Foreign Relations of the United States, 1949, National Security Affairs, Foreign Economic Policy, Volume I

560.AL/5–2649: Telegram

The Chairman of the United States Delegation (Willoughby) to the Secretary of State

secret
priority

Annecy, May 26, 1949—2 p. m.

156. South Africa announced Monday new import restrictions effective July 1 discriminating in favor of sterling area and against rest of the world. However, they are working out some scheme to offer preferential treatment to European soft currency countries so that whole weight of discrimination would rest on Western Hemisphere, Switzerland and probably Belgium. This plan apparently adopted by South Africa unwillingly under Great Britain’s pressure. I conferred yesterday with Andre Phillip, head of French delegation here and solicited his support for condemnation of South African discrimination even if South Africa should offer to buy French support by some discrimination in France’s favor. Pointed out that discrimination by South Africa, whose foreign exchange availabilities are mainly convertible currency in view of importance of its gold production, would constitute serious blow to multilateral trade principles US is promoting through GATT, ITO and ECA and would tend to perpetuate sterling area as high priced preferential trading bloc. Appealed to French interest in achievement of multilateral trade and destruction of imperial preference system. Phillip non-committal but said he would be in Paris over week-end to confer and receive instructions. Probably to be considered working party May 30 and CP’s May 31. We are likely lose on vote here unless we can get support European continental countries. If suitable opportunity arises before May 30 indication of interest by Embassy or OSR to Baraduc¹ or other appropriate French official would be useful. Similar approach OSR to Dutch or Norwegians useful. Belgium and Luxembourg probably supporting US. Department previously fully consulted and backs USDel position. Understand Tasca² familiar problem.

Sent Paris 10 Harriman for Tasca; repeated Department 156.

Willoughby

1. Pierre Baraduc, French representative in the trade and payments section of OEEC.
2. Henry J. Tasca was on the Paris staff of the Special Representative in Europe of the President (Harriman). At this time he was also one of two alternates to the U.S. Appointed Executive Director of the International Monetary Fund.