Foreign Relations of the United States, 1955–1957, Western European Security and Integration, Volume IV

252. Northern European Chiefs of Mission Conference, London, September 19–21, 1957: Summary of Proceedings¹

London, September 19-21, 1957

Participants

• American Embassy, London—
  • Ambassador John Hay Whitney
  • Minister Walworth Barbour
• American Embassy, Reykjavik—
  • Ambassador John J. Muccio
  • Joseph Carwell, Counselor
• USRO, Paris—
  • Ambassador George W. Perkins
• American Embassy, Helsinki—
  • Ambassador John D. Hickerson
  • Mose L. Harvey, Counselor
• American Embassy, Ottawa—
  • Ambassador Livingston T. Merchant
• American Embassy, Dublin—
  • Ambassador Scott McLeod
  • Arthur B. Emmons III, Counselor
• American Embassy, Oslo—
  • Ambassador Frances E. Willis
  • G. Hayden Raynor, Counselor
• American Embassy, Moscow—
  • Ambassador Llewellyn E. Thompson
• American Embassy, Stockholm—
  • Ambassador Francis White
  • William Cochran, Counselor
• American Embassy, Copenhagen—
  • Ambassador Val Peterson
  • Ward Allen, Counselor
• Hon. Clarence Randall
  • Special Assistant to the President
• U.S.I.A., Washington—
  • Mr. William Clark, Assistant Director (Europe)
• Department of State, Washington—
  • Hon. John Wesley Jones, Deputy Assistant Secretary of State
  • Mr. William Sanders, Special Assistant to the Under Secretary of State
  • Hon. W.N. Walmsley, Jr., Deputy Assistant Secretary of State for International Organization Affairs
• Department of State, Washington—
  • Benson E.L. Timmons, Director, Office of Regional Affairs
  • Marselis C. Parsons, Jr., Director British Commonwealth and Northern European Affairs

Welcome

The Honorable John Hay Whitney, as host Ambassador, opened the Conference with a few words of welcome, and then turned the meeting over to Mr. Jones, as Chairman of the Conference.

Opening Remarks

Mr. Jones, speaking on behalf of the participants in the Conference, expressed high satisfaction with the arrangements which had been made and his deep appreciation to Ambassador Whitney and members of his staff. He said that the Secretary regretted being unable to attend the Conference but had sent the following message:

I regret very much that I am unable to attend your meeting in London. I have found in the past that Conferences of this type are very useful, not only to me personally, but also to the participants and the Department as a whole. I am sure that your consultations will be fruitful and your meeting successful.

John Foster Dulles

Mr. Elbrick, who had taken an active part in the preparations for the Conference, also regretted his inability to be present. Mr. Jones in reviewing the purposes of the Conference said that it was hoped that it would provide an opportunity for the exchange of ideas on significant developments and trends and for the discussion of the problems common to the NATO countries. The Conference would provide an opportunity to consider Soviet policy with respect to the countries to which the Chiefs of Mission attending were accredited. He suggested that while two days had been allotted for the Conference, it would be possible to continue, if necessary, on Saturday morning but that it was hoped the Conference could be completed at least by noon on Saturday.

Mr. Jones proceeded to outline current United States policies with respect to the Northern European countries, the Soviet Union and the Middle East. He said that the special relationship with the United Kingdom and France growing out of World War II had been based on the assumption that the foreign policy objectives of the three countries were parallel. Within the framework of this tripartite relationship an even closer tie had been developed with the United Kingdom. The United States–United Kingdom relationship is at the core of the NATO alliance and is an important element in SEATO and the Baghdad Pact. Indicative of the attitude of the United States toward this special relationship is the fact that there is no NSC policy paper on the United Kingdom.

The Suez Affair caused the United States to review its relationship with United Kingdom and with France and as a consequence tripartite consultation was quietly abandoned and replaced by bilateral consultation within the NATO framework.

The United States has the following objectives with respect to the United Kingdom:

1. To encourage the United Kingdom to maintain a substantial military effort.

2. The United States would expect prompt assistance from the United Kingdom in the event of war with the Soviet Union.

3. We expect continued support from the United Kingdom in our dealings with the Soviet Union and the Communist bloc.

4. We expect British support on such questions as Disarmament, Europe security and German reunification.

5. We would like to see British support for European integration and some association with the organizations developing on the continent in the field of integration.

6. We support the maintenance of the British position in the Persian Gulf, but we would hope that they would refrain from the use of force.

7. We seek continued British support for the UN Moratorium on the question of Chinese representation.

8. In the event of a resumption of Communist aggression in Korea or elsewhere in the Far East, we would hope for British support.

9. The United States continues to support the Commonwealth and the United Kingdom position within it.

With respect to Scandinavia we support the preservation of the independence of the Scandinavian countries and we seek to encourage the development of their will and capacity to resist Communist aggression. … The United States needs defense facilities in Greenland and this need is increasing. We will avoid any steps threatening the balance in the relationship between Finland and the Soviet Union while at the same time endeavoring to strengthen the ability of Finland to maintain its independence. We wish to keep United States forces in Iceland and to retain the availability of our bases there. Our objective is to encourage Iceland to remain an active NATO partner and reduce Soviet economic and political influence within the country.

We wish to take advantage of Irish antipathy toward Communism and would welcome Ireland as a member of NATO if the partition question were settled. Our objective is to ensure the collaboration of Ireland in any future conflict, including the use of its territory for military purposes. With respect to Canada we seek to maintain the most intimate relationship possible and the continuation by Canada of its active role in North American defense and in NATO.

There are two aspects of our policy concerning the Soviet Union:

1. The maintenance of the strength and independence of the Free World and

2. A reduction of the influence of Communist parties in the non-Communist world.

We wish, through our regional alliances, through controlled disarmament, and through the exploitation of contradictions in the Soviet Union and in the Satellites, to reduce and eliminate the Soviet potential for aggression.

Mr. Jones listed a number of recent developments which, in the opinion of the Department, indicated a conscious effort on the part of the Soviet Union to intensify the Cold War. Among these developments he mentioned the rejection by Ambassador Zorin of the Western Disarmament proposals,² the Soviet ICBM announcement,³ Syria, the recent Soviet note to Western Germany,⁴ and the unusually offensive notes to the United States, United Kingdom and France on the Middle East.⁵ In addition he mentioned the threat to Turkey,⁶ Soviet Naval activity in the Mediterranean and the Arctic as well as Gromyko’s press statement of last week.⁷ Mr. Jones said that the Department viewed the present situation as the most dangerous we have faced since Korea. The Department was particularly concerned because of the emotional and impetuous character of Khrushchev.

Finally Mr. Jones reviewed developments in the Middle East crisis and reported on U.S. policy decisions and actions flowing therefrom.

NATO

Ambassador Perkins in a review of the situation in NATO said that the alliance had survived quite well the shocks of the past year. He mentioned in this connection Suez, the German desire to reduce military service and place increased reliance on regular and voluntary forces and the British White Paper.⁸ Mr. Perkins said that the prospects of solution of the Cyprus question appeared better than in the past and there were indications that the debate in the United Nations this year would be on a more reasonable plane. General Norstad on September 18 had made a preliminary presentation to the NATO Chiefs of Staff at SHAPE on the implications of the British troop reductions on the continent and the initial reception of the report had been satisfactory. There appeared some hope of working out adjustments in the original British plans which would be satisfactory to the other Allies. Ambassador Perkins said that any acceleration of the German defense program had been impossible before the German elections but that he had been encouraged by Chancellor Adenauer’s post-election statements.

