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

CFM files, lot M 88, box 169, “Churchill–Eden Visit”

No. 481
Memorandum of a Meeting of Secretary of State Dulles and Foreign Secretary Eden at the Department of State, June 29, 1954, 10:45 a.m.¹

top secret
CEV MC–7

June 29, 1954, 10:45 a.m. to 11:30 a.m.

Present:

• United Kingdom

  • Eden
  • Makins
  • Caccia
  • Allen
  • Scott

• United States

  • The Secretary
  • The Under Secretary
  • Merchant
  • Robertson
  • MacArthur
  • Bowie
  • Sturm
  • Stelle

[Here follows a list of the subjects discussed.]

The Secretary said he had four items which he would like to discuss. The first had to do with the question of East-West trade. Stassen had wondered if Thorneycroft could come over this week. The Mutual Security Bill in Congress was at a crucial state and Stassen thought that talks with Thorneycroft might help in getting us out of the jam we were in.

Eden said that in principle he was in favor of Thorneycroft coming over. He would have a word with him and would see if it was possible.

Later in the conversation Makins said that the talks thus far had been tri-partite and asked whether it was proposed that a Frenchman also be invited. Merchant said that we did not propose to invite the French. We had reason to believe that the French would not be disturbed since the area of dispute was between the U.S. and the U.K.

The Secretary raised the question of the Anders Poles.² Makins said that Merchant had taken this question up with him and he had sent a telegram asking for an immediate reply. He thought he would be getting a reply shortly. The Secretary said that US law provided for a quota of 2,000 immigrants. The law also provided that if applications were fraudulently made persons would be subject to return. The UK had not as yet given assurances that they might be willing to take back after eighteen months those who might make fraudulent applications.

Makins said it was a question of precedent and the real question was whether the House of Commons or Congress would pass the enabling legislation. He asked what the time factor was for an answer.

Merchant said that there was a lot of Congressional pressures and that as soon as we could get an answer it would be useful.

Eden said that if it were a question of legislation being required there was probably little the UK could do at this stage. The Secretary said that as a practical matter if they get over here they would be absorbed and very few indeed would be returned. He recognized that an indefinite commitment would be difficult for the British to accept in principle.

The Secretary said that from time to time the State Department publishes documents on the history of our foreign relations; that we were now reaching to the time of the war. We would shortly be asking UK approval for publication of some documents which were of bilateral concern, such as some documents of the Combined Chiefs of Staff. The Secretary was not asking Eden to approve publication of documents which he had not seen but merely advising him that we would soon be approaching the UK for such approval. The Secretary said we would be giving the British a note along this line.

The Secretary brought up the question of negotiations with Japan for a trade agreement and bringing Japan into GATT. (At this point the Secretary left the room.)

Eden asked what our point was.

Robertson said that we felt it was necessary to get Japan into GATT. There was no solution for Japanese economic problems except trade. The US had the same problem as the British did in getting our own Congress to open up US markets. He said that Japan had had a 1.1 billion trade deficit last year and this situation could not continue.

Makins said to make the point clear we were going to have trade talks with Japan and in order for them to be successful Japan must be a member of GATT. Mr. Robertson agreed. (At this point the Secretary returned.)

Eden asked what was Japan’s present relationship with GATT.

The Secretary said we had had a conference a year ago and Japan had been brought into GATT on a provisional basis. This had been opposed by the UK. The US took a very serious view of the Japanese problem. We would have to find trading areas for Japan. The US for its part did not want Japanese goods any more than the UK. However, this type of treaty involved concessions by many other countries as well. It was going to be a very difficult problem. Our own people are very much worried. The Secretary had talked with Congressional leaders yesterday and they had said there just were not any Japanese goods which we wanted. The Secretary had said that we might have to take goods which we didn’t want unless we wanted to put Japanese industry at the service of the USSR and Communist China to assist them to bring up their military strength. The Secretary was not asking for a decision by the UK at this point, but he did ask that they give the question serious study because it involved their trade people. The Secretary did want to emphasize the extreme importance which we attach to finding areas for Japanese trade. He pointed out that the Japanese only produced cheap substitutes of things which we produce in quality and that Japanese importation disrupts US domestic markets. The more these areas could be outside our countries the happier we would be. But the Japanese are now running an adverse trade balance of some 1,000 millon dollars. They have survived only because due to the Korean war we have made heavy purchases in Japan of such things as parachutes, trucks, and have had repair work done on military materials. Due to these purchases the Japanese had picked up from 500 to 600 million dollars and they had dipped into their reserves. This, however, could not go on for long without disaster. Both the US and the UK had an interest in that part of the world; they should look on it as a common problem and concert together what to do.

