Foreign Relations of the United States, 1949, Eastern Europe; The Soviet Union, Volume V

840.50 Recovery/1–1949: Telegram

The Ambassador in France (Caffery) to the Acting Secretary of State

secret

Paris, January 19, 1949—7 p. m.

247. Re east-west trade discussions with France reopened with meeting at Foreign Office January 18 called by Alphand¹ and attended by Bruce,² Reagan³ and McDaniel⁴ OSR. (Embtel 6178, December 6.⁵)

Alphand said French would not be ready for week or so to begin discussions on specific items in 1A and 1B lists, as (a) these still under study by French technical departments, and (b) French were concerting with British to establish list upon which both could agree. Alphand made following points, some of which merely restated French position at October 28 meeting:

1. In view importance east-west trade to Europe as a whole and to ERP, lists have major economic and political implications.

2. Whole question regarded by French as one of security policy and separate from ECA program.

3. Alphand stressed importance equality treatment all Western European countries, as, without it, effect of restrictions will be dissipated and complying countries will be a severe economic disadvantage compared to those who do not comply. He counts willingness other countries, particularly Switzerland, Sweden and Benelux, to adhere and implied French reluctance control any items not agreed to by all other countries.

4. As French share our anxieties not to increase Soviet war potential, and have same basic aims and problems as does US, they desire settle question and coordinate measures with US, British and other WE countries to achieve this objective.

5. They foresee number of problems arising from introduction of restrictions:

(a) Effects of non-compliance by other countries.

(b) Control of trade and reexportation through third countries, and economic warfare implications of instituting such controls.

(c) Re introduction of controls goes against present French trend towards relaxing controls and will be blow to expansion of export trade as whole.

(d) Existence of trade agreements with certain EE countries.

6. French having some difficulty with nomenclature of US lists; this will require some discussion at technical level.

7. French are preparing independently their own list containing items which they believe should be controlled.

8. They have held discussions with British and as British also making up list, they hope develop common Franco-British list and to attempt obtain adherence to this list by other WE countries.

9. Alphand referred to criticism which has been levelled against US aid as tending to restrict world trade, and replied that French would not yield to “pressure” under ERP in this matter.

10. He stressed the importance of avoiding public discussion of question or reviewing it openly before Congress. Such discussion would tend to increase criticism cited in 9.

11. He assured us that French are not exporting any armaments to Eastern Europe and that with exception of certain types of civil aircraft and special instruments, French armament list corresponds with US and British lists.

12. Alphand suggested that as possible means of accomplishing security ends without increasing international tension, it might be possible work out short list of key items or components whose prohibition might be effective in creating bottlenecks and thus hampering development Soviet war potentials.

McDaniel informed Alphand of our very satisfactory progress with British and of our expectation of obtaining cooperation from Swiss.

In reply to Alphand’s remarks, Bruce and Reagan pointed out that the instituting of these controls was matter of great importance and urgency, that effective controls could be established if there were a will to do so, and if strong joint effort were made. They recognized problems, particularly that of obtaining common adherence by all countries, but pointed put that immediate question was that of obtaining fullest measure of agreement on our lists, and that other questions could be left until later. They urged an early meeting for presentations of French reaction to our lists.

Alphand indicated he thought such a meeting could be arranged in week or ten days.⁶

OSR concurs.

Sent Department as 247, repeated London as 57, pass to ECA as Toeca 595 from Bruce.

[

Caffery

]

1. Hervé Alphand, Director General for Financial and Economic Affairs, French Ministry for Foreign Affairs.
2. David K. E. Bruce, Chief of the Economic Cooperation Administration Mission to France.
3. Daniel J. Reagan, Counselor of Embassy for Economic Affairs, in France.
4. Joseph M. McDaniel, Jr., Special Assistant for East-West Trade, Office of Special Representative in Europe for the Economic Cooperation Administration.
5. Not printed; it reported that LA and 1B lists were presented to the French Foreign Ministry and the need for the earliest possible discussion was strongly tressed (103.ECA/12–648).

6. A memorandum on the conversation reported upon here was transmitted to the Department as an enclosure to despatch 125, February 2, from Paris, neither printed (840.50 Recovery/2–249).

   Telegram 312, January 24, from Paris, not printed, reported that French Minister for Foreign Affairs Robert Schuman had told Ambassador Caffery that he would take a personal interest in the East-West trade discussions (840.50 Recovery/1–2449).