341. Memorandum of the Conversation at Dinner, Hotel Beau Rivage, Geneva, November 8, 1955, 8:30 p.m.1
SUBJECT
- East-West Trade
PARTICIPANTS
- Mr. Tippetts, British Delegation, Working Group
- Mr. d’Harcourt, French Delegation, Working Group
- Mr. Cheklin, USSR Delegation, Working Group
- Mr. Goodkind, U.S. Delegation, Working Group
By prearrangement among the three Western teams Mr. Tippetts, leader of the British Delegation in the Working Group on Trade of the Committee of Experts, was host at an official dinner on the night of November 8, 1955, for the leaders of the other three Delegations in the Trade Working Group, namely, M. d’Harcourt (France); Mr. Cheklin (USSR); and Mr. Goodkind (US). The affair took place in a private room at the Hotel Beau Rivage. All the conversation was in English, and the atmosphere during the dinner and the conversation following dinner was very friendly and relaxed. Most of the conversation was of a casual and social nature, but in the course of the evening Mr. Cheklin made a number of significant remarks, which may be noted as follows:
When pressed again to indicate what he thought should come out of the discussions of the Trade Working Group, or how the matter should be presented to the Ministers, Cheklin refused to indicate [Page 723] any ideas of his own saying only that the Experts (meaning the four top Experts) should discuss this problem among themselves as “they have more authority than we do”. In further response to questions he indicated that he regarded the Experts as being members of the two working groups and already apprised of all that had gone on in these groups and that there was no need for the Working Group on Trade to report as such to the Experts.
D’Harcourt pressed Cheklin on the strategic controls, noting that he had said these controls did not injure the Soviet economy and in fact had benefited it since it had led the Soviets toward building up certain industries which otherwise they might not have done. He, therefore, asked why Cheklin was so concerned about strategic controls. Cheklin said, “Well, you know, sometimes it is a matter of prestige”.
Later Cheklin referred to Soviet-Danish trade relations, recalling that the Soviet Union had broken off negotiations for a trade agreement with Denmark when the latter refused to sell two tankers. In the face of this attitude Cheklin said the Soviet Union decided to deal elsewhere and it had not suffered by this decision since it had gotten the goods it wanted from other countries which had not taken this discriminatory attitude toward the Soviet Union.
Cheklin slyly baited Tippetts about rolling mills, noting that the Soviets had presented a very juicy order worth some 10 million pounds but then had been told that it would be contrary to the national interest for the UK to export this equipment. Now, he said, we are negotiating with the West Germans. When Tippetts remonstrated that the West Germans could not sell the Soviets anything that the UK could not sell, Cheklin laughed and replied that the West Germans were saying they were willing to sell all kinds of things, and he noted the rise of West Germany as an exporter in competition with the British (Tippetts and d’Harcourt later professed not to swallow these assertions which they recognized as the familiar device employed by the Soviets to drive a wedge between the Western countries).
With reference to certain points that had been made during one of the Working Group meetings about manganese, Cheklin said to Goodkind that he (Cheklin) could have replied in the Working Group that the Soviets had not cut off the supply of manganese to the United States. The facts were, he said, that about 1947 the Soviets had run into difficulties having their ships unloaded in US ports, and now they found that their manganese suffered a tariff penalty in competition with manganese from Western sources. Goodkind indicated that the MFN tariff problem was one of those questions requiring Congressional action, that it had stemmed from the general public apprehensions in the United States over the acts and intentions [Page 724] of the Soviet Union, and that substantial improvement in relations generally probably would have to precede any amelioration of the tariff problem. He then asked Cheklin what difference the tariff differential made anyway, since the Soviets could put any price they cared on their manganese. Cheklin said that it was true that they could adjust their price, but their trading organizations liked to get certain prices and did not care to sell to one lower than to another, and in fact often would not sell at all if the price were not right.
D’Harcourt asked Cheklin if he were really serious that the Soviet Union did not apply controls over the export of strategic materials and would sell such materials to anyone. Cheklin replied solemnly that they did not have such controls and would sell to any country what they had available for export. D’Harcourt then asked whether they would be willing to sell uranium to France, and Cheklin said he didn’t think they had uranium available for export. He then made it clear that his assertions about a non-discriminatory export policy of the Soviet Union applied only to the list of goods which were considered available for export.
Goodkind asked Cheklin if the nomenclature of Soviet goods for export to which he had referred in the Working Group meeting was available and if it was the same for all countries. Cheklin said that it was the same and he was sure it was available, and would attempt to get it for us. He said that he might ask Moscow to send it to him.
There was a discussion about the Soviet procurement system in which it was made clear that the plans are fixed for several years ahead, that the trade agreements are negotiated by the Ministry of Trade and that then the Soviet trading organizations take the actions to fulfill the buying plans without having to deal through the Ministry of Trade. Goodkind asked whether this system did not preclude the exercise of Western initiative in trade with the Soviet Union since the Soviet trading organizations would buy only what was already provided for in their own planning. Cheklin said that there were always exceptions that one could not foresee all needs and possibilities in planning ahead over a period of several years and that the goods they were interested in procuring were not always available so that there remained room under the plans for additional procurement. For these reasons the trading organizations would often come to the Ministry of Trade and ask for exceptions in order to buy something different.
Tippetts and Cheklin had a discussion about difficulties Western traders have with the Soviet trading organizations over contract provisions. Cheklin passed these difficulties off as simply bargaining problems, but agreed with Tippetts that it would be a good thing if standard contracts with standard terms could be developed and that this work should go forward in the ECE.
[Page 725]D’Harcourt stressed the difficulties that Western importers had in obtaining data about Soviet goods. Cheklin said that these importers need not come to the Soviet Union since the Soviet Union maintained trade missions in Western countries. D’Harcourt said these missions often were unable to supply adequate data about prices, delivery dates, specifications and so forth. Cheklin said that if this were so, the trade missions were not doing a good job and he was glad to be notified of such facts.
After Cheklin had gone the three Western representatives agreed that the Soviet delegation had consistently displayed a political and a negative attitude toward the trade questions on the agenda, and that there seemed no alternative but merely to report this fact separately to our own Ministers, who might then wish to make strong speeches about the Soviet attitude on the Trade aspects of Item III.
- Source: Department of State, Central Files, 396.1–GE/11–1055. Confidential. Drafted by Goodkind on November 10.↩