28. Telegram From the Embassy in France to the Department of State 1
1629. Reference: Deptel 1265, October 4.2 In view recent wave of anti-American sentiment in France over Suez,3 I am afraid that rejection of French proposal at this particular time will be looked upon by French as being dictated as much by political as economic motives. It will be considered as further indication of Washington’s preference for friendship of new Arab countries as opposed to her old European friends and allies, i.e., plenty of United States wheat under PL 480 for Tunisia but none for France. Situation will of course be even worse if we should decide send wheat to Yugoslavia.
As I read the various instructions on this problem, Washington is not concerned with French wheat and flour exports to Channel Islands and other sterling areas. The only other French export during the 1956–1957 season will be to Germany. Accordingly, French proposal is being rejected because of our objections to French-German trade agreement.4 While I recognize that this agreement does some damage [Page 85] to our trade policy, I wonder if Department has taken full account of its political significance, not only in terms of Franco-German rapprochement but also of integration of Europe and Western orientation of Germany, as well as fact that United States Government never formally protested agreement in Bonn or Paris and that agreement arose out of German-French moves in 1955 towards agreement re Saar.
As I have reported, French can and will carry out their planned wheat exports to Germany regardless of what action we take. They will do it more for political than for economic reasons. While I recognize difficulty that this agreement gives US from trade policy point of view, I should like to repeat my view that it has significant long-term political advantages not only in creating generally closer economic relations between France and Germany, but also be giving Germany access to increased wheat supplies from the West, thus reducing somewhat tremendously important pull that Germany ultimately will feel towards agreements with Poland and Russia and a rapprochement to East. I would not like to see United States Government, primarily on basis of trade policy, take any action which might turn German thoughts and eyes increasingly towards wheatfields of East.
Aside from above political considerations, I assume that Department is also aware that rejection of French position on wheat at this time will probably have adverse effects on United States exports of other products to France, especially cotton.
In addition, I should like to remind Department that my support for this program is based upon proposal that franc sales proceeds would be used for projects in which United States has solid interest, i.e. (a) exports to third countries where we have grant aid programs, (b) construction of buildings and facilities for United States Forces and Government in France, and (c) joint United States-French development of manganese deposits in French Equatorial Africa.
In light of above, having in mind especially the unfortunate timing, which will inevitably link this action to Suez situation, I would appreciate if Department could once more review this problem before door is finally slammed on French proposal.5
- Source: Department of State, Central Files, 411.5141/10–556. Confidential. Repeated to Bonn.↩
- In telegram 1265, the Department of State rejected French proposals to purchase wheat under P.L. 480 as long as France remained in the wheat export market. (Ibid., 411.5141/10–856)↩
- On July 26, Egypt nationalized the Universal Suez Canal Company and seized its property. For documentation on the ensuing international crisis, see volume XVI.↩
- Reference is to the agreement signed August 5, 1955.↩
- In telegram 1442 to Paris, October 19, the Department reiterated the U.S. Government position outlined in footnote 2 above. (Department of State, Central Files, 411.5141/10–1956)↩