The ideal solution would be to develop markets for Japan in Southeast Asia. The Secretary said one of the serious consequences of the loss of Southeast Asia would be its effect on Japan. If we could salvage a substantial part of Southeast Asia there would be the possibility of developing Japanese trade with that area. Unfortunately, the Japanese had left bad memories in Southeast Asia and would not be welcome back easily.

Eden said this was obviously a difficult problem and asked whether the US was going to give the British a memorandum.

The Secretary instructed Mr. Robertson to consult with Mr. Waugh in preparation of a memorandum for the British.

Eden said that the Japanese question was not purely a Foreign Office question. It was obviously a tariff question of the most combustible kind. He said that if the British could have a memorandum they would study the problem.

Mr. Allen injected that Japanese imitations of British textile designs had recently aroused considerable sentiment against the Japanese.

The Secretary said that we would have to pick and choose very carefully and also work out a way of distributing the burden among as many other countries as possible so that it would not be too serious for either the US or the UK. He thought that the UK problem was perhaps more serious than that of the US, although the US problem would be very difficult.

Mr. Eden asked if it would not be possible for the Japanese to do a certain amount of trade in non-strategic material in Communist China.

The Secretary thought it would be possible. He questioned, however, whether the Chinese Communists would want to deal with the Japanese for non-strategic materials. He also thought it strange that there did not seem to be strong feeling in Japan on trade with Communist China. When he had last talked with the Japanese they had just gotten some coal from Communist China and it had proven to be of very poor quality. They did not believe they could get much of what they wanted from Communist China. In principle the US does not stand opposed to certain types of trade between Japan and Communist China but it was questionable whether this trade would afford any material relief to Japanese economic problems.

The Secretary raised the question of concurrent instructions to the UK and US ambassadors in Paris. Eden said that the UK was in a slightly different position from the US with regard to the French. The UK wanted to give the French diplomatic support in achieving a settlement. Therefore, he preferred a former draft which expressed “hope that an agreement would be reached” instead of the draft revised by the US which stated merely that the US and the UK “would be willing to respect an agreement”.³

The Secretary said that he had never consciously seen the draft which included the word “hope”. There may have been some confusion since he had handed it to Mr. Merchant and Mr. Merchant may have thought that he had read and approved it.

Mr. Eden thought it would be “saucy” for him to say to the French that the UK “would respect” such an agreement.

Makins pointed out that the US revised draft did not say that either government would not respect any other agreement.

The Secretary said this was negative in the sense that it did not exclude any other type of agreement.

Eden said that that being the case the UK would accept the revised US draft.

The Secretary said that if the French tell us that they cannot get agreement on these terms we would expect them to give us the opportunity of the first look at whatever terms are proposed.

Makins asked whether at that point the question would be taken up by the Study Group.⁴ Eden said no it would have to be worked out between the Ministers.

Eden raised the question of paragraph 2 of his telegraphic instructions to Jebb and Paris with reference to “strengthening the hand of Mendes-France” and adding orally that the UK would be prepared to give “diplomatic support” to achieve such an agreement. The Secretary raised no objection to this paragraph.

Mr. Eden raised the question of the date of acting on the Thai appeal to the UN. He said that the French wanted no action taken before July 20.

The Secretary asked what were Prince Wan’s desires in the matter, saying that Prince Wan had denied making any agreement to postpone the appeal.

Mr. Robertson said that Prince Wan wishes to lodge an appeal about July 8, although the session itself probably would not begin before late July or early August.

The Under Secretary said that if there were no move before July 20 it would not come up for a month after that.

The Secretary said that he was not clear in his own mind whether this was a special session of the General Assembly or an emergency session under the “Uniting for Peace” resolution or in fact was a resumption of the recessed session on Korea.

Mr. Eden asked whether the request would be affected by what happened from now on in Indochina.

The Under Secretary said he thought the request should go ahead regardless of what happened in Indochina.

Mr. Eden raised the question of whether we would secure a majority in the UN.

The Secretary said that much would depend on developments and particularly as to where the Observation Commission would go. If things worked out in Indochina it would probably be best to limit their observations to Thailand.

