138. Telegram From the Embassy in Yugoslavia to the Department of State0
550. Have just visited Foreign Minister Popovic at his request (Embtel 545).1 His purpose was to express GOY reaction to denial MFN to Yugoslavia by new trade act. His statement was more restrained and measured in tone than editorials of morning press but not less disturbing in content. Following is summary his remarks.
He could well believe administration had not wished to see this action taken. But action had been taken; it was there. Yugoslavs could not be asked to base their reactions on subtle distinctions between various branches of our government. So far as they were concerned this was action of USG and had to be treated as such.
During recent period, as he thought I would agree, they had shown great restraint and had avoided any action that could possibly exacerbate developing situation in Washington (I agreed). There was now no further point in remaining silent.
They could see only two calculations on basis of which this action could have been justified in minds of its authors: (A) That Yugoslavs were in so miserable position that this could be done to them with impunity, or (B) that they were not ever really independent at all. Both had profoundly offensive connotations. In their view this was a political action taken for purely political reasons. It was no comfort to them to know that at their expense certain other things might have happened which had positive significance.
For all of this and its consequences they were not only disappointed but profoundly concerned. It was idle to suppose that effects of this action were limited to the prospective rises in duties, that they would not be felt until the duties were changed, or that they would be limited to this immediate injury. Already, things were happening on every hand, injurious to Yugoslavia which were reflections of congressional action. In matters of their relationship to GATT and EEC, in international financial matters, et cetera, they were already encountering difficulties traceable directly to this cause. A chain reaction had set in. He gave me examples: A 5,000 ton order for soybeans from the US which could not be fulfilled; reluctance of EXIM Bank to pursue discussions with their [Page 289] representatives; cancellation in New York, for avowed political reasons, of large order for Slovenian furniture, et cetera. Even in best of circumstances there was setting in a negative inertia from which Yugoslav interests were bound to suffer widely.
Yugoslavs were simply flