740.00/4–2754: Telegram
No. 214
The Director of the Foreign Operations
Administration (Stassen) to the Embassy in
France1
Toeco 1705. Joint State, Treasury, FOA message. For your information and guidance the US views on the May 5, 6, 1954 session of the OEEC2 relationship to US long term objectives are stated in this message.
Our objective is to advance toward the broad goals of the United States expressed in the President’s March 30, 1954 message on foreign economic policy3 and other Presidential Messages as follows: [Page 386]
- a.
- The highest possible level of trade and the most efficient use of capital and resources.
- b.
- Solidarity of the free world for mutual security and combined strength.
- c.
- Currency convertibility as an indispensable condition for a freer and healthier international trade, with sterling as the key currency.
- d.
- Revision of GATT as a global framework for the development of workable system of world trade.
- e.
- Increased integration of Western Europe.
- f.
- Decreased requirement of US aid.
In seeking these goals we recognize the present as a transition period in which we are moving toward currency convertibility and multilateral trade. Essential during this period we preserve and strengthen gains for European trade liberalization and OEEC contribution to European integration.
Primary responsibility for resolution problems associated with extension of EPU must rest with Europeans. The United States will not present any US plan to the session but as in 1953 will work quietly with the members to resolve outstanding differences along following lines.
- 1.
- The extension of EPU for one year from June 30, 1954 with an escape clause similar to the one now in effect initiated by the UK last year.
- 2.
- Agreement on some repayment of outstanding EPU debts on a medium to long term basis with some appropriate reopening of credit tranches without undue drain on EPU convertible assets. Specific method of payment is not a US concern and agreement between creditors and debtors without US taking position is desirable.
- 3.
- We prefer no increase in percentage of gold payments unless necessary to reach agreement on one year extension.
- 4.
- Definite arrangements should be made for the continued liberalization of intra-European trade during the next year.
- 5.
- Steps should be taken during the next year to expand the liberalization of trade between the EPU area and the dollar area by a specific follow-up by the Trade and Payments Committee of the OEEC on its present dollar trade study. In order that there may be full coordination of OEEC activities in this field with the GATT and the IMF, it may be appropriate to have representatives of these bodies participate as observers in the OEEC.
- 6.
- The sum total of all actions should be such as to facilitate the early convertibility of sterling at the right time as determined by the UK, and of other currencies through national decisions.
- 7.
- The session should maintain and strengthen the cohesion and cooperation of all of the member nations with each other.
To repeat, the foregoing does not constitute a detailed plan of action to be presented by the United States, since the working out of these matters is the primary responsibility of the Europeans, but [Page 387] rather it is a statement of principles for your guidance in discussions with other countries which you are now authorized to conduct informally. Please continue to keep us advised as you learn of the developments of the position of other governments.
Above based in part on inter-agency review in NAC.
Paper reflecting NAC views in detail following by airpouch.
- Drafted by Stassen, cleared with Waugh of the Department of State and Burgess of the Department of the Treasury, and repeated to 17 European posts.↩
- Minutes of the 251st meeting of the OEEC Council, which total 124 pages, are in OEEC files, lot 56 D 217, “C/M (54) 15”.↩
- For the text of the speech under reference, see Public Papers of the Presidents of the United States: Dwight D. Eisenhower, 1954, pp. 352–364.↩