While Belgs may claim direct relationship between two, we do not believe US can condone technique of assisting Eur countries which relies on “creating vacuum” within Belg by unnecessarily restricting dol imports. Only in possible future event of true dol B/P difficulties, emerging as result Belg military effort and assistance to other countries or other factors, wld we regard dol import restrictions as justified. Believe this view is in long-run as beneficial to Belgs as to US, on basis arguments set forth in draft note.

D. State cabling separately to Brussels requesting detailed info, as yet only partially available, on import restrictions.

E. Draft Note follows:

• “(1) Reps of US have, on various occasions, expressed concern this Govt with respect import restrictions recently imposed by Belg Govt against goods from US and other hard currency countries. In view continued application these restrictions, US wishes once more present its views concerning maintenance these restrictions and urge again their prompt removal.
• (2) US recognizes seriousness Belg intra-Eur surplus problem and importance achieving early and satisfactory solution to problem. However, U.S. believes dol import restrictions will not make any significant contribution toward solving problem and, if anything, are likely increase some of Belg’s present economic difficulties. If there are any possible benefits be derived these measures, it appears to this Govt that they will be more than offset by their adverse effect on achievement of common long-run objectives of Belg and US.
• (3) Belg Reps have stated Belg is not faced now, nor in immediate future, with serious threat to its dol and gold reserves. In the view of US, the Belg action in applying discriminatory import restrictions under these circumstances is inconsistent with Belg’s obligations under GATT and a contravention of principles of Articles of Agreement of IMF. The abandonment of principle of permitting import restrictions only when justified on B/P grounds cld lead to reversal of successful efforts already made toward reducing barriers to trade. This case may well serve as precedent for application by other countries of import restrictions for reasons other than inadequate reserves, possibly to direct detriment of Belg herself.
• (4) The Belg action cld also have implications for US commercial policy. The US Govt has sought, through lowering of tariffs and other measures, reduce its barriers to goods from abroad and enable foreign countries to earn dols they need. While there have been departures from this objective, by and large these efforts have been successful and Amer market has been kept open and enlarged for foreign goods. These successes have been achieved in face of extensive domestic criticism of the widespread application of restrictions against Amer goods. This criticism can be met when restrictions can be shown to be needed to protect a country’s reserves. It cannot be met when restrictions not needed for this purpose and appear inconsistent with intl commitments. In such circumstances the continuation of liberal import policy by US becomes increasingly difficult, if not jeopardized.
• (5) US believes these undesirable consequences can and shld be avoided by prompt removal discriminatory import restrictions. Accordingly, before proceeding further in accordance with relevant provisions of IMF and GATT, US wishes present again to Belg Govt considerations bearing on matter. In light these considerations, it hopes Belg Govt will reexamine its position and will agree that restrictions shld be removed.
• (6) Early statement of Belg Govt’s position wld be appreciated.”⁵

Rpt info AmEmbassy Brussels Ecato 641.

Bissell

1. November 23, not printed.
2. November 23, supra.
3. November 26, not printed.
4. November 27, from Paris, not printed. OSR bad strongly recommended that “no action be taken Belgian dollar import restrictions until after completion of present TCC discussions and EPU negotiations in view of importance of subject to NATO effort.” For documentation on the Temporary Council Committee (TCC) discussions, see vol. iii, pp. 1 ff.

5. In telegram Repto 6195, December 12, 8 p.m., to the Department, Harriman indicated that he “earnestly” hoped that no démarche would be made to the Belgian Government “at this moment,” citing other matters regarding an increase in military expenditures that were being pressed on Brussels at that time (see footnote 4 above). (“I believe this is bad week for US Govt to take up any other subject.”) Several days later, alarmed at reports that the Department was directing the delivery of the note (chiefly a matter of conflicting instructions and/or recommendations), Harriman in a personal cable to Secretary of State Acheson again indicated that he “earnestly” hoped that the Department would not instruct delivery of the proposed note “until I have a chance to talk with you.” (Telegram Repsec 37, from Paris, December 18, 9 p.m., ECA Message Files) Harriman was planning to depart from Paris for Washington by plane on December 19, weather permitting.

   The note was delayed. In the first instance, the Brussels Embassy cabled that it planned (“proposes”) to defer delivery of the note, “in view OSR request per Repto 6195, December 12” (Brussels telegram 841, December 18, 1951, 6 p. m., 394.31/12–1851). On December 19 the Department of State cabled that the Embassy should “not deliver note . . . until further instructions.” (Deptel 897, December 19, 12:02 p.m., to Brussels, 394.31/12–1951)

   In the meantime, the Brussels Embassy sent a detailed opinion of the situation as seen by the Embassy–ECA team at Brussels, not printed (Brussels despatch 747, December 18, 1951, 455.002/12–1851). This did not reach the Department until January 2, 1952, when decisions had been taken.

   Also, on December 19, the Embassy telegraphically informed the Department that the Canadian Embassy had delivered a note to the Belgian Government on December 19 (Brussels telegram 846, December 19, 6 p. m., 394.31/12–1951).