868.00–FA/11–551: Telegram
The Acting Secretary of State to the Embassy in France 1
2697. For Amb Allen pass OSR for Bissell, Porter, Stone, Cooley. Fol is joint State/ECA msg. Question of special ECA mission in Yugo has been under active consideration here especially following passage Mutual Security Act under which economic aid to be provided Yugo as to other European countries pursuant to provisions of Economic Cooperation Act of 1948. Article 8 of draft Bilateral sent Torep A–2047 Nov 3 rptd Belgrade Ecato A–102 for your comments, included for illustrative purposes, fols similar provisions bi-laterals concluded with all other recipients aid under Economic Cooperation Act and conforms to pattern outlined sec 109 that Act.
Dept and ECA have been discussing subj establishing separate economic mission at this time, with view to reaching decision which will best serve over-all US objectives and at same time conform to legislative requirements. These discussions not completed and no final conclusions reached.
From polit standpoint Dept believes account must be taken of various special considerations flowing from character Yugo aid program [Page 1862] and nature relations with Yugo, in which polit aspects heavily color econ questions, such as (1) possible jeopardizing of agreement on and smooth establishment of mil advisory group, (2) Yugo susceptibility to, and probable Cominform exploitation of, apparent formal connection with Marshall Plan, and (3) need of centering in Amb as focal point all important contacts with Yugo Govt on economic as on other questions. These factors militate against changing existing organizational arrangements.
On other hand legislation explicitly calls for economic mission in recipient country. While requirement could still be met by various alternative patterns including present arrangement with Amb named ECA Mission Chief and Richard Allen in charge of day to day operations, desirable not to interpret provision more broadly than absolutely necessary. Furthermore, ECA feels passage Mutual Security Act and impending furnishing of economic aid thereunder represent logical point for estab regular ECA (MSA) mission in Yugo as means effecting best possible administration of aid program, unless strong reasons to contrary. ECA also notes that earlier economic aid was furnished under MDA act whereas henceforth will be provided under MS Act pursuant to Econ Coop Act provisions. Other countries with strong nationalistic and “anti-colonial” feeling such as Burma and Indonesia have agreed to accept ECA missions, although both refused permit estab US mil assistance missions. Moreover Yugo Govt itself having indicated desire join EPU not rigidly opposed all forms association with Western economic organizations. ECA points out that separate economic mission would be coordinated with Emb under leadership of Amb who wld continue be responsible for assuring coordinated US position and for such general direction as may be required to make program work.
Understand this topic to be discussed at Mission Chiefs’ Conference3 by George Allen, Richard Allen, Bissell, Porter. Would appreciate statement their views.
- Drafted by Campbell and cleared with Barbour, EVR, and ECA. Repeated to Belgrade.↩
- Airgram Torep A–2047 transmitted the text of the proposed draft of the “Economic Cooperation Agreement between the United States of America and the Federal People’s Republic of Yugoslavia” and requested comments prior to discussions of the draft with Yugoslavia. (868.00–FA/11–351)↩
- This is a reference to the ECA Chiefs of Mission Conference which was held in Paris during the first week of November.↩