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

MSA telegram files, FRC Acc. No. 54 A 298, “Paris Repto”: Telegram

No. 58
The United States Special Representative in Europe (Draper) to the Mutual Security Agency

confidential

Paris, July 11, 1952—9 p.m.

Repto 113. Cotel. Subj: US policy toward Eur Coal and Steel Community.

Early inauguration Eur Coal and Steel Community will present US with certain policy questions, on which SRE recommends fol US position:

1. General principles.

(A) US has stake in success of community because of its important politico-econ-milit relationship to wide range of problems extending considerably beyond political and econ aspects of the community itself. Caliber proposed appointments to High Auth reported so far indicates keen awareness by member govts of necessity that High Auth operations be conducted against background this broader polit reality. US policy toward community in gen, but also toward specific community operations and problems as they develop, must also start with this fact.

(B) Believe US shld firmly support econ integration aims underlying Eur Coal and Steel Community and cooperate wherever possible in achieving objective free market coal and steel within community.

(C) At same time US shld urge extension of free market policies these products to embrace countries outside community.

(D) Spirit of support shld be cordial but without encroaching upon initiative of community and without permitting members fall into attitude success depends on US. We regard sound development community and wide public acceptance more likely achieved by vitality and resourcefulness own members in attaining treaty objectives than by reliance on US.

(E) US shld support effective implementation anti-cartel provisions of treaty and be alert to possible High Auth policies which might adversely affect free market and econ liberalization aims set out in treaty, or which might be inimical to overall US interests, and shld firmly discourage and seek prevent such tendencies from developing.

(F) Firm support of community along lines herein suggested and demonstration of community effectiveness wld probably have important polit ramifications at this time in influencing Eur public and Parl opinion favorably regarding other integration measures, such as EDC, particularly during critical period ratification debate, and be concrete evidence US desire promote Franco-German rapprochement as essential basis integration West Eur. Community is important institution in that several govts delegate substantial degree of control over important sectors industrial and econ life. Thus success or failure may have important polit ramifications beyond immed EDC debate.

2. US relations with High Auth in its capacity as rep of member states.

(A) Advantageous for both gen policy and for specific operating reasons that US, to maximum extent politically realistic and without sacrificing essential minimum negotiating flexibility, deal with community as a unit rather than with member govts on matters within community’s competence. US interest in encouraging Eur integration wld be advanced by this procedure, and strong support wld thereby be given to establishing community’s position and prestige. Degree and timing of this will obviously depend in large part on ability assume its corporate responsibilities. Also preferable from US standpoint that differences between High Auth and member govts on matters within competence of community and of interest US shld be resolved internally and not debated in other forums where US wld have to choose between counsels of High Auth and those of member govts.

(B) For US coal exports under aid program or subj to licensing we wld prefer High Auth state requirements and availabilities for six member govts collectively to OEEC or ECE, whichever approp. US shld be prepared accept High Auth recommendation as to pattern allocations among six members.

(C) Recognize disadvantages in encouraging community conduct external relations as unit in that govts may be able more easily escape individual performance responsibilities, and because of difficulties of isolating coal and steel problems from other industrial and econ problems outside High Auth’s competence. However, believe above advantages outweigh disadvantages.

(D) Constitutional problem of community rep in OEEC on coal and steel matters obviously matter for their joint determination. Cld probably be resolved by one of two methods: Community member govts acting unanimously in OEEC on these matters (with or without High Auth observer) or by member govts authorizing High Auth to rep them in matters within High Auth’s competence (with country observers). Important object is find best way for community members concert their action in OEEC with respect coal and steel problems dealt with there. Rep in ECE might present special problem as East countries might object High Auth rep in any capacity.

(E) Responsibility developing High Auth’s procedures in conducting external relations referred above obviously belongs community. However, US will certainly be expected express views, formal or informal, and shld take approp opportunities express them.

3. Investment and US aid.

(A) US shld strongly adhere gen principle that sound operation community can best be promoted by recourse Eur resources; namely, those of coal and steel industries themselves and private capital market, supplemented by possible IBRD loans to community or individual members. US aid shld be considered only if other possibilities impractical, or if needed promote important US interests. US shld, nonetheless, give consideration requests from High Auth involving supply US materials or equip under aid program although at present appears virtually all necessary materials and equip available in Eur.

(B) Suggest that with regard possible future US aid in capital equip to six member countries from coal and steel industries form of conditional aid or other arrangement be explored whereby counterpart thereby generated wld be earmarked by individual member govts for use High Auth anywhere within community, thereby placing fund of Eur currencies at disposition High Auth which wld encourage rational investment policies.

4. Trade policies vis-à-vis non-members.

(A) US interests wld be advanced by High Auth policies which extend free market in coal and steel to non-members, particularly OEEC countries, consistent with obligations member govts of community undertaken in GATT and in any other agrmts which advance trade liberalization.

(B) Dual pricing and dumping shld be discouraged, since former wld provoke ill-will toward community and raise polit problems which wld complicate integration efforts, while latter might adversely affect US export interests in third markets.

(C) US shld use its influence for achievement above principles and generally support High Auth liberalization efforts which wld prevent reimposition quota restrictions already eliminated or tariff increases beyond levels previously reached.

(D) US will be interested in agrmt to be concluded between UK and community, particularly in avoidance provisions which might have discriminatory effect on non-member states.

5. Technical assistance and productivity projects.

US shld be guided by recommendations High Auth rather than individual members re coal and steel productivity and TA projects within community. Shld be prepared encourage High Auth interest itself in these matters. Are investigating possible projects under Moody Amendment.¹

6. US representation to High Auth.

In accordance with Paris–Wash cable exchange (Torep 2538,² Repto 2259³) responsibility for conducting US relations with community will be with SRE and assume small US del or US observer group will be desirable. However, details of rep shld await constitution High Auth and indication from it of nature rep it desires. We shld also ascertain Brit intentions re rep.

7. Future polit position of the community.

Fr FonMin Schuman has announced Fr will propose to forthcoming mtg Schuman Plan FonMins that Schuman Plan assembly be given task drafting specific proposals for immed creation Eur polit comm. These proposals wld then be submitted for govt approval and Parl ratification in six countries. Decision not yet entirely definite because suggestion has also been made that same task be assigned to a group taken from Council of Eur assembly. Developments this field being currently reported by Emb Paris.

8. Believe desirable SRE issue statement at approp time welcoming inauguration Schuman Plan. Draft being prepared will be cabled within few days.⁴

9. Will continue examine these questions and will appreciate your comments.

Draper

1. For documentation concerning the Moody Amendment, which provided funds to further free private enterprise objectives, see Documents 252 ff.
2. Telegram Torep 2538 to Paris, Apr. 29, requested suggestions concerning how the United States could be represented with the Schuman Plan. (MSA telegram files, FRC Acc. No. 54 A 298, “Paris Torep”)
3. Telegram Repto 2259 from Paris, May 26, recommended that an autonomous delegation for the Schuman Plan not be established which would report directly to Washington, but that staff personnel in the Office of the U.S. Special Representative in Europe be utilized. (MSA telegram files, FRC Acc. No. 54 A 298, “Paris Repto”)
4. See Document 69.