RA files, lot 58 D 374, “Trade & Payments—Germany”
No. 220
Memorandum by Ruth
H. Phillips of the Office of European Regional
Affairs to the Deputy Director of the Office (Palmer)1
Subject:
- Senate Report on the Mutual Security Appropriations for 1955 as it relates to the European Coal and Steel Community.
This is to call your attention to the report of the Senate Committee on Appropriations on the Mutual Security Appropriation Bill, 1955, directing the Administration against using any funds this year for an additional loan to the European Coal and Steel Community. On Page 5 of the Senate report, Number 2268 of August 5, the following statement on the European Coal and Steel Community appears:
“It has been brought to the attention of the committee that the European Coal and Steel Community has circumvented and delimited markets of United States coal producers.
“The United States coal industry is at present in a depressed condition and the committee does not favor additional loans to the European Coal and Steel Community. While there are no funds earmarked for this purpose in this year’s appropriation in order to protect the export coal markets of the United States producers, the Administration is directed not to transfer funds from other sources for the granting of any additional loan to the European Coal and Steel Community.”
I understand that at his appearance before the Senate Committee on Appropriations, Mr. Stassen was asked several questions regarding discrimination against American coal by countries of the [Page 398] European Coal and Steel Community. Both Belgium and the Federal Republic of Germany have taken steps in recent months to prohibit the direct import of coal from the United States, although U.S. coal has been reaching these countries indirectly through other Community countries, primarily the Netherlands. Department negotiations with Belgium and Germany requesting a more liberal import policy on U.S. coal have so far been unsuccessful. Indeed, a report has reached us that Belgium and the Netherlands may now have a gentleman’s agreement curtailing or eliminating the re-export of U.S. coal from the Netherlands to Belgium. We are currently proposing to raise the question of discrimination against American coal at the next GATT meeting this fall, if this situation continues.
Belgium’s coal industry is in a depressed condition and it is reported that many mines require special help in the form of subsidies and other protection from the Government to keep going. The High Authority of the CSC is now studying the Belgian coal situation and is expected to issue a report shortly on the industry and the steps it considers necessary to make it competitive with the other coal producers in the Community. At the same time, the coal industry in the United States is also in a distressed condition and U.S. coal producers have been making heavy representations to the Administration and the Congress on the limitations on U.S. coal exports imposed by some European countries. In response to the situation in this country, FOA has announced that it plans to export 10 million tons of American coal to be used instead of dollar aid, in the same way certain surplus agricultural commodities have been used abroad. This will be in addition to commercial exports of U.S. coal.
Last year FOA financed the export of 1.3 million tons abroad, on a world-wide basis. A total of 14.4 million tons of American coal, including FOA financed coal, was exported on a world-wide basis last year, of which 8.5 million tons went to Europe. The rate of U.S. coal exports to Europe this year remains approximately the same as last year. An indication of the competitiveness of U.S. coal, due partly to low shipping rates, is the recent request of the United Kingdom for 200 thousand tons of American coal for September on the grounds that U.S. coal is a better buy than European coal. This request from the United Kingdom comes after a long period during which the UK had abstained almost completely from using American coal. Additional demands for U.S. coal from the United Kingdom are anticipated by FOA. It has not yet been determined how much of the 10 million FOA-financed coal will be allocated for European countries, but the Missions have been informed of the overall goal.
- Copies were also sent to Yoder, Lyons, Barnett, Fidel, Corbett, and Boochever.↩