Office of the Historian

460.509/9–2051: Telegram

The Acting Secretary of State to the Embassy in Indonesia

Washington, September 20, 1951—noon.

353. Embtel 425 Sept 141 statement Czech Govt to send Del to Indo Sept to sign one year trade agreement. Dept assumes proposed agreement wld follow usual pattern Indo bilateral trade agreements which provide not for reciprocal exports guarantees but rather for reciprocal assurances each govt will “place no obstacle in way of” exportation of listed commodities.

Indo-Czech one year agreement which expired Aug 1, 1951, listed Indo exports theoretically equivalent to $2.9 million including 1,550 tons rubber and 800 tons tin. Actual Indo exports to Czech calendar year 1950 included 550 tons tin, no rubber. Same agreement lists Czech exports equivalent $2.3 million, chiefly malt, writing paper, textile and metal working machinery, procelainware and windowglass. Actual Czech exports 1950 totaled about $1.7 million. (Dept notes Japan is possible alternative source supply many these items.)

In light current status US–Czech relations, conclusion of new and larger Indo–Czech trade agreement might cause possibly disproportionate harm US–Indo relations.

NSC Determination 13 (airpouched Sept 17) granting Indo exception Kem Amendment (Deptel 335 Sept 17)2 directs its East-West Trade Comite “to continue seek additional measures, consistent with over-all US natl security interests, toward preventing flow strategic commodities directly or indirectly from Indo to Sov bloc with view to making appropriate recommendations to NSC”.

Accordingly Dept wld hope that in any new Indo–Czech agreement Indo wld be able term export strategic commodities. FYI if trade is contd these items, US in light legislative requirements and NSC Determination wld have to satisfy itself from standpoint US over-all security interests volume these strategic exports to Sov bloc is outweighed by advantages gain by Indo economy as result of important [Page 703] critical commodities recd in exchange. This latter standard substantially same as that which US applying to other friendly countries, including UK, re their respective trade with Sov bloc.

Dept confident you are taking all appropriate steps toward above objectives and in this connection have considered any feasible use provisions Hatta secret oral declaration (Embtel 226 Aug 18[16], 19503) supplementing US–Indo mil agreement. Dept keenly aware, however, above objectives very difficult for you to pursue, especially in view possible Indo reaction to pending Ceylonese shipment 5,000 tons rubber to Commie Chi above world price, and in view delicacy Indo polit situation caused by pending Indo ratification Jap Peace Treaty.

Webb
  1. In telegram 425 from Djakarta, September 14, Ambassador Cochran informed the Department of State that the Government of Czechoslovakia was planning to send a delegation to Indonesia sometime in September to sign a one-year trade agreement (756D.00(W)/9–1451).↩
  2. Neither printed.↩
  3. For text, see Foreign Relations, 1950, vol. vi, p. 1051.↩