In the past there had been little political consultation except in the Ministerial meetings in NATO but now an increasing number of problems were being discussed in NATO. He said that it was noteworthy NATO had been able to deal expeditiously with various questions raised during the recent disarmament negotiations.⁹

Mr. Perkins said that for considerable time there had been little in the way of economic consultation in NATO. This situation was now changing and he mentioned consultation in NATO on Iceland’s economic difficulties and on the Sudanese cotton problem as examples.

In conclusion, however, Mr. Perkins expressed the opinion that the recent United States decision to further reduce its military forces by 100,000 men would cause difficulties in NATO. He said that he was fearful that this United States decision would cause repercussions in Germany endangering the chances of persuading the Germans to accelerate their effort. He was also concerned at the possible difficulties which the United States announcement could cause in the current negotiations with the British on the subject of reduction of their forces on the continent. Mr. Perkins said that there had been no reaction yesterday when he explained to the NATO representatives the United States decision.¹⁰

USSR

Ambassador Thompson¹¹ said that there are a number of things we do not know about the June plenum in Moscow which resulted in the demotion of Molotov and Company.¹² We do not know who started the crisis involving the changes in the top leadership nor do we know just what role Zhukov played. It seemed to him, however, that the American press had considerably exaggerated Zhukov’s role and there is some evidence to support this view. He believed that the reports that Bulganin will replace Voroshilov, who will retire, might be true but it is questionable if this is likely to take place before upcoming anniversary celebrations. Khrushchev, however, has certainly emerged as “much more equal” than the others. He operates through the Party and it is noteworthy that 7 of the 8 Party Secretaries are full members of the Praesidium and the 8th a candidate member.

Khrushchev must watch his step. It could be argued that he has largely adopted his opponents’ program on foreign relations as indicated by the various developments in foreign affairs since June. Khrushshev’s main interest is in internal politics, particularly the decentralization of industry and the new lands program and on those he is going ahead. He has also packed the Praesidium and Central Committee with his own men and may endeavor to carry this further.

Khrushchev is probably not now in a position to overrule the army on any question that directly affects its interests. He has greatly reduced the power of the police with a corresponding increase in the influence of the army. If any of his policies were to have a dramatic failure he might be eliminated but it is too soon to tell just how he is going to operate.

In his three speeches to the intellectuals he turned the clock back and reasserted the role of the Party and it is hard to see how any creative writer can operate in Russia today.

In general the changes in leadership have not had a good reception and contemptuous opinions of Khrushchev are often expressed, sometimes coupled with favorable remarks about Malenkov. People are concerned about current uncertainties and the danger of guessing wrong about which way the cat will jump. Khrushchev seems to have appealed to the provinces against the interests opposing him in Moscow, particularly to party officials and factory managers outside Moscow. Ambassador Thompson thought that in the long run Soviet internal policies are the most important both to them and to us and that decentralization carries some element of democracy and could if carried through have a great influence on Soviet foreign policy. From their point of view it is much needed and probably wise if it can be carried out properly. However, Khrushchev’s reliance on the Party which is to a considerable extent a prisoner of ideology is necessarily disturbing.

Ambassador Thompson thought that the Department’s views as outlined by Mr. Jones exaggerate the dangers. Khrushchev has very sensitive antennae and is aware of many of the difficulties of Marxism as indicated by his statement that it goes better with butter. It would be to our advantage if he takes greater account of what the people want. While he is impetuous, he cannot operate alone and if he fails it will be most serious for him. The results of decentralization are being closely watched and the desperate effort to overcome the failure of collective agriculture and the gamble of the new lands program are still uncertain. Production of new lands falls off rapidly after the first year and the big harvest of last year will not be repeated this year. Moreover the Soviet Union is going into a period of reduced labor forces. The law against the parasites is an illustration of this and incidentally strikes at the dissident university groups which have gone the furthest in questioning the Soviet system as indicated at the recent Youth Festival.¹³

Ambassador Thompson listed the following elements as weaknesses in the Soviet system:

1. The shock of de-Stalinization.

2. Effects of the fight in the June Praesidium.

3. The near revolt ot the intellectuals and youth groups.

4. The problem of agricultural production.

5. The drop in manpower.

6. The doctrine of separate roads to socialism, Mao’s “1000 flowers”¹⁴ and Tito’s continued success.

7. The problems of Poland and East Germany.

8. The sterility of Communist ideology.

So far as could be judged from Moscow the crisis in the Syrian situation appeared to have been brought on more by the Syrians than the Soviets. He believes that over the long range, Khrushchev really wants and is almost forced to a détente in relations with the West. He must find incentives to make up for the manpower drop which requires releasing both resources and personnel. There are therefore many restraints against Khrushchev acting even as a sane dictator, much less as a Stalin. The army would not allow him to build up the police unless the position of the regime was at stake. Ambassador Thompson is optimistic in the long range about Soviet seriousness in the disarmament situation.

With respect to the students who went to China¹⁵ he thought that the Chinese had been much cleverer than the Soviets. Moreover the very fact that the Festival was so highly organized by the Soviets had aroused contrary reactions among the students. He thought that our disarmament proposals were too loaded against the Soviets from their point of view to give them a chance to be accepted but he believed that the Soviets would be ready to talk later. He thought that the Soviets had less fear than we have of small countries getting atomic weapons (except West Germany) since they can control their allies better than we.

In conclusion he said that their main current objectives are to weaken the ring around them and to devote their resources to building up their standard of living.

A ten-minute coffee break then took place.

Mr. Jones then asked Ambassador Whitney for a statement on the current political situation in Great Britain.

United Kingdom

Ambassador Whitney said that as a result of the Suez experience, Britain’s position in the world and her relations with the U.S. have been the subject of much discussion. The British are disposed to be more realistic than before about their weakened world position and to cut their coat to fit a relatively smaller piece of cloth, e.g., the new defense policy and the withdrawal of forces from the Continent. At the same time they have a more favorable attitude toward the Continent and European integration, e.g., the Free Trade Area proposal. The Macmillan Government has also shown a keen desire to re-establish Anglo-American relations, with good progress to be noted, particularly in the Middle East, despite considerable anti-Americanism in this country. But the British are sensitive on the subject of consultation and from time to time go out of their way to assert their independence, e.g., China trade controls.

In spite of her reduced power Britain is still an important ally, sharing our democratic principles, and still exercises considerable world influence. The Macmillan Government has been firmer in dealing with the Soviet bloc than Eden. The British have been disappointed with their experiences in the U.N. and are anxious to restore the role of the Security Council with its built-in veto to protect the great powers.

Britain is having difficulty providing development capital needed for the Commonwealth, which is increasingly becoming an association of under-developed, dark-skinned, new nations. British appreciation of the importance of this relationship is highlighted by Macmillan’s decision to visit five Commonwealth countries next January, the first time a British head of government has ever done so while in office.

