Foreign Relations of the United States, 1952–1954, Western Europe and Canada, Volume VI, Part 1

MSA telegram files, FRC Acc. No. 54 A 298, “Paris Repto”: Telegram

No. 20
The Deputy United States Special Representative in Europe for Economic Affairs (Porter) to the Mutual Security Agency¹

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Paris, March 22, 1952—8 p.m.

Repto 1369. Personal for Harriman, Draper, Kenney, from Porter. State pls pass to Perkins.

1. Before returning to Hague, Stikker called on me this morning at my home (where I am again confined with new attack of grippe) to discuss developments re next week’s meeting OEEC council of ministers.

2. He was discouraged by Eden’s coolness toward OEEC as indicated in private dinner of Eden and Stikker Thursday evening. He said also Eden had made no comment on speeches Lange, and Van Zeeland made in ministerial comite of Council of Europe to effect that OEEC confronted with critical situation and support of all its members urgently needed.

3. Appraising present situation discussing strategy for next week’s meeting, Stikker and I found ourselves in agreement on fol:

(a) Current crisis in OEEC is not simply crisis for an organization. Economic cooperation in Western Eur is faltering seriously, and widespread return to bilateralism in trade and payments this year a real danger.

(b) Breakdown of econ cooperation would radically affect NATO milit build-up and would also have important bearing on internal polit developments in several major countries, with perhaps significant effect on govts foreign policy.

(c) Solution to present crisis is to be found in bold new step forward, not in temporizing or retreat. While UK and Fr import cuts must be accepted as fact, council should call on both govts to put forward acceptable programs for early return to liberalization. More authoritative OEEC trade body should be established (now designated tentatively as trade managing board). Council shld establish ministerial group on mutual financial stability. Good progress made by minis group on coal production provides precedent for similar approach to finan stability. Moreover, objectives of higher production must be pressed. Finally, OEEC must develop realistic program to provide support necessary for annual TCC-type operation in NATO.

(d) No significant compromises can be made with Brit on foregoing insofar as they are not prepared for full-scale action by OEEC. In my view, not only will it be impossible to compromise with Brit on future functions OEEC, but I believe positive understanding is necessary at an early date. Such understanding also necessary to permit NATO to function operationally.

(e) Every effort should be made to reach satis agreement at forthcoming mtg. There will be further opportunity at later meeting to be held soon after Stikker’s return from Wash, i.e., later April or May, to consolidate understanding of role of OEEC.

4. I propose to outline above appraisal and proposed method of approach to French (probably Schuman) in meeting which Labouisse arranging early next week.

5. Incidentally, Marjolin told me in separate visit this morning he plans to resign unless OEEC soon comes to grips with basic problems. He is passing this word to heads of all delegations.

6. Butler was unable receive me Friday as earlier indicated. Meeting with him now unlikely before ministerial meeting.

7. Merchant concurs in above and we both feel that every effort must be made before OEEC meeting to moderate present UK position but failing success then our attitude must be such as to temporize or otherwise avoid situation in which Brit–US rift revealed to all. Situation he believes underlines importance direct approach Secretary Acheson to Eden in this matter.

Porter

1. Repeated to London for Holmes and Moore, The Hague for Hunter, and Paris for Labouisse.