Belgian and German restrictions on
imports of United States coal.—Since October 1953,
the Belgian Government has been restricting the importation
of coking coal from the United States, while no such
restrictions have been imposed upon other countries.
Although the restriction was supposedly temporary, it has
not been lifted and we understand, as a matter of fact, that
the Belgians do not intend to import any United States coal
during the second quarter of 1954. The Belgian Government
has indicated that it cannot take any unilateral action on
the coal problem because of alleged obligations to the other
ECSC countries. However, to our knowledge, at no time since
the imposition of the restriction in October has Belgium
formally raised the question of imports of United States
coal with either the High Authority or with other ECSC
members. Moreover, Belgium has not at any time justified the
restriction under the ECSC Treaty. The restriction violates
GATT and is not
sanctioned by the waiver under GATT.
Germany also prohibited direct imports of American coal at
about the same time the Belgian restriction was imposed.
Coal was not included on the Germans’ liberalization list
issued on February 17, 1954, although it was included on the
United States list of commodities, given to Minister of
Economics Erhard in November 1953, for which the United
States was interested in obtaining nondiscriminatory
treatment and a relaxation of restrictions. When questioned
about this omission, the Germans stated that coal and other
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commodities
subject to the jurisdiction of the ECSC were not included
because it was felt that action on these commodities should
be discussed with the High Authority.
Since the Belgians have not taken this matter up with the
High Authority, they apparently are claiming that this is an
ECSC matter as a dodge to delay action on the problem. We
have therefore requested the Belgian Government in a formal
note to discontinue these restrictions.
Although the Germans have raised the question of imports of
U.S. coal through Holland, we are confidentially informed
that the Legal Section of the High Authority found (1) that
Holland was acting within its rights in re-exporting U.S.
coal to Germany and (2) that no basis exists at this time
for the imposition of quantitative restrictions by the High
Authority. In view of this position we are planning on
pressing the Germans further.
If the restrictions against United States coal are continued
in spite of United States protests to the governments
concerned, we are prepared to bring a formal complaint
against Belgium and Germany in the GATT. However, we would prefer to avoid this
action if possible. We believe this problem should be
brought into the discussions with Monnet in an effort to
expedite a solution without recourse to the GATT.
We therefore recommend that the matter be discussed with
Monnet along
the following lines. Restrictions imposed by Belgium and
Germany are clearly discriminatory. As such, we believed
that they cannot be justified under the terms of the GATT waiver. We are not
contending that this is the fault of the ECSC, but as long
as the existence of the ECSC is cited as the justification
for the restrictions, there is danger that the ECSC may
suffer in U.S. public opinion. It would redound to the
credit of the ECSC if it were instrumental in removing these
discriminatory restrictions. The United States Government
has just presented a formal note of protest to the Belgian
Government against the continuance of these restrictions and
is contemplating a similar protest to the German Government.
If these restrictions are still continued, then the United
States is prepared to bring the problem to the attention of
the Contracting Parties to the General Agreement on Tariffs
and Trade through a formal complaint against Belgium and
Germany. However, the United States believes that an
expeditious and amicable solution to the problem resulting
in the removal of these discriminatory import restrictions
affecting United States coal would be far preferable and
should continue to be sought. We believe it would be in the
best interest of both the ECSC and the United States if the
High Authority could assist informally in this matter with a
view toward helping to bring about an equitable
solution.
Restrictive Arrangements in the
ECSC—Up to the present time the High Authority has
failed to take any definitive action under Article 65
against restrictive arrangements in the steel and coal
industries. It is generally known that arrangements in
violation of Article 65 continue in most or all of the
Community countries.
We have been greatly encouraged by the fact that the High
Authority drew up at the beginning of the year a definite
and detailed program of action against the restrictive
practices of the major coal sales organizations to be
carried out this spring. However, we now learn that, as a
result of the decision to continue maximum coal prices, this
action has been indefinitely deferred.
The failure of the High Authority to initiate action under
Article 65 against the various steel and coal arrangements
which are known to exist and which in some cases are
carrying on operations in disregard of the requirements of
the Treaty is already stimulating a resurgence of
restrictionism that the High Authority will find
increasingly difficult to counter. For example, it has been
reported that French and Belgian producers have agreed not
“to invade” the German home market if German steel producers
agree to the establishment of quotas under the agreement
covering steel exports by ECSC member countries.
It is therefore recommended that our views about the lack of
action against restrictive arrangements in the ECSC be
expressed to Monnet as follows: This Government is deeply
concerned that any further deferment of action on the
problem of restrictive arrangements in the coal and steel
industries will basically prejudice later effective measures
by the High Authority. We are cognizant of the difficult
problems involved in pushing ahead in this field. However,
as these restrictive arrangements become more firmly
entrenched, the High Authority will find it increasingly
difficult to dislodge them. The continuance of restrictive
arrangements in the steel industry may render ineffective
the recent important decisions designed to introduce
flexibility and stimulate competition in the ECSC steel
pricing system. With reference to the proposed United States
loan, effective action under Article 65 is important if the
United States is to avoid severe criticism for
assisting—even indirectly—in financing cartelized
industries. In addition, elimination of restrictive
arrangements is especially important in connection with the
High Authority’s proposed investment program. The positive
benefits accruing from this program can only be fully
realized if effective action is taken against restrictive
arrangements in the ECSC.
We know that M. Monnet is aware of the dangers of
restrictionism in the Community. However, unless some
definitive action is
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taken soon by the High Authority against restrictive
arrangements, we are fearful that the confidence of informed
United States opinion in the ability of the High Authority
to attain its goals will be greatly weakened.
