Office of the Historian

224. Memorandum of Conversation0

July 30, 1958, 3 p.m.

SUBJECT

  • Dollar Liberalization in Italy

[Here follows the same list of participants as Document 218.]

Under Secretary Dillon told the Prime Minister that the United States hopes that Italy will introduce further dollar liberalization. He said that we appreciated very much the liberalization which had taken place a year ago and we were glad that this had introduced no strains on the Italian economy. In fact, the Italian economy was sound and gold [Page 481] holdings have increased during the past year. We believe that it is appropriate at this time for the Italian Government to consider further liberalization, and we note that liberalization toward the OEEC area is much more complete than toward the United States. Mr. Dillon said that he was taking this opportunity to bring this matter to the attention of the Prime Minister and to express the hope that something can be done in this direction. Further dollar liberalization would be helpful to us in obtaining support domestically for our liberal trade policies; our difficulties in this direction have recently been illustrated by discussions in the Congress over our reciprocal trade agreements legislation.

The Prime Minister said that this problem had recently been examined in Rome and it has been concluded that it is in Italy’s interest to continue this liberalization policy. It cannot be separated, however, from European aspirations for a Free Trade Area; it is hoped that progress will be made in this direction, in spite of certain obstacles introduced by the French. Experience has shown that a policy of liberalization encourages expansion of the Italian economy. Minister Ortona, in the Embassy in Washington, is an outstanding expert in this field. It would be helpful if Mr. Dillon could suggest some specific items, which the Italians would be glad to discuss with us.

The Secretary assured Mr. Fanfani that the Department will be glad to undertake such discussions with the Embassy here.

  1. Source: Department of State, Central Files, 865.0077/7–3058. Secret. Drafted by Service and McBride. See also Documents 218–223.↩