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

840.00/9–2254

No. 224
Memorandum of Conversation, by Robert W. Barnett of the Office of European Regional Affairs

confidential

Washington, September 22, 1954.

Subject:

• Visit from OEEC Officials Attending IMF and IBRD Meetings¹

Participants:

• Mr. Livingston T. Merchant—Assistant Secretary, Bu. of European Affairs
• Ambassador Attilio Cattani—Chairman of the Executive Committee, OEEC
• Mr. H. J. B. Lintott—Deputy Secretary General
• Mr. M. J. Cahan—Director, Trade and Finance of the OEEC Secretariat
• Mr. Francois Corbasson—Head of the OEEC Mission, Washington
• Mr. R. W. Barnett—RA

Ambassador Cattani said that he and his colleagues were in Washington primarily to represent the interests of the OEEC during the meetings of the Fund and the Bank but that they felt that it was important that they obtain, while here, some general indication of my thinking at this juncture about the European situation and about the work and future of OEEC. He said that he believed that he was aware of the gravity, variety, and urgency of the problems that we faced at this time. The OEEC was, he said, keenly conscious that political and economic developments had a direct impact upon its future work and usefulness. It was also convinced that its own work in the economic field was having significant influence upon what in the political and military field could prove practical.

I told the Ambassador that I was, at this time, particularly grateful for solutions to European problems which OEEC was finding, and that we were, if anything, more than ever before interested in the success of efforts being made by OEEC to achieve effective intra-European cooperation. I said that we regarded the action of the French Assembly in rejecting EDC as a set back and not a defeat for the idea of European integration.

Ambassador Cattani then outlined briefly the present activity and the outlook for OEEC. He mentioned the OEEC annual review, the work of the Deputies of the Ministerial Working Group on convertibility, and the work of the Working Group on trade liberalization. He observed, in passing, that the general economic situation in Europe appeared to be very satisfactory. When the Ministers meet—at a time still undetermined but toward the end of the year—it will be considering the results of the convertibility and trade liberalization studies, the problem of Italian development programs for the south, the problem of the relationship of Green Pool to the OEEC, amongst others.

My own comments on Mr. Jacoby’s participation in the OEEC analysis of the US submission to the annual review, the relationship of the OEEC and NATO annual reviews (which Ambassador said was entirely satisfactory), and transport studies led Ambassador Cattani to remark that it was gratifying to see that the work of the OEEC was being followed and taken seriously here in Washington. I assured him that this was certainly the case.

I then said that I felt certain that Ambassador Cattani and his colleagues would wish to obtain from Assistant Secretary Waugh a general report on the intentions and the plans of the Administration to obtain action on the Randall Commission’s recommendations.² Speaking generally, I said that I could give assurances that the Administration would press forward with a constructive legislative program next year. Ambassador Cattani said that he was glad that I had raised this problem. Europeans, he said, were profoundly distressed by the President’s decision on the Swiss watch case. His colleagues observed that the impact of that case may even have been more severe outside than within Switzerland since it emphasized Europe’s principal complaint against U.S. trade policy. This is not so much that tariffs are high, but that their level and application are unreliable and that the protectionist practices of the United States cannot be anticipated. I said that I was aware of the alarm caused by the watch decision, but I believed its significance may have been magnified by those who attached insufficient importance to the President’s decision on lead and zinc and to other developments which should have reassured those who feared abandonment of the broad lines of our stated commercial policy objectives.

Ambassador Cattani, at several points through our conversation, spoke of the situation in France and the relationship between its economic problem and its foreign policy. He believed that Mendes-France had begun to make use of his decree powers in the field of economic reform, even though no definite indication could yet be found whether he intended to reform first and protect the interests of those wounded in the process afterward, or vice versa. He said in connection with the French role at Brussels that we may have tried to accomplish too quickly objectives which were too high, and that the results of that meeting showed the dangers inherent in excessive urgency and inadequate preparation.

I told Ambassador Cattani that tomorrow I would be crossing the Atlantic for the third time in eight days and that we would be participating in the London meeting with the hope that we could find solutions to political and military problems which would advance the cause of European cooperation. The Ambassador and his colleagues expressed the hope that the meeting would take account of the interests of all concerned and would have a successful outcome.

1. The Ninth Annual Meetings of the Board of Governors of the International Bank for Reconstruction and Development and the International Monetary Fund were scheduled to meet in Washington, Sept. 24–29, 1954.
2. The memorandum of this conversation with the Deputy Assistant Secretary of State for Economic Affairs, Thorsten V. Kalijarvi, which took place on Sept. 29, is in RA files, lot 58 D 374, “OEEC—General 1954”.