The internal situation is comparatively simple and stable. The Government’s present majority should enable it to prevent a General Election until 1959 or 1960. While Macmillan has gone far to reunite the Tory Party, he has still not sold himself to the general public and if new elections were held tomorrow the Labor Party would have a larger majority than the Conservatives now have. A Labor Government would present the U.S. with certain problems although many who know Bevan¹⁶ best maintain that as Foreign Secretary he would be much more reasonable than he has been in opposition. The Labor Party is far from united, particularly on such issues as nationalization, the H-bomb and the Soviet bloc.

Economic considerations have a decisive effect on British policy and problems both internal and external. Britain must “export or die” and this adds considerably to their determination to release manpower from the armed forces for productive work. The need to economize has become a continually more dominant consideration. Thus when the new defense policy has been carried out their overall strategic reserve will be smaller than the troops now in Cyprus. The problem of inflation is also a growing concern and the Government has so far been unable to control or halt it. This issue may well determine the results of the next General Election.

In sum, while Britain is beset by grave economic problems her internal situation is stable. Her foreign policy has been shaken by Suez and her relations with the U.S. are not what they were before, but Britain is moving toward more realistic policies which although they confront us with certain problems may result ultimately in a more effective ally.

Canada

After brief discussion, Mr. Jones asked Ambassador Merchant for a statement on the current situation in Canada. Ambassador Merchant pointed out that Canada constitutes our most important market with about 25 per cent of both imports and exports and that we are in this respect even more important to Canada, having about two-thirds of their imports and exports. Our trade with Canada exceeds that with Western Europe and also that with Latin America. In the post-war diplomacy Canada occupied a unique position as a member of the Commonwealth and a neighbor without a colonial past or geographical pretensions whose influence has been exercised mostly in support of U.S. objectives. Her territory and resources are essential to our military defense.

We have major and growing problems with Canada stemming in large part from our economic relations and partly from the recent change in Government.¹⁷ The Conservatives are more nationalistic than the Liberals and more pro-Canadian which can merge into anti-Americanism. They are more protectionist and will try to direct more of the trade and commercial relations, if possible, to the United Kingdom. The diversion of 15 per cent of their trade with us to United Kingdom as mentioned by Diefenbaker, would however, more than double their trade with Great Britain and is hardly a realistic objective. They will, however, try hard to reduce their dependence on us. They will give us less support in the U.N. and will be less articulate and influential. The Conservatives by no means shared the Liberals’ attitude about Suez. While their Cabinet is totally inexperienced in Government, there is a strong civil service and with six to eight months more experience the new individuals in the Government should be on top of their respective jobs and then may well realize the difficulty of their many problems and that the range of choices for solution is limited. If they can avoid committing themselves too far by published statements in the meantime, they may be more responsible people with whom to deal.

Our principal economic policy which gives them concern is what they call our “give-away policy” on wheat¹⁸ which is illustrated by the fact that the hundred million bushel reduction in our wheat surplus in the year ended July 1st was matched by an equal increase in the Canadian wheat surplus. Wheat affects their economy more than ours and this situation has literally hit people where they live since the grain elevators are full and the farmers cannot get paid until the grain is delivered.

The next most important problem is the adverse trade balance with the U.S. (almost 1-1/2 billion dollars last year). The Canadian dollar has gone to its highest premium since 1868 because of the huge influx of capital investment funds from American sources which although it has benefited them locally, causes much disquiet because of a feeling that control of their economy is slipping away from them. They complain that they are not allowed the opportunity to buy stock in the Canadian subsidiaries which are set up by American firms and that too many decisions affecting them are taken by the parent companies in America.

While the Norman case was a transitory factor it was the outlet for universal and sometimes bitter anti-American feeling, although after Norman’s suicide there were indications of second thoughts.¹⁹ The case is symptomatic of a latent but basic resentment against the power and wealth of the U.S.

While the new government will probably not abandon its obligations under GATT there is likely to be a gradual yielding to various protectionist pressures and this has already begun. Finally, the boom has begun to taper off. Unemployment has risen, residential and industrial construction are down and interest rates are high.

In the future Canada’s participation in international affairs will probably be less imaginative, constructive, active and helpful to the U.S. They will show greater sensitivity toward us. There are indications anti-Americanism will be exploited by the Liberals as well as by the Conservatives. It seems likely that this Government will arrange another election next spring or early summer and may well come back with a majority. Many who opposed the Conservatives at the last election new find them acceptable. We must be prepared to see them in power for at least five years.

Nevertheless they will continue as a sound and reliable ally. Support for NATO is truly non-partisan. In general they tend to see the world through our eyes and they appreciate the geographical realities of their defense situation. They believe in free enterprise and we need have no fear that they will abandon us.

In subsequent discussion Ambassador Merchant expressed the opinion that the Canadians might undertake a limited PL 480 type of arrangement for the disposal of surplus wheat through the Colombo plan,²⁰ particularly to Pakistan and India but did not believe they would compete with us for the disposal of surpluses.

He thought the principal reason for the Liberal election defeat was that there was a general sense that the time had come for a change and the Liberals had run a stupid campaign. Moreover, Diefenbaker struck a profitable issue when he criticized the Liberal contempt of Parliament as underlined by the fact that one-half of the Cabinet members has lost their seats.

The luncheon break then took place.

Finland

Ambassador Hickerson stated that the survival of Finland as a free nation is a near miracle. Despite a long history of Russian rule (for more than a hundred years before 1917, Finland was a Russian Grand Duchy), the Finns have retained their national characteristics. Russian cultural influences, including even architectural styles, are notably lacking in Finland.

As a result of its defeat in two wars with the Soviet Union Finland lost 10 per cent of its territory. Rather than live under Soviet rule virtually the entire population of the ceded areas (also approximately 10 per cent of the national total) moved across the new borders into Finland. As a consequence Finland in the post-war period was burdened with the resettlement of these people at the same time that it was faced with reconstruction of war damaged areas and was having to pay heavy reparations to the Soviet Union. Reparation payments were completed in 1952.

There are only 30 to 40,000 hard core communists in the country, but nevertheless the communist controlled SKDL Party polled nearly 20 per cent of the total vote in the last elections. In the immediate post-war years the Finns moved cautiously in dealing with the communists, but in 1948 they ousted the last communist member of the Government.

There are six parties represented in Parliament and none of them has a majority. As a consequence Finland has had a series of coalition governments including usually the two largest parties, the Social Democrats and the Agrarians. Governments are generally weak and this fact, along with the effects of war and the burden of reparations, explains the economic difficulties which Finland has been experiencing. The Finn mark was devaluated by 39% this week in an effort to ease the country’s financial crisis. This action was preceded by a price freeze and the imposition of an export tax. Ambassador Hickerson said that while Finland has serious economic problems these problems can be solved. The next twelve months, however, will be difficult.

With respect to foreign affairs Ambassador Hickerson said that the biggest influence in Finnish foreign policy is the fact that Finland has a 700-mile frontier with the Soviet Union. He expressed the opinion that the Russians will respect Finnish independence to the extent of refraining from using physical forces. Finland for its part is bound by the non-aggression pact not to permit its territory to be used as a base for an attack on the Soviet Union. Finland, therefore, pursues a policy of neutrality and avoids involvement in disputes between the great powers. Ambassador Hickerson said that the Soviets rather than using force would attempt to seduce the Finns. This effort would take at least two generations and by that time the character of the Soviet Union itself might well have changed. At the present time, the Finns regard the Russian people rather than Communism as the real menace.

Finnish armed forces are severely limited by the peace treaty.²¹ For prestige reasons Finland would like to have these limitations lifted. It is probable that it will raise the questions eventually, even though at the moment economic circumstances preclude an expansion of the army.

Ambassador Hickerson said that one of the most serious developments in Finland has been the split in the Social Democratic party, a split that initially involved personalities rather than fundamental principles. It is essential that the Social Democrats get together, but so far there is no evident that the communists have gained voting strength as a result of the split.

Communist propaganda is active and is carried on through a Helsinki newspaper with a circulation of 50,000 and in a half dozen smaller papers in other cities. The Soviets also arrange and largely finance a very extensive exchange of persons.

Iceland

Ambassador Muccio stressed the importance of Iceland from a military strategic point of view to the United States Air Force and to SACLANT. The Soviet Union also recognizes the importance of Iceland to NATO defense and has made a sustained effort to split Iceland from its NATO partners.

Ambassador Muccio said that the United States has three basic objectives with respect to Iceland: 1) to maintain United States forces and facilities in the country, … and 3) to reduce Soviet economic and political influences. The Ambassador reviewed developments since the break up of the Independent-Progressive Government in March 1956 leading up to the national elections of June and the request for withdrawal of United States forces. The United States-Icelandic negotiations of last November resulted in the withdrawal of this request. He said that the United States position in Iceland is better today than before the crisis. Four-fifths of the population is on the side of the West and hard core communists have dropped in the last year from 1,000 to approximately 500–600. The communists have also suffered some losses in the labor movement.

Iceland was the first NATO country to admit communists to government. At first we felt that we could not deal with such a Government. This policy was later altered. … The communist influence in Iceland is based on their control of the Icelandic Federation of Labor which they took over in 1954. Furthermore they have complete control, and have had for twenty years, of the largest union in Iceland, the non-skilled. During the past years there has been less friction among the three democratic unions which has resulted in an improvement in the position of the democratic trade unionist vis-à-vis the communists.

Ambassador Muccio said that the United States should take a firm but understanding position toward Iceland. It was the Icelandic Government which took the initiative of raising in NATO the question of trade with the Soviet bloc. The Democratic ministers in the government have proved in the past year that they can control the communists in government on security and foreign policy matters.

In the discussion which followed Ambassador Muccio’s remarks, Ambassador Perkins said that there was a fair chance of the NATO countries giving assistance to Iceland, particularly if the United States were to do so. He also mentioned the possibility of Germany alone providing the required assistance. Ambassador Muccio said that an assurance that the West would help if the Russians abruptly cut off taking Icelandic fish would be of great value to Iceland.

Norway

Ambassador Willis stressed the strategic importance of Norway with its numerous protected harbors and its airfields close to the Soviet Union. Furthermore there is a close relationship between the security of North America and Norway since a Soviet air attack by the shortest route would pass over Norwegian territory. Norway thus takes on importance as a part of the early warning system. Finally Norway, though a small country from the point of view of population, nevertheless has the third largest merchant marine in the world.

Ambassador Willis said that it is important to remember that Norway as an independent country dates only from 1905. As a consequence it retains the strong feeling of nationalism characteristic of young countries. We must be careful in our relations with Norway to respect these sensitivities, remembering that this nationalism stiffens the Norwegians in resisting Soviet pressures. Nationalism was one factor in the Norwegian decision not to permit the establishment of foreign bases or the stationing of foreign armed forces on her territory except in the event Norway was attacked or an attack was imminent. In addition to this factor there is a strong Norwegian pacifist-neutralist tradition. The experiences of World War II dislodged the country from its neutralism and caused Norway to accept membership in NATO. Nevertheless neutralism and pacifism remain latent in the country. Ambassador Willis said that approximately 20% of the membership of the Labor Party is tinged with pacifist views. This explains in part the strong support in Norway for disarmament. There is also real concern about the danger of atomic fall out. It is also worth noting that the Labor movement in Norway was originally strongly leftist and many of the early leaders were communists, but having been disillusioned are staunchly anti-communist. The Norwegian Labor Party is now probably farther to the right than the British Labor Party. It is not doctrinaire and advocates no further nationalization. It believes rather in planned economy and the welfare state.

Norway is bound to the West by strong traditional ties enhanced by its position as a trading nation. Furthermore the emigration of many Norwegians in the past to the United States has strengthened these ties. At the same time the geographic proximity of Norway to the Soviet Union obliges Norway to seek to maintain as good relations as possible with the Soviet Government. The Soviet Union regards Norway as a key country and has employed blandishments and threats in an effort to separate Norway from its NATO partners.

Norwegian foreign policy is based on strong support for the UN and NATO. Most Norwegians recognize the necessity of NATO membership, but they are unenthusiastic about defense expenditures. With a weaker government it might be difficult to maintain the current level of expenditures on defense in competition with the demands of the welfare state. The Defence Committee of Parliament supports the idea that defense should continue to receive a constant share of the increasing GNP, but the full Storting has not indicated its accord. Norway must continue to look to the United States for military assistance if she is to maintain modern armed forces.

Ambassador Willis pointed out that Norway is a small country with a population of only 3 1/2 million and a gross national product of $4.1 billion. To judge by election results since 1935 Norway prefers a mild form of Socialism to outright Capitalism. In spite of the differences in political philosophies and our relative strength if we exercise wise leadership in the UN and NATO we can continue to expect close cooperation from Norway.

Denmark

Ambassador Peterson stated that the hard-working and proud Danish people have a high level of culture and education and by their own efforts have made themselves reasonably prosperous. They have learned the uses of patience in their foreign relations. In view of the strong trait of neutralism after the Napoleonic Wars it was an important step for them to join NATO. The five democratic parties are pledged to support NATO in the UN although there is still some neutralism in the radical Liberal party. All but the Communists are pro-Western and sympathetic to the U.S.

Danish defense expenditures will be about the same next year as last but reduction in the future must be anticipated as other countries reduce their expenditures. In spite of the many parties there is an underlying homogeneity in the country which makes the country stable. As a small country without ambition the Danes are relaxed and objective in their world views and could well serve as a sort of conscience for us, being as democratic as we are. The Arkansas situation has caused much discussion in Denmark.²² A still outstanding issue is our failure to pay the five or six million dollars involved in their claim for ships taken over early in the war. They are also critical of the 50–50 requirement of PL 480²³ (shipping is an entirely private industry). They have also shown a sensitivity on our quota system on cheese imports.

Denmark is a welfare state. It remains very short on housing and there is some unemployment. In order to protect reserves they have recently provided for the limitation of dividends and for forced purchases of bonds. They join in our dislike of Communism but feel that we sometimes reflect an immaturity in our approach to the problem.

Sweden

Ambassador White stated that the Swedish people are anti-Russian qua Russian, and feel the threat is from Russian imperialism rather than Communist theory. They do not consider themselves neutralist but say that their policy is one of non-alliance. They would have joined a Nordic alliance if the other members had stayed out of NATO. Swedish politics are very stable. They have a coalition government with social democratic leadership. There is a possibility that the forthcoming referendum on pensions²⁴ may cause a breakup of the coalition if the social democrats win, by a withdrawal of the Agrarian Party. The Swedes do not wish to antagonize the Soviets. Their relations with the Finns are close. One of the reasons that they do not wish for too close ties with the West is their fear that the Soviets might move into Finland and thus put the Soviets on the Swedish border. Their dislike of the Soviets has been increased by the recent spy trials and the Wallenberg case.²⁵

They have an excellent air force, high in the percent of combat officers and planes and considerable armament for a nation of their size.

Their economy is sound although the debt has gone up recently.

Their relations with the U.S. are cordial and close and at the presentation of his credentials the King told Ambassador White there were no problems between the two countries and relations could not be better.

Ambassador White then asked Mr. Cochran if he had any supplementary remarks. Mr. Cochran pointed out that the Swedes had been greatly upset by the Hungarian episode. They have taken proportionately more refugees and contributed proportionately more in relief than the U.S. While no return visit²⁶ by Khrushchev is likely there will be no changes in their policy toward the Soviet Union.

They are now debating whether they should undertake to produce the atomic arms which they are technically able to produce. The costs would be heavy. Their economy is socialistic with emphasis on welfare rather than nationalization, the only exceptions being railroads, telephone and telegraph and some iron ore. They do not welcome foreign investment. There is overemployment and there is also a difficult housing problem. Sweden’s greatest difficulty is that after 30 years of the welfare state there seems to be a lack of incentive to work and save. They are emotional about our treatment of the negro problem and the 50–50 Public Law 480 shipping clause. They also resent our hiring away of some of their technical brains.

Mr. Cochran saw our problem of relations with Sweden as largely a holding operation.

Ireland

Ambassador McLeod pointed out that the economy of Ireland is almost entirely agricultural. There has been some increase in industry and there are some hopes for tourism. Ireland lacks capital and is about to amend its law to reduce the requirement of Irish ownership from 51% to 25%. Their currency is tied to the pound.

Partition is a strong emotional issue which pervades the country. Ambassador McLeod also alluded to Foreign Minister Aiken’s ill-timed and ill-conceived maiden speech in the U.N. General Assembly.²⁷

He concluded by remarking that the Irish hate socialism but are forced to socialist methods since their lack of capital and absence of savings forces most initiative to be undertaken by the Government.

Soviet Altitude Toward the Scandinavian Countries

Mr. Jones then asked Ambassador Thompson to present the Soviet attitude toward the Scandinavian countries. Ambassador Thompson pointed out that Soviet policies have, in general, remained principally the following:

1. Maintaining the security of the regime.

2. Retaining Soviet control of the Satellites and solidifying the Sino-Soviet bloc.

3. Disrupting the Western Alliance and forcing withdrawal of U.S. forces.

4. Extend Soviet diplomatic and political influence, especially in uncommitted areas.

Ambassador Thompson pointed out that objective 4 is particularly relevant in relation to the U.K., which is a prime target and symbol in its colonialism for Soviet attack.

Objective 3 is particularly relevant with respect to the Scandinavian countries. The Soviets would probably maintain the policy of “carrot and stick” but threats are likely to increase and the Soviets will hammer away at neutralist sentiments.

They have shown great resentment at the NATO agreement to set up a Baltic command and the “sea of peace” project²⁸ is a counter to this. Since their determination to maintain the division of Germany has not abated they will in this connection continue to seek the recognition of East Germany and will maintain pressure against the Northern countries to this end. They may also be influenced by military and strategic considerations which are not entirely clear, possibly including fear of missile-carrying subs in the Baltic. So far their threats against the Northern countries would seem to have been a miscalculation.

Mr. Jones then adjourned the meeting until the following morning at 9:30 a.m.

USIS

Mr. Jones opened the meeting on September 20 and called upon Mr. Clark to speak on the agenda item concerning the USIS.

Mr. Clark said that there is a trend in Congress to de-emphasize USIS activities in countries considered friendly toward the United States. The severe budget cut by the last session of Congress is evidence of this fact. Mr. Clark questioned the idea that friendly countries will remain friendly if we do nothing about it. He expressed the strong conviction that the activities now performed by USIS are and will continue to be an integral part of Embassy functions.

In the discussion of the U.S. Information Service programs in the area which followed, it was the consensus that there is a continuing need for adequate information and cultural programs in the so-called friendly countries, which include all of Northern Europe. It was agreed that USIS is an essential and integral part of the official representation of the United States abroad and that these operations have been fully integrated into the respective Embassies. It was agreed that the recent budget cuts affecting the USIS programs in Northern Europe had been serious. Fear was expressed that any further reductions would result in cutbacks beyond the minimum level considered necessary, and would mean that the regular Embassy staffs would be forced to assume certain responsibilities in the press and cultural fields which normally should be discharged by USIS. This would create a further burden on their own staffs and would interfere with essential political reporting.

The meeting considered of particular importance:

1. The continued operation of USIS libraries which are the symbol of American interest in the cultural life of Northern European countries and reach important elements of the population which cannot be reached otherwise.

2. Urged immediate reconsideration of the decision not to continue presentation subscriptions of the New York Herald-Tribune and New York Times to leaders in political, cultural and trade union circles. The sudden closing out of this activity denies access of this unofficial window of the U.S. to the very people with whom the Embassies are in closest touch. It was agreed that foreign leaders would not purchase these papers but would read them if they were presented.

3. The maintenance of an adequate and stabilized USIS program.

Ambassador Thompson emphasized the need to increase the number of hours of English-language broadcasting to the USSR, pointing out that these programs would have a major influence on very important target groups. He also outlined the need for informational material for distribution to selected members of the Diplomatic Corps, particularly Asian and Middle East, who are cut off from access to almost all Western materials while in Moscow.

Ambassador McLeod emphasized the need to have at least one cultural or Public Affairs Officer assigned to Dublin to meet the essential needs of his mission.

Ambassador Merchant cited the special circumstances in Canada which make it undesirable to have an information program.

After a discussion of exchanges with the Soviet Union and the Satellites, it was agreed that it would be most helpful to the Chiefs of Mission to have a policy statement from the Department on East-West exchanges, since Foreign Governments were constantly asking about our position in this respect.

There was unanimous agreement on the value of the U.S. Exchange of Persons programs in the various countries. Certain Fulbright programs were drawing to an end and it was recommended that ways and means be explored to continue these essential programs either through appropriated funds or through sales of surplus commodities on which the foreign currencies would be earmarked for exchange financing.

Conference on the Law of the Sea

At the request of Mr. Jones, Mr. Sanders then gave an outline of the situation with respect to the forthcoming conference on the Law of the Sea in Geneva on February 24, 1958. Mr. Sanders explained that the policy decisions upon which instruction would be based had not yet received final clearance although the U.S. position in most respects has been fairly well established. He went on to say that 89 countries had been invited to the conference which was being held under a U.N. General Assembly resolution which was sponsored by the U.S. and 22 other countries. In addition to certain broad political considerations, our motive in sponsoring the conference was to get the discussions out of the political forum and before a properly equipped scientific and technical meetings.

The conference will consider a report prepared by the International Law Commission covering the law of the sea in time of peace and containing 73 articles. It will involve not only legal considerations but biological, scientific, technical and political elements.

The principal fields to be covered are the Continental Shelf, International Fishing Rights and the Problems of the High Seas and the Territorial Waters.

As to the Continental Shelf, it will be necessary to define the submarine areas covered by it and to define what constitutes a natural resource of the shelf. For example, we are in conflict with Mexico which claims shrimps as a natural resource while we have maintained that natural resources must be permanently attached to the shelf.

