174. Editorial Note

On January 24, 1972, Executive Secretary of the Department of State Theodore Eliot sent a memorandum to Henry Kissinger reporting only limited foreign reaction to the President’s January 19 expropriation statement. Chile and Venezuela were generally antagonistic, and the British Embassy in Washington had referred back to President Nixon’s meeting with Prime Minister Heath in Bermuda in December 1971 and requested U.S. support to oppose on expropriatory grounds a $10.5 million IDA loan for Tanzania that was slated to come to the IDA Board on January 25. (National Archives, Nixon Presidential Materials, NSC Files, Agency Files, Box 285, State, Volume 14)

On February 1 the Department of State sent a telegram to the Embassies in Tokyo and 10 Western European capitals instructing them to provide copies of the expropriation statement to officials of their host governments and solicit their views, including those on the prospects for multilateral cooperation on expropriation issues. The telegram also informed the Embassy in London that the IDA loan for Tanzania had been withdrawn by IBRD staff before the United States had to state a position. (Telegram 17872; ibid., RG 59, Central Files 1970-73, AID (US) 1/1/72)

The Embassy in Tokyo reported that Japan shared the basic U.S. position on expropriations, i.e., for a public purpose and upon payment of prompt, adequate, and effective compensation, but saw no need for a public statement of policy beyond the clauses it had included in its bilateral trade and investment agreements with a number of developing counties. Japan was concerned that the strong U.S. view would make it more difficult to work out a multilateral approach if expropriation were posed as a U.S. issue. The Embassy’s interlocutor cautioned, in a personal capacity, that if the United States was interested in a major cooperative initiative in the expropriation field, it should take a very low profile and leave the initiatives to the multilateral organizations. (Telegram 1831 from Tokyo, February 23; ibid.)

The Embassy in Bonn reported that Germany was prepared to participate in an exchange of views in the DAC, if other OECD members were willing, but did not share U.S. views on dealing with expropriation issues on a multilateral basis. German officials carefully answered the U.S. initiative with an official aide-memoire that set out the investment protection principles in German treaties with a number of developing countries. In presenting the aide-memoire, the Embassy’s German interlocutor said it was not the policy of the Federal Republic to link new assistance to compensation for expropriated property, and [Page 449] that even in the case of Chile German participation in the debt rescheduling would not be contingent on compensation. (Telegram 2933 from Bonn, March 2; ibid.)

The Embassy in Bern reported Swiss pessimism regarding multilateral cooperation on investment protection. The Embassy’s interlocutor said the nature of the investments from capital exporting countries were so divergent that he could not envisage coordination of policy. He said the Swiss Government did not regard it as the role of government either to encourage or to discourage investment, and the Swiss had no legal basis, such as the Hickenlooper Amendment, to exert pressure on governments that had expropriated Swiss investments. (Telegram 741 from Bern, March 17; ibid.)

The United Kingdom, by contrast, agreed to a series of bilateral consultations with the United States on approaches to expropriations. British officials agreed with the United States on some linkage among debt repudiation, expropriation, and debt rescheduling but as of March 28 had not decided on the British position at the April meeting of the Paris Club when the Chilean debt rescheduling would come up. (Telegram 2767 from London, March 28; ibid.)