Foreign Relations of the United States, 1955–1957, Eastern Europe, Volume XXV

248. Telegram From the Department of State to the Embassy in Poland¹

Washington, April 24, 1957—6:11 p.m.

839. Polish proposal obtain 500,000 tons wheat from US through P.L. 480 and long-term Sec. 401 loans (Deptel 794)² has created problem in US-Canadian relations re wheat. Canada fears extension to Poland of US concessional program on wheat, even though aimed at building Polish grain reserves, will cut into Canada’s future market for current consumption. US-Polish arrangement comes at time when Canada exercised over US disposal programs elsewhere in world accompanied by build-up of excessive grain surpluses in Canada and prospect of declining wheat exports.

View desirability avoiding further irritant US-Canada relations Dillon visited Ottawa over weekend consult with Minister Trade and Commerce Howe and others.³ Result was request by Canada that Poles be urged give them fairly specific and direct assurances on Poland’s imports of Canadian wheat for current consumption next two years. Canadians also indicated that while Canada not now able extend long-term credit to Poland for 300,000 tons of 800,000 ton reserve which would not be covered by proposal under negotiation between US and Poland, Canada might be in position to do so in fall of 1957 after Canadian elections.⁴

Polish delegation was informed of these developments yesterday.⁵ Replying, Kotlicki stated Spasowski and Michalowski had already made it clear to Canadian Embassy in Washington and to Canadian representative to UN that reserve stocks provided by US would not be used as substitutes for current consumption. Doubted that Polish government could go further. Unable predict imports in future because of possible variations in domestic output, which may well increase because of larger sowings arising from expectation that compulsory deliveries would be ended. Also, if specific commitments given Canada, other countries (e.g. USSR) might insist on similar assurances. Stated if US meant insist on specific commitment to Canada as condition US help this would create apprehension in Warsaw, which was very sensitive to “conditions”.

Dillon stated not question of “conditions” but of working out cooperative arrangement acceptable to Poland and Canada which would be entirely consistent with statements already made by Poles re use of US wheat for reserve. Emphasized desirability direct conversations between Poland and Canada rather than indirectly through Canadian Embassy in Washington. Kotlicki stated he not authorized negotiate with Canada, Polish Embassy at Ottawa not staffed for this purpose and perhaps best channel would be Canadian Embassy at Warsaw. (However also stated that members Polish wheat delegation to Canada are still here—one in New York and two traveling in Canada.) Any case still doubted that assurances could go beyond those already communicated by Spasowski to Canadian Embassy in Washington. Matter left that Poles would communicate with Warsaw. Kotlicki stated he satisfied that US not insisting on “conditions”. Did not comment on possibility obtaining long-term credit from Canada in fall.

FYI Canadian Embassy Washington informs us Polish assurances were very vague and should have gone through more direct channel. Fact that these assurances had been given had not been reported to Ottawa at time Dillon’s visit there. End FYI.

If FonOff raises question with Emb, suggest you point out that while US not attempting tie special conditions to US assistance, long-term or concessional nature of proposed arrangements for wheat naturally causes concern on part Canada and that anything Poland can do through direct conversations to allay Canadian fears would be most helpful to U.S.⁶

Dulles

1. Source: Department of State, Central Files, 411.4841/4–2457. Confidential; Priority. Repeated to Ottawa.
2. Telegram 794 to Warsaw, April 12, indicated that the Poles also hoped to obtain as much as $20 million worth of grain from the CCC, preferably via U.S. exporters and banks but, if this was impossible, then via triangular relationships. (Ibid., 411.4841/4–1257)
3. The meeting took place on Saturday, April 20.
4. The election was scheduled for June 10.
5. Memorandum of conversation by Kalijarvi, April 23, not printed. (Ibid., 748.5–MSP/4–2357)
6. Telegram 563 from Ottawa, April 30, reported the Embassy’s opinion that a Polish commitment to purchase Canadian wheat was essential and that the United States was responsible for maintaining pressure on the Poles to do so. (Ibid., 411.4841/4–3057) On May 16, Dillon wrote Merchant that despite U.S. pressure the Poles did not wish to commit themselves to the Canadians so far in advance. Dillon believed the Polish promise, in effect, to give Canada first chance at their external purchases over the next 2 years was all that could be expected. (Ibid., 748.5–MSP/5–1057)