With respect to the High Seas, we may anticipate difficulty with the Soviets on the subject of privacy based on the activities of the Chinese Nationalists’ Government blockading Chinese Communist ports. It also involves the question of pollution from radio-active waste and the use of large areas of the High Seas for weapons experiments.

The question of International Fishing Rights is linked to Territorial Waters. A small extremist group, including Chile, Peru and Ecuador which do not possess a continental shelf claim a zone two hundred miles in width. This group bases its claim principally on alleged concern for the conservation of the resources of the sea. On the other hand, Argentina claims the waters above the shelf, which extends five hundred miles to sea. In general the moderate group is moved by economic considerations and demands special or exclusive to stand on the three mile limit without contiguous zones for fisheries. The U.S. supports in general the articles proposed by the ILC on fishing and conservation which give the coastal state certain qualifying rights which enable it to take unilateral action for conservation purposes when there is a failure to agree with other states but then only on basis of scientific and technical evidence and of a prior agreement to arbitrate disputes as to the facts. It is anticipated that the U.S. will submit certain additions to the ILC articles concerning the principle of abstention and the arbitral procedure. While the Commission’s proposals represent a concession to the claims of the coastal states, they would be unacceptable to the extremists and do nothing to meet the claims of the moderates based on economic considerations. The principal dangers to the U.S. position would come at the conference from a joining of forces between the extremists and the moderates in terms of a modest extension of the territorial sea with the recognition of broad contiguous zones for fisheries or conservation. The traditional position of the U.S. on this question is being reviewed in the light of this possibility. However no decision has been reached. It has been suggested that discreet inquiries be undertaken to ascertain the acceptability by enough states to ensure majority support of a formula which would maintain the territorial sea at three miles but recognize six, nine or twelve miles of contiguous zones for fisheries. Should this suggestion be approved the inquiry would be made on a highly selective basis. Every effort would need to be made to avoid giving the impression that the U.S. is contemplating a change in its traditional position.

In the ensuing discussion Mr. Sanders pointed out that our insistence on the three mile limit is based in large part on security considerations. A look at the basic difference between U.S. and U.S.S.R. naval power gave the key to the issues at stake. The U.S. wishes the maximum area of operation for its carrier-based aircraft. An extension of the three mile limit will diminish this area, and at the same time increase the area in which Soviet submarines could operate. It was also pointed out that an extension of the three mile limit would convert certain waters, such as the Aegean Sea, into virtually enclosed lakes. There were a number of such considerations and these would be developed in the instructions to the field now being prepared.

Mr. Sanders pointed out that as a very rough estimate it appeared that only 18 out of 89 countries could be counted on to stand firm on the three mile limit and there was even some variation of attitude among them.

Mr. Barbour pointed out that any extension of the three mile limit would undoubtedly reopen the difficulties with respect to British trawlers fishing in Icelandic waters.

Mr. Sanders expressed the hope that the conference would agree to confine itself to seeking multilateral agreement on basic principles and rules and would exclude the airing of bilateral controversies, including such matters as the Gulf of Aqaba.

Mr. Sanders concluded by pointing out that is is basic to out position that conservation can be achieved only by international cooperation and not by unilateral action. The reasons for our position on this and other issues have a complex scientific and technical basis and it is therefore important to get the full statement of our views with supporting data circulated among the particular countries without delay.

Foreign Economic Policy

Mr. Randall outlined the organization of the White House and described the responsibilities and functioning of the Committee [Council] on Foreign Economic Policy of which he is chairman. In brief he said that the Council is concerned with problems which cross Departmental or Agency lines. The chairman may initiate study of a particular subject or a study may be requested by an individual Department of Agency.

At the moment legislation to replace the expiring Trade Agreements Act²⁹ is under consideration in the Committee. In this connection Mr. Randall mentioned the strong resurgence of protectionist sentiment in the United States. The rapid industrialization of the South has meant an increase of protectionism in an area which traditionally has supported liberal trade policies. The Administration has not abandoned the effort to obtain ratification of the OTC, notwithstanding the difficulties experienced in the last session of Congress.

In discussing the Mutual Security Act Mr. Randall stressed the importance of approval for the first time by Congress of an aid appropriation which does not have to be committed during the year for which it has been appropriated. The $300 million Development Fund appropriation for fiscal year 1958 need not be re-appropriated if not committed this fiscal year. The Congress also authorized $625 million for fiscal years 1959 and 1960. It is difficult to forecast how the Development Fund will be administered and its relation with the IBRD and the Eximbank are still to be worked out. Loans by the Development Fund may be made to countries which are not members of the IBRD. The loans of the Fund will not be subject to the Buy American restrictions which apply to Eximbank loans.

The Mutual Security Act further provides $200 million for emergencies which gives the aids program additional flexibility. While the Battle Act³⁰ applies to the $300 million Development Fund, up to $200 million other aid funds are free of the Battle Act restrictions. The Administration was unsuccessful in securing a transfer of defense support costs to the defense budget as recommended by the Fairless Committee.³¹

East-West trade is another subject which has engaged the attention of the Committee on Foreign Economic Policy. Present United States policy is based on recognition that on the multilateral side the Chinese differential has disappeared. We will not endeavor to restore the differential multilaterally, but we will attempt on a bilateral basis to encourage the maintenance of a differential on trade with Communist China. On a unilateral basis we will continue the trade embargo.

Mr. Randall in discussing PL 480 emphasized that it is a temporary expedient to reduce surpluses, and the Administration is committed to an early termination of the program. The Committee on Foreign Economic Policy will consider the question of a further extension of PL 480 and in what amount. Mr. Randall said that despite the publicity given in the press to Mr. Hollister’s recent statement on United States aid policies there had been no change in these policies.³² The press comment had been misleading. Granting loans to foreign nations presented problems of selection and as a consequence we have in the past given funds to Governments which have then determined the recipients.

The Committee on Foreign Economic Policy has been studying the problems presented by Soviet economic penetration in the underdeveloped countries. The Committee meets every three months in a session devoted exclusively to this subject. Mr. Randall said that so far the American business community is not generally aware of the danger to our future markets which Soviet technicians and the trade promotion in which they are engaging constitute.

In the discussion which followed Mr. Randall’s remarks it was suggested that a greater effort should be made to explain to the American public the need for foreign aid. This suggestion was prompted by evidence of growing opposition to foreign aid, based on a lack of understanding of the objectives and purposes which it serves.

Ambassador Thompson mentioned the suggestion made in Austria that the OEEC be employed for provision of aid to Poland and to the under-developed countries. Mr. Thompson said that this suggestion appeared to have merit. The Soviet Union has an advantage over the United States in being able to supply a market for the products of these countries. Through the OEEC markets might be supplied to a country such as Poland thus counterbalancing this Soviet advantage. Mr. Randall said that this question was not under current study but he mentioned United States objections to the provision of aid through multilateral channels. Ambassador Perkins commented that there were many cases where our objectives can be better served by employment of a multilateral method.

At the conclusion of Mr. Randall’s remarks there was a luncheon break.

United Nations

Mr. Walmsley opened his discussion of national attitudes toward the U.N. and the U.S. role therein by exhibiting a number of slides graphically representing the voting in the U.N. General Assembly on the Hungarian issue, French Togoland, Middle Eastern cease fire and withdrawal, the resolution deploring Israeli non-compliance, the stationing of U.N.E.F., Chinese representation and the Soviet complaint against alleged U.S. intervention in Eastern Europe.

