Foreign Relations of the United States, 1952–1954, Western Europe and Canada, Volume VI, Part 1

MSA telegram files, FRC Acc. No. 54 A 298, “Paris Repto”: Telegram

No. 17
The Deputy United States Special Representative in Europe for Economic Affairs (Porter) to the Mutual Security Agency ¹

secret

Paris , March 21, 1952—7 p.m.

Repto 1347. 1. The OEEC ministerial council mtg beginning Mar 27 may well mark turning point in determining future of OEEC and entire West European effort toward economic cooperation. Items of major importance on agenda include future of EPU, trade liberalization, increased coal production, internal financial stability, 25 percent expansion program. More generally, mtg will provide opportunity to determine whether OEEC is to have seriously reduced future role with consequence that economic cooperation and support of defense effort will seriously suffer. OEEC is only organization with scope of membership and functions qualifying it to perform necessary broad job of economic cooperation. It was with this in mind that my ltr to Stikker of Mar 6 (Washington Repto 1088²) was dispatched at time when it cld serve as strong evidence of US support OEEC and be considered by the Ministers next week. Ltr has been distributed by OEEC Secretariat to all member countries.

2. Over past year question of future of OEEC has become a matter of increasing concern. Principal disturbing factors are fol:

(a) Evidence of British opposition to making OEEC effective instrument for European cooperation, including specific British proposals for drastic (50 percent) cut in OEEC budget and curtailment important activities.

(b) Feeling that OEEC role reduced since it no longer performs aid distribution function it had in early Marshall Plan days and that its importance has declined because of apparent present US emphasis on defense rather than economic cooperation.

(c) Widespread feeling optimism and pessimism because of lack of progress in solving several critical problems and actual retrogression: e.g., with respect trade liberalization and inflationary threats.

(d) Absence so far of practical steps to implement 25 percent expansion increase program.

(e) Lack of intimate contact such as existed in earlier days between ministers responsible for economic affairs.

(f) Feeling that NATO is monopolizing both public and official attention with consequent neglect OEEC.

3. While official US position as determined by State, DMS and MSA (London Torep [ Todep ] 560, rptd Paris info 4723, Feb 10 [9]³) is that OEEC and NATO are not competitive but are part of same concept building up West Europe–North America partnership, OEEC, unlike NATO, is experienced going concern in economic field. Membership includes Germany, Sweden, Switzerland and Austria, not NATO members whose participation in West Europe economic cooperation is important, even essential. One of important reasons for US supporting NATO move to Paris was to permit close cooperation between two organizations each in own sphere, with expectation that OEEC cld do basic work in many fields of interest to NATO. Future OEEC role shld not be restricted to trade, and payments (as British seem to be proposing) production expansion, improved productivity, conservation scarce materials are among other important fields in which OEEC has important role. Finally, present difficulties facing OEEC in field of trade and payments, internal financial stability, etc., in our view only stress need for strengthening OEEC.

4. In conjunction MSA/W we are proposing take strong steps bring US views to attention British Govt. Are also taking opportunity speak with some foreign ministers in Paris for Council of Europe. Have talked with Stikker, president OEEC ministerial council, who shares our views completely and much concerned over present crisis. Also talked with Lange, Norway, who feels same.

5. Wish to be sure that each minister who is to attend forthcoming OEEC ministerial council appreciates the seriousness present situation and is fully aware strong US views. Situation with respect this problem varies in each country and each mission chief shld exercise own discretion in deciding, in consultation diplomatic mission, whether and how approach govt. On other hand do not wish create any uncertainty in minds ministers if this inopportune and in cases where preferable leave well enough alone. One approach which wld have virtue not appearing create alarm wld be lead off by making inquiry about govt reaction to my ltr to Stikker Mar 6. Suggest you make no reference to British attitude unless minister himself raises this point. In that event wld be appropriate for you to say we are aware of British attitude but hopeful they will decide to give full support to OEEC.

6. Wld appreciate report from each mission prior ministerial mtg.

Porter

1. Repeated to Bern, Bonn, Brussels, Copenhagen, Rome, Stockholm, Vienna, The Hague, London, and Oslo.
2. See Document 8.
3. Document 3.