The Under Secretary said that it was entirely problematical what we would get in the line of a supervisory commission for Vietnam. On this question the Communists might well be able to call the turn. There was a possibility that the Communists might buy the Colombo Powers possibly with the addition of a Communist state. There was, however, the possibility that in the last analysis we might have to take some other formula, possibly the 50–50 formula which the Communists had proposed. As against Vietnam, Laos and Cambodia were completely different problems. If we had to take a formula for Vietnam it would be decidedly advantageous to us to have a genuine UN sub-committee already operating in the area. Laos and Cambodia could then invite UN supervision and in that way we could get a different supervisory system for those two states.

Eden raised the question of whether it would meet the French request if it were agreed that no request should be made before July 15. He said that he saw the point about the POC, but he thought it would be difficult to work it out.

Robertson reaffirmed that Prince Wan wanted to present the request July 8.

The Secretary asked why the French should be so excited about the question of an observation commission for Thailand. Mr. Eden said they thought it would react on their Indochina negotiations. The Secretary said he could understand how this would be the case if the commission were going to the Indochina states but he didn’t see why the French should be perturbed if it were just going to Thailand.

The Under Secretary said that the French estimated the consequences differently, at least differently than he did. The French thought this would cause suspicion on the part of the Communists. He thought it would actually strengthen our position.

The Secretary wondered whether the French wanted to give away a large part of Indochina; and also wanted to throw Siam into the pot?

Eden said that he agreed that much would depend on how the request was worded. If it were limited to Thailand it would be much easier. He said that he would have Dixon talk to Prince Wan and see just what his firm dates were.

Mr. Robertson pointed out again that what was involved was the date of the submission of the request and not the date of the consideration of the item.

Mr. Eden said he would like in one sentence to raise a question about Guatemala. He said that anything the US could do to keep the Security Council in the picture and fully informed would help him at home. He thought it would be helpful if the US could write the Security Council some kind of a letter.

The Secretary said that we felt obligated to keep the Security Council fully informed. The latest developments had resulted in a confused picture. There had been at least three devolutions of the supreme executive authority in Guatemala in the last forty-eight hours. Arbenz had resigned in favor of Diaz. Diaz had then resigned in favor of a military junta of which he was a member, and then the junta had turned over command to some other colonels.⁵ We have been approached to assist with good offices for a meeting between the two opposing commands in Salvador. Right now it is difficult to know just whom to deal with. The Inter-American Peace Committee is meeting right now to decide when and where to go. They had received safe conduct from the Arbenz government but before they could arrange for safe conduct from Diaz, Diaz appeared to be out of the picture. Mr. Eden said he thought it would be useful for the Peace Committee to go somewhere and do something. He wondered whether the Peace Commission might not go say to Nicaragua and report how the situation looked to them from there. He said we don’t want the question coming up in the Security Council again.

The Under Secretary said he thought they were considering at least going to Mexico promptly.

The Secretary then raised the question of US action in Indochina while the Study Groups were meeting. Mr. Merchant said that we didn’t want Mr. Eden to have any misunderstanding with respect to the Terms of Reference of the Working Group on Southeast Asia. The US would have to be moving ahead on such things as the possibility of training missions for Cambodia or Vietnam and such US activities would not be excluded by the fact that the Working Group was meeting.

The Secretary agreed that the Working Group would be studying the problem of collective defense and that this would not exclude either the UK or the US from activities outside the scope of its Terms of Reference. The US would have to deal with the situation in Indochina. We had people in Vietnam and some in Cambodia and Laos. We had military advisory groups. We had a vast quantity of military material which we certainly would not want to fall into enemy hands. There were all sorts of arrangements which would have to be made to protect our interests in the area. We might, for example, want to turn over military equipment to Cambodia in advance of a cease-fire.

Ambassador Makins asked whether the UK could assume that they would be kept informed. The Secretary said we would keep them informed.

Mr. Eden indicated his agreement.

1. The meeting took place in Secretary Dulles’ office from 10:45 to 11:30 a.m. The memorandum was drafted by Sturm and Stelle.
2. Under reference here are Polish immigrants in the United Kingdom who had been assisted by former Polish General Wladislav Anders.
3. See Document 487.
4. As a result of the Churchill visit a joint U.S.–U.K. Study Group on Southeast Asia was established (see Document 486). For documentation on the work of this Study Group, see vol. xii, Part 1, pp. 600 ff.
5. For documentation on the resignation of Guatemalan President Arbenz, his replacement by Carlos Enrique Diaz, and the latter’s resignation in favor of a military junta, see vol. iv, pp. 1027 ff.