Mr. Walmsley discussed the voting pattern indicated by the slides and pointed out the variations in them.

He then noted certain additional questions confronting the U.N. General Assembly in the 12th session including the question whether the French can terminate their trusteeship of the Togoland and the refusal of Portugal and Spain to respond to the request for reports on their colonies. He went on to say that elections will take place for three new members of the Security Council, one European, one Latin American, one formerly “Eastern European” which it is now hoped will be Japanese. He pointed out that the disarmament item will also come up; it is hoped this year to obtain a 2/3 endorsement of the Western proposals. Other items are the question of Palestinian refugees and the repayment of advances for the clearance of the Suez Canal. The latter item is complicated by the British and French claim for work done before their withdrawal. It was noted that progress is being made toward a compromise proposal for the solution of this problem which is now before the Secretary General whereby their claims for work done before General Wheeler³³ took charge of the clearance would be deferred. The question remains of suitable arrangements for the collection of a voluntary surcharge.

Mr. Walmsley said that the U.S. delegation would put forward a compromise proposal with respect to SUNFED.³⁴

He stated that British representative on I.L.O. is about to retire and that the hope has been expressed that it would be possible for the U.S. to arrange Government representation on I.L.O. which will be both at a high level and give assurance of continuity, and it is hoped that the Department is giving consideration to this.

Mr. Walmsley drew attention to public opinion polls taken last winter, which indicated a high degree of support in the U.S. generally, and also among college students, for the U.N. He pointed out that the only serious cut in appropriations by Congress for U.N. purposes had resulted indirectly from the 40% cut in appropriations for international contingencies. On the other hand the Congress permitted us to phase the scaling down of our contribution ceilings to U.N. agencies to the statutory level of 33-1/3%.

He said the membership of the U.N. is now 82. The most serious result of this is that the Asians and Africans, with 35-1/3% of the membership of the General Assembly, now have a veto on all substantive resolutions. The Africans and Asians plus any 14 Latin Americans can muster a clear majority. The Africans and Asians, together with all the Latin Americans and the Soviet bloc, can adopt any substantive resolution by 2/3 majority.

He concluded by pointing out that despite the many overwhelming votes against the Soviet bloc, the Soviet Union shows no signs of withdrawing from the U.N. and in fact they and their satellites are increasing their participation in the specialized agencies. However distasteful the new voting pattern may be, we must recognize that events have forced us to attempt to do things in the General Assembly that the Charter did not originally contemplate, and that we will have to live with the U.N. which is here to stay.

In the discussion which followed, Ambassador Merchant and Mr. Barbour both emphasized the disillusionment in Canada and Britain with the U.N. Ambassador Merchant pointed out that our veto power has now gone or is at best unreliable. Mr. Barbour pointed out that the British feel that in a showdown the U.S., out of its desire to placate the Asians and Africans, cannot be counted upon.

Mr. Jones expressed the belief that, with the exception of the U.K., the U.S. has few outstanding political problems involving the U.N. with the countries of Northern Europe. It was noted that the question of Chinese representation is an exception to this general situation.

Ambassador Willis pointed out that it is damaging to the prestige of the U.S. to seek to change the established position of countries such as those of Scandinavia in the hope of obtaining majorities on all issues before the U.N. It was suggested that less emphasis should be placed on getting majorities for their own sake, that we sometimes show too much fear of being out-voted and that it is damaging to our interests to seek to change the vote of a country which has an established position which we know it will not change.

It was brought out that an effort should be made to get information to American Missions about the performance of delegates to the U.N. General Assembly from the countries to which they are accredited. It would be preferable if such information could be received as currently as possible while the General Assembly is in session but would be useful even at the end of a session.

Ambassador Willis pointed out the importance of receiving from the Department adequate material to enable our Missions to present and explain in simple terms our position on disarmament, since the Soviet position is made to appear simple and ours complicated.

European integration

Mr. Timmons summarized the current situation with respect to European integration and the national attitudes of interested countries with respect to it. He pointed out that a 10-year cycle has now been completed since the beginning of the work of the OEEC toward trade liberalization and the multilateralization of credits. During this period the feeling developed among the six countries of Benelux, West Germany, France and Italy that cooperation between governments is not enough and has resulted in establishment of the Coal and Steel Community and the treaties soon to come into force creating EURATOM and the Common Market. These have the effect of associating Germany with the West on a basis of equality. He pointed out that the Six are, in a sense, ambivalent toward the British whose motives they have suspected but whom they also wish to have in the closest possible participation. A revolutionary change, however, has taken place in British thinking, as indicated by the FTA proposals of July 1956, even though the British cannot accept supranational institutions and wish to exclude agriculture from the FTA and protect their trade with the Commonwealth.

The United States favors the development of the Six and the integration of Germany by organic ties to the West in such fashion to prevent the revival of the French-German conflict. We aspect to give all appropriate support to the communities of the Six, which we regard as the key to the developing unity of Europe. He stressed the deep personal interest of the President and the Secretary of State in these developments.

In spite of rumors to the contrary, we also strongly support the OEEC which is a framework and a transmission belt for associating the Six with the other OEEC countries of Western Europe.

He summarized the present situation with respect to ratification and noted that the treaties are likely to go into force on January 1, 1958. There may be a meeting of Ministers of the Six toward the end of this year to decide on the location of the various bodies of EURATOM and the Common Market and the personnel which will make up their commissions. Ambassador Butterworth thinks that the resignation of Mayer as Chairman of the High Authority of the Coal and Steel Community may well mean that a German will succeed to this post with a Frenchman as Chairman of EURATOM and a national of one of the Benelux countries as Chairman of the Common Market.

The United States would like to see the executive agencies of the three communities of the Six located in one place, such as Luxembourg. There is opposition, from the Germans and others, to their being in Paris. It seems likely, however, that at least one of the communities may be set up in a separate location, such as Brussels.

The Common Market will constitute a real customs union with the complete elimination of internal trade barriers (except for agriculture), a common external tariff, and a common commercial policy toward the outside would, as well as harmonized social charges to be established by the end of the “transition period”, which is 12 to 15 years. There are also provisions that will, by European standards, go quite far for the elimination of restraints on trade. Goods from overseas territories will move freely into the Common Market but not, as matters now stand, to the Free Trade Area.

While EURATOM and the Common Market authorities have less supranational powers than the Coal and Steel Community they nevertheless represent important progress. Their assemblies lack general legislative power but will have the power to censure officials of the executive bodies and force their resignation.

With respect to the Free Trade Area, it was pointed out that the British wish agriculture to be excluded while the Six wish it included, but that there seems to be room for eventual compromise. Another difficult problem will be the “definition of origin” of goods, with problems arising out of the French high tariffs on raw materials, the general British absence of tariffs on raw materials and the fact that such countries as the Netherlands have agreed to forego the advantages they would derive from their present low tariffs on raw materials by moving to a common external tariff. Another problem is the problem of how to associate the less-developed countries (Greece, etc.) with the Free Trade Area.

In conclusion Mr. Timmons said that our attitude toward the Free Trade Area was similar to that toward the Common Market and EURATOM. We are optimistic that these developments will result in a stronger Europe, politically and economically, and hope that they will result in no increase and even a decrease in protectionism.

