740.00119 Council/5–1348: Telegram
The Ambassador in the United Kingdom (Douglas) to the Secretary of State
2105. Delsec 1736. Informal meeting heads of three delegations this morning1 discussed trizonal fusion. Specific subject under discussion was proposal that trade with French zone should be brought under JEIA procedures by July 1 under general terms of JEIA charter. Strang indicated British delegation agreed but wanted make sure this would not impose additional financial obligations on Britain during period between July 1 and date of completion new trizonal fusion agreement. Douglas and Clay understood British concern regarding dollar drain in Britain during this period and indicated they would accept British reservation to this effect.
Alphand stated French were ready in principle to join JEIA but did not wish to be held to specific date for joining since they believed [Page 243] it would be necessary to settle conditions for joining in advance; military governors should therefore start at once to get agreement on financial and adminstrative conditions. Alphand indicated French also wanted to talk about representation on bipartite coal control at Essen as well as question of insuring availability to France, after joining JEIA, of fixed quantities of German products.
Clay pointed out that agreement on financial arrangements, including French Contributions to JEIA, was matter to be decided at govermental level, rather than by military governors; that French insistence on settling this question before joining JEIA would indefinitely postpone desired peddling of exports and imports. He had no objection, however, to discussing administrative matters such as French representation in JEIA and on bipartite board, which presumably could be satisfactorily settled before July 1.
Regarding French representation in coal control, Douglas felt this was quite separate issue not immediately concerned with common export-import control. It had to do with total fusion, which not now under discussion, but which would of course have to take place before or at time of formation of German Government. French participation in coal control at this time was also complicated by fact that body was closely linked with German bizonal structure.
Clay made point that French desire to ensure fixed amounts German products for France, did not have bearing on question under discussion; that trade with France would presumably be based on trade agreement just as with bizone at present; that occupying powers entering into such trade agreements do so on exactly same basis as other powers. He said that existing trade agreements would not be invalidated by France joining JEIA and suggested previse to this effect might be written into any agreement for common export-import control.
Alphand wanted to know whether there might be difficulty in reaching bipartite agreement between French zone and ECA administrator in event French postponed joining JEIA. He referred to something Douglas previously had told him to effect bilateral agreement might depend on French joining JEIA. Douglas replied that bilateral agreement was supposed to be negotiated by July 3, that ECA administration, in order insure most effective use of ERP funds, would undoubtedly require adequate controls over exports and imports in western Germany, that to this end he would undoubtedly favor consolidation of bizone and French zone exports and imports, and that French participation in JEIA would seem to offer best means of implementing this. Douglas emphasized he could not speak for ECA administration, but believed foregoing was logical approach to problem. He also said ECA administration would not be likely to put pressure [Page 244] on French to join JEIA, but that French agreement to do so by July 1 would have favorable effect on negotiation of bilateral agreement, whereas failure to do so might have adverse effect in sense that it might have bearing on amount of funds to be made available to French zone.
Alphand stated one point he wanted make absolutely clear was fact French could not be expected contribute to export-import pool more than they received from ERP for French zone; that if any deficit should be incurred in JEIA operations France could not assist in making up such deficit. Clay replied that JEIA operates on basis of funds contributed by governments, proceeds from exports and credit; it does not operate beyond its means and deficits therefore cannot be incurred.
As result of discussion, Strang proposed agreement be reached along following lines: (USDel accepted substance this proposal; French delegation will refer it to Paris.)
[Here follows the text of a draft paper on Trizonal Export/Import Policy. For the version of this paper as subsequently approved by the Conference, see document TRI/22 (Final), May 26, page 289.]
There are no further German talks scheduled until May 18 when tripartite meeting on reparations and quadripartite meeting on political organization scheduled. There will be tripartite meeting May 19 to continue discussion trizonal fusion and quadripartite meeting to discuss Ruhr and security.
Sent Department as 2105; repeated Paris as 214, USPolAd Berlin as 131.
- This was the 4th Informal Meeting of the London Conference on Germany.↩