Foreign Relations of the United States, 1952–1954, Western Europe and Canada, Volume VI, Part 2

OCB files, lot 62 D 430, “Iceland, 1953–1954”

No. 704
Memorandum by the Director of the Office of British Commonwealth and Northern European Affairs (Raynor) to the Operations Coordinator (Radius)¹

secret

[Washington,] May 28, 1954.

• Subject: OCB Consideration of Tariff Commission’s Recommendation on Groundfish Fillet Imports

I would like to suggest that at the next meeting of the OCB, Mr. Murphy present for consideration, as it will affect Iceland, the Tariff Commission’s recommendation to the President that an absolute quota and a higher tariff rate be imposed on groundfish fillet imports.²

On May 25 we reached agreement with Iceland, after negotiating since February 2, on changes in the implementation of the U.S.–Iceland Defense Agreement of 1951.³ Under the Agreement, we secure important additional military rights. Toward the end of the talks, when the Icelanders had learned of the tariff recommendation, one Icelandic negotiator expressed the expectation that Iceland’s economic problems would not be made more difficult, and stated that Iceland “cannot live on military agreements alone.”

The Tariff Commission recommendations would cut Iceland’s already limited Western markets still further, and would cause serious economic and political repercussions in Iceland. U.S. influence would receive a heavy blow which might have the most serious consequences for U.S. security interests in Iceland. A certain result would be an effort to develop further her Soviet bloc market, currently absorbing over 25 percent of her exports. A possible result would be the loss of the results of our recent negotiations, and the prospect of trying to save our rights under the 1951 Agreement. Iceland cannot survive without selling her fish, and she will tend to turn against those who close their markets and toward those who open them. The UK market is closed. If ours is increasingly restricted, Iceland can with some validity question the advantages of her NATO association.

I would suggest that Mr. Murphy propose to the OCB that it make a recommendation, as the OCB and on the basis of its special concern for the Icelandic situation, to the President to reject the Tariff Commission’s recommendation.⁴

1. Drafted by Proehl.
2. The recommendation of the Tariff Commission, dated May 7, has not been found in Department of State files.
3. For the substance of the agreement, see the editorial note, supra.
4. According to the minutes of the meeting of the Operations Coordinating Board, June 2, the Tariff Commission’s recommendations to increase the tariff and impose an absolute quota on Icelandic fish were discussed and rejected by each member of the OCB. (OCB files, lot 62 D 430, “Minutes II”) President Eisenhower rejected the Tariff Commission’s recommendations on July 7.