Mr. Barbour commented that Embassy London is now convinced that Britain is behind the Free Trade Area and prepared to give it leadership and is acting in good faith. Divisions that existed in the British Government initially now seem to be overcome. While the problems of agriculture and trade with the Commonwealth still remain, there are hints of growing flexibility.

A discussion then took place of a proposal for a Nordic Common Market and it was the consensus that the Scandinavian countries preferred to organize a Nordic Common Market first before considering their entry into the Free Trade Area.

Ambassador Merchant pointed out that the new Canadian Government is much more cool toward these developments than its predecessor and would regard British entry into a Free Trade Area with alarm and disappointment if this trend were to go farther, but would probably accept the situation if agriculture is excluded.

Ambassador Perkins pointed out that Turkey, Greece, Portugal, Iceland and Denmark do not see how they will be able to participate in the Free Trade Area, at least without assistance. But if the Free Trade Area should be set up with four or five countries around the Common Market joining it, and the above-mentioned countries not joining it, the result might well be to wreck the OEEC.

Mr. Jones then announced that the substantive work of the conference had concluded and that a further short meeting would be held the next morning to consider the conclusions and recommendations.

At the following day’s meeting, after agreeing to the conclusion and recommendations (under separate cover³⁵), the Chiefs of Mission, on the motion of Ambassador Peterson, expressed their appreciation to Ambassador and Mrs. Whitney and Minister Barbour for their hospitality, to the Embassy Staff for their assistance, and to the secretarial staff for their work in preparing the record of the conference.

It was agreed that the Conference had been most valuable and that it would be in the interest both of the participating Mission and the Department to hold such conferences once a year.

1. Source: Department of State, Central Files, 120.1440/9–2357. Secret. Transmitted as an enclosure to despatch 712 from London, September 23.
2. For text of the Soviet statement, read by Valerian Aleksandrovich Zorin, Soviet Representative on the U.N. Subcommittee of the Disarmament Commission, August 27, 1957, see Documents on Disarmament, 1945–1959, vol. I (Washington, 1960), pp. 849–868.
3. For text of the communiqué issued by the Soviet News Agency TASS, August 26, 1957, announcing the successful testing by the Soviet Union of an intercontinental ballistic missile, see American Foreign Policy: Current Documents, 1957, p. 1311.
4. See footnote 28, supra.
5. Reference is to the Notes from the Soviet Foreign Ministry to the United States, British, and French Embassies at Moscow, April 19, 1957, proposing a Four-Power statement condemning the use of force to settle disputes in the Middle East; for text, see United States Policy in the Middle East, September 1956–June 1957: Documents, pp. 81–85.
6. Excerpts from a letter from Bulganin to the Turkish Prime Minister, September 11, 1957, warning Turkey not to attack Syria, are printed in American Foreign Policy: Current Documents, 1957, pp. 1041–1043.
7. For text of the statement on the situation in Syria by Andrey Gromyko, Soviet Foreign Minister, September 10, 1957, see ibid., pp. 1038–1039.
8. A copy of the Defence White Paper “Outline of Future Policy” (Cmd. 124), April 4, 1957, is in Department of State, Central Files, 741.5/4–557.
9. The Subcommittee of the U.N. Disarmament Commission met in London, March 18–September 6, 1957.
10. The text of Ambassador Perkins’ remarks at the North Atlantic Council meeting on September 18, 1957, is in Polto 612 from Paris, September 17. (Department of State, Central Files, 740.5/9–1757)
11. The Ambassador’s remarks were extracted and sent by Jones (EUR) to Secretary Dulles and Under Secretary Herter in memoranda of October 14. (Ibid., 120.1440/10–1457) Herter initialed his memorandum; the handwritten note “Sec saw” appears on the Secretary’s memorandum.
12. Reference is to the results of the meeting of the Presidium of the Supreme Soviet of the Soviet Union on June 18, 1957.
13. The World Youth Festival, sponsored by the Young Communist League, was held in Moscow in August 1957.
14. Reference is to a speech by Mao Tse-tung, Chairman of the People’s Republic of China, delivered on February 27, 1957, in which he advocated tolerance of diverse views.
15. Reference is to the American students who attended the World Youth Festival.
16. Aneurin Bevan, British Labour M.P.; Minister of Health, 1945–1951.
17. In a general election held on June 10, 1957, the Liberal government lost its majority in Parliament, and resigned on June 17; it was succeeded by a Conservative Cabinet with John Diefenbaker as Prime Minister.
18. Reference is to the disposal of U.S. agricultural surpluses abroad under the terms of the Agricultural Trade Development and Assistance Act of 1954 (P.L. 480, 68 Stat. 454).
19. E. Herbert Norman, Canadian Ambassador in Egypt, committed suicide on April 4, 1957, after the U.S. Senate Internal Security Subcommittee released testimony linking him with Communism.
20. Reference is to the plan for Cooperative Economic Development in South and Southeast Asia, established under the aegis of the British Commonwealth in 1950.
21. Reference is to the Treaty of Peace with Finland, signed at Paris, February 10, 1947.
22. Reference is to the September 1957 crisis in Little Rock, Arkansas, surrounding the desegregation of the Central High School there.
23. P.L. 480 required that one-half of agricultural surplus sent to a particular country be carried in American bottoms; see footnote 18 above.
24. On October 13, 1957, a referendum was held in which the electorate was asked to vote on three different contributory pension plans, each plan having been drawn up by a different party or parties. Ambassador White’s prediction as to the results of the referendum was correct.
25. The Soviet Government informed the Swedish Government on February 7, 1957, that Raoul Wallenberg, a Swedish diplomat who had been missing since the Red Army entered Budapest in January 1945, had died in a Soviet prison in 1947.
26. The Swedish Prime Minister, Tage Erlander, visited the Soviet Union, March 29–April 3, 1956.
27. Reference is to a speech by Frank Aiken, Irish Minister for External Affairs, on September 20, 1957; for text, see U.N. Doc. A/PV.682
28. Reference is to the campaign by the German Democratic Republic and Poland for the neutralization of the Baltic.
29. The Trade Agreements Extension Act of 1951.
30. Reference is to the Mutual Defense Assistance Control Act of 1951, commonly called the Battle Act after Representative Laurie C. Battle of Alabama. The act established controls on strategic trade and stipulated that U.S. aid would be cut off to any country which traded contraband items to Communist countries; for text, see 65 Stat. 644.
31. Benjamin F. Fairless was coordinator of the President Citizen Advisers on Mutual Security. Extracts for the Advisers’ Report, submitted March 1, 1957, are in American Foreign Policy: Current Documents, 1957, pp. 1514–1523.
32. For text of the statement by John B. Hollister, Director of the International Cooperation Administration, made in support of the appropriation request for the fiscal year 1958 Mutual Security programs before the Senate Appropriations Committee, August 19, 1957, see Department of State Bulletin, September 9, 1957, pp. 414–418.
33. Lieutenant General Raymond A. Wheeler, formerly of the U.S. Army Engineers, was employed to assist U.N. Secretary-General Hammarskjöld in organizing the technical aspects of clearing the Suez Canal.
34. Special United Nations Fund for Economic Development.
35. See Conclusions and Recommendations, infra.