16. Telegram From the Embassy in Burma to the Department of State1

226. Reference: Paragraph 4, Department telegram 142.2 Ministers U Kyaw Nyein (Industries) and U Raschid (Trade Development) today asked me explore possibility PL 480 agreement. View trade ties with Communist countries, GUB first wishes clarify whether Battle Act or Section 304 PL 4803 would prevent either agreement as a whole or loan under Section 104(g).4 Both Ministers emphasized importance these considerations to Burma.

In reply question whether Burmese rubber exports to Communist China were due to political decision to accommodate CPR or economic decision to exploit good market they said Burma had trade [Page 23] agreement obligation provide certain materials including rubber to CPR. Moreover CPR was paying Burma ten percent above world price for rubber. I sensed that GUB would not pursue PL 480 program if program conditioned on GUB renunciation of freedom sell its products Communist countries.

GUB interested $20 million program breakdown not yet made, but would be 75 percent or more cotton (Japan indicated for processing into textiles), balance dairy products, wheat, flour and tobacco.

Agricultural Attaché Quate, who with Braddock and Phillips5 accompanied me, answered questions regarding procedures and operations PL 480 programs.

Request Department’s comments soonest.

  1. Source: Department of State, Central Files, 411.90B41/9–755. Secret; Priority. Repeated to Tokyo.
  2. Telegram 142 to Rangoon, August 20, set forth guidelines for the Embassy’s use in informal conversations concerning a possible U.S. loan to Burma. Paragraph 4 concerned the possibility of assistance through Public Law 480—the United States would supply cotton (to be processed into textiles in third countries) and other commodities to Burma as a means of supplying consumer goods and defraying the local currency cost of Burma’s development program. (Ibid., 890B.10/8–1755)
  3. Section 304 of Public Law 480 required that the sale or transfer of agricultural commodities under the act did not result in increased availability of those commodities to unfriendly nations.
  4. Section 104(g) of Public Law 480 authorized agreements to use foreign currencies that accrued to the United States under the act for loans to promote trade and economic development.
  5. Daniel M. Braddock, Counselor of Embassy; Robert M. Phillips, Second Secretary.