Foreign Relations of the United States, 1948, General; the United Nations, Volume I, Part 2

560.AL/3–2648: Circular telegram

The Secretary of State to Certain Diplomatic Missions ¹

secret   us urgent

Washington, March 26, 1948—6 p. m.

1. Czecho has signed Protocol Provisional Application General Agreement Tariffs and Trade, effective April 21. We are convinced that under new Czech regime benefits contemplated under GATT from Czech accession will not accrue to U.S. and probably not to other parties and that much adverse political capital will be made by European Communists if U.S. now proceeds give effect GATT vis-à-vis Czecho.

2. Stated aim GATT was reduction trade barriers and elimination discrimination in international trade. At time it was negotiated, we hoped Czecho would become bridge for increased trade and better understanding between West and East. At that time, we believed Czech Govt. although conscious perils its proximity East, would carry out its obligations under GATT and sincerely endeavor cooperate achievement its objectives. At that time and under those circumstances tariff concessions and guarantees of non-discrimination by Czecho under GATT were of genuine significance and value and under U.S. legislation and methods of conducting trade would justify corresponding obligations assumed by U.S. This situation totally changed by violent assumption power in Czecho by party whose open attitude is rejection cooperation in European and world recovery and opposition our system trade and govt.² Tariff. concessions are meaningless to such a govt, whose announced policy is discrimination and exclusionary tactics and whose fulfillment of its commitments cannot be checked because refusal necessary information. Under these circumstances, tariff concessions are not part of two-way bargain and would give advantages to Czech exporters not shared by US exporters.

Therefore we consider that the situation has changed, involves exceptional circumstances not contemplated by the Agreement, and is such that the benefits of the Agreement and the attainment of its basic objectives are, so far as Czecho is concerned, being nullified and impeded.

3. Please communicate foregoing urgently to Govt to which you accredited highest levels and advise them we propose immediately seek waiver from contracting parties under Arts. 23 and 25 our GATT obligations to Czecho. We are making similar urgent approaches other countries which have given effect to GATT.

4. Your presentation shd emphasize extreme political undesirability of our taking action under GATT at present time which will be widely misrepresented by Communists as proving that they can obtain trade and other advantages from US despite their open opposition to us in ERP and UN. US giving effect GATT concessions wld undoubtedly be used attempt nullify Secretary’s California statement that Italy could not expect ERP aid if Communists succeed in April 18 elections.³ You shd point out that promulgation of proclamation applying GATT to Czecho at this particular time might have severe adverse effect on public opinion in US and on chances for speedy ERP legislation.

5. We wld prefer orderly and concerted action under terms GATT and if enough contracting parties agree wld propose accomplish this by brief meeting their representatives New York to confirm action followed by public announcement.

6. You are authorized your discretion inform Govt that if majority contracting parties unwilling give US waiver its obligations Czecho we intend unilaterally invoke para 5 Protocol Provisional Application with respect our application GATT to Czecho. We wld announce that since US wld in any case promptly withdraw application GATT to Czecho, it wld be useless apply Protocol to them.

7. Although we do not press other contracting parties to seek similar waiver their obligations to Czecho, we wld welcome and support such action by them. Effect wld be heightened by such demonstration Western solidarity.

8. We wld of course be prepared consult under Art. 27 GATT if country desires with respect to concessions not proclaimed on any product in which it has a substantial interest.

9. Pls impress on authorities urgency prompt decision in view Italian elections April 18 and fact Czech action under Protocol becomes effective April 21. Deadline for US action in view terms Protocol and public interest in US is March 31.

10. Necessity secrecy these representations obvious.

Marshall

1. Sent to Paris as 981, Brussels as 449, The Hague as 116, Luxembourg as 11, Ottawa as 48, Canberra as 75, and Habana as 395.

   Because the United Kingdom had been inadvertently left off the original distribution list for the circular, the message was incorporated in telegram 1089 to London, March 30, not printed. To compensate for the abbreviated time left for response, the deadline mentioned in paragraph 9 was extended to April 2. (560.AL/3–3048)

2. For documentation regarding the Communist seizure of power in Czechoslovakia, see vol. iv, pp. 733 ff.
3. For documentation regarding United States interest and concern over the election in Italy, see vol. iii, pp. 724 ff.