247. Memorandum of a Conversation, Department of State, Washington, November 10, 1959, 2:30 p.m.1


  • US–UAR Relations


  • For the United States:
    • The Secretary
    • NEAParker T. Hart
    • IOWoodruff Wallner
    • NEWilliam D. Brewer
  • For the United Arab Republic:
    • H. E. Dr. Mahmoud Fawzi, UAR
    • Foreign Minister
    • H. E. Dr. Mostafa Kamel,
    • UAR Ambassador

Dr. Fawzi expressed gratification at the progress made in US–UAR relations. We were moving in the right direction. It now remained to translate good words into realities. Ambassador Hare had extended the fullest cooperation in Cairo and Dr. Fawzi understood that Ambassador Kamel was gratified at the cooperation he had received from the Department. The Secretary said he had a high regard for Ambassador Hare. Mr. Hart observed that Ambassador Kamel had worked very effectively to bring about the present improved climate of our relations. Dr. Fawzi opined that US–UAR cooperation was proving pleasant and mutually profitable here, in Cairo, in the UN and elsewhere.

Dr. Fawzi referred to the ambitious economic development and industrialization programs of the UAR, including modernization of the Suez Canal. The Secretary observed that the Suez transit problem still presented difficulties. Dr. Fawzi agreed, observing that, not speaking of the UAR position, the transit problem was one of the “imperfections of life”. He expressed appreciation for the recent loan of the US Army dredge Essayons to the Suez Canal Company. The Secretary observed that great credit was due to the Egyptians for the way in which the Canal was being operated and asked when the IBRD might act on the UAR loan application. Dr. Fawzi replied that the little information available to him indicated that the IBRD Board might consider the loan on approximately December 1. He appreciated the sober attitude of the US Government on this question, about which he had learned from President Black. The Secretary commented that we had not felt it our business to tell President Black when the loan should be made but we did in principle support it.

[Page 560]

Turning to the UAR’s industrialization plans, Dr. Fawzi said he could think of no better way for the US to cement relations with the UAR than to cooperate in these endeavors. In response to a question from the Secretary, Dr. Fawzi said that the UAR had specific projects in mind and was now trying to make them still more specific. The Secretary commented that bankers always need documentation and time before reaching decisions. Dr. Fawzi observed that the UAR did not desire donations but wished technical and financial cooperation. He hoped that such cooperation would be regarded as a sound investment from all points of view. The UAR wished to raise living standards and desired to see neighboring Arab countries “robust and independent”. The Arab area, though possessed of inherent great wealth, was now in a difficult transition period toward full productivity and economic development. The help of friends was needed. In fifteen years the Aswan High Dam would add between two and two and one-half million acres of irrigable land in Egypt, but in the meantime, Egypt’s population would have increased by 8 million, leaving the population density per irrigated acre four more persons than at present. Development of industry and improved agricultural techniques were the only way to solve this difficult problem. The US was already helping to reclaim and improve certain lands.

The Secretary inquired regarding the status of the Nile Waters agreement. Dr. Fawzi said it was a final, definitive agreement. The authorities in Cairo had not wished to impede its conclusion by haggling over details, such as who takes the extra dollar from whom.

Dr. Fawzi expressed the hope that there would be more “definiteness” in US–UAR cooperation in the economic field in the coming months. Further work was required on the Suez Canal and the second and third stages of the Aswan Dam project were still open. In response to a question from the Secretary, Dr. Fawzi said that preliminary work on the Aswan Dam had already begun but that initial construction would be formally inaugurated by President Nasser in January. The UAR was also planning to generate electricity by diverting salt water from the Mediterranean into the Qattara Depression.

Dr. Fawzi expressed gratification for US action in maintaining the existing quota on long-staple cotton and expressed the hope that this would continue to be the US position. He wondered whether UAR efforts to market cotton directly in Western Europe might be assisted. Perhaps there might be some indication by the US to friends in Europe that purchases of UAR cotton would be helpful. The UAR was itself trying to work out this matter by using direct bilateral arrangements rather than barter details. Western Germany and Italy had been studying this question to see what might be done. There was also a growing problem regarding the adverse prices of raw materials in relation to [Page 561] manufactures. The Secretary noted that the US was aware of this situation and had been helpful with respect to the world oversupply of coffee.

  1. Source: Department of State, Central Files, 611.86B/11–1059. Confidential. Drafted by Brewer on November 13 and approved in S on November 16. The source text indicates this is part two of three. Fawzi visited Washington November 9–12 during a break in his attendance at the U.N. General Assembly. A briefing paper for his conversation with Herter, November 7, is ibid., 611.86B/11–759.