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

Camp files, lot 55 D 105, “Chronological file—1952”

No. 32
The Director of the Office of European Regional Affairs (Martin) to the Deputy to the United States Special Representative in Europe (Merchant)¹

confidential
official–informal

[Washington,] April 22, 1952.

Dear Livie: One of the things which disturbed me most in a number of telegrams from MSA/E just prior to the last OEEC meeting was the tendency to regard all economic work as the province of the OEEC, confining the NATO, by implication, strictly to the military and political fields. My worries have been intensified rather than allayed by Jeff’s report on the MSA Mission Chiefs meeting which he attended. I judge that in the course of the discussion Porter stated that a “political” decision had been taken to the effect that the OEEC was to become the economic arm of the North Atlantic Community. I suspect Porter is basing himself on the Secretary’s message to Eden² and is reading into the message much more than is there. For whatever help it may be I should like to elaborate a little further on some of our thoughts here in RA on this complicated question of the NATO–OEEC relationship in the economic field.

In the message to Eden we took the position that the OEEC and the NATO should be regarded as complementary organizations rather than as competing organizations. We further said that the OEEC was in a very real sense an organization of the Atlantic Community and not simply an organization of Western Europe. This, it seems to me, is true, but it is very different from saying that the OEEC is the economic organization of the North Atlantic Community. As you know, we have been disturbed for some time at the British attitude toward the OEEC. We have felt that the reasons for their coolness toward the OEEC stemmed from the fact that they regarded it as the primary forum in which the U.S. needled them into futher European integration. Although the British presumably did not stir up competition between the NATO and the OEEC delegations and staff, I feel sure they were not sorry to see the issue presented at times in terms of a choice between the two. As long ago as the Foreign Ministers’ meeting in London in the Spring of 1950³ the British sought to persuade both us and the French that the time had come to plan for the decent burial of the OEEC and that henceforth we should concentrate all our major efforts on the NATO. The British, of course, attach considerable importance to the fact that in the NATO the U.S. participates on an equal footing with the U.K., and other countries, while our somewhat ambiguous position in the OEEC enables us to stimulate action on the part of other countries without necessarily having to undertake the same action ourselves. In this circumstance and given the British preoccupation with their Commonwealth relationships, their position is understandable. However, for the reasons set forth in the Secretary’s message to Eden, i.e., principally the need for a forum in which Germany and the neutrals participate, we feel it would be a great mistake to undercut the OEEC at this time. The message to Eden was of course directed at meeting the specific points which we belived motivated the British.

I believe the difficulties of a sensible division of labor between the two organizations tend to become overemphasized. This undoubtedly is a result in part of a mistaken feeling on the part of the MSA, and perhaps also of the State Department, that the OEEC is an emanation of the MSA and the NATO of the Department. It seems to me that the question of division of labor and relationship between the two organizations falls into place without too much trouble if one thinks in terms of the economic work which needs to be done within Western Europe or in the North Atlantic Community as a whole and then considers which organization can most appropriately handle particular jobs, rather than by the reverse approach of staking out in advance a closed area of responsibility for the OEEC (as OEEC Secretariat and some OEEC delegations have insisted must be done to build up their own morale) and another area of responsibility for the NATO or by seeking to draw a hard and fast line between the problems of Western Europe on the one hand and the problems of the North Atlantic Community on the other hand. Although there are some economic problems which are susceptible to solution on a Western European basis, they are not many, and most economic problems these days require some degree of cooperaton of the U.S. Therefore, the test of U.S. participation is too simple a one. So is the test of whether or not the problem to be dealt with is directly related to the defense program. Certain other kinds of tasks as well NATO is obviously much better fitted to perform. For example, I suspect there may be quite a range of problems where what is important is not the broadest possible participation by the countries of Western Europe, but an agreement among the principal European powers and the U.S. to modify specific domestic policies in the common good. I have in mind such things as joint action on taxation, or in connection with restrictive arrangements such as Buy-American legislation, etc., where a NATO recommendation would be a persuasive reason for a shift in U.S. policy whereas an OEEC resolution would not. Another reason for NATO action in certain cases arises from the fact that the NATO is a permanent organization and the OEEC, in terms of long term independent existence, is probably not. At the time that the Federal Republic comes into NATO I think we will want to give real consideration to the dismemberment of the OEEC, consolidating with the NATO those functions of the OEEC which can be of direct assistance to the work of the NATO, and with the Council of Europe those functions which can and should be carried on on a European basis. Although the fact that we may move toward the dismemberment of the OEEC at some point in the future may make it desirable to initiate certain types of long-term developments in the NATO rather than the OEEC, it does not seem to me to justify any weakening in our support for the OEEC at this time. We do not in any way want to take the steam out of concerted action on the current efforts to increase production, control inflation, liberalize trade and payments, etc. Furthermore, at such time in the future as it may seem wise to reorganize the OEEC, I should hope it could be done in such a way that there is no loss in momentum, insofar as concerted action on these problems of common interest is concerned.

I do not know whether these somewhat scrambled thoughts will help but pass them on for your informal comment and possible use in discussions with Porter et al.

Sincerely yours,

Edwin M. Martin

1. Drafted by Camp.
2. See Document 18.
3. For documentation concerning the London Foreign Ministers meeting in May 1950, see Foreign Relations, 1950, vol. iii, pp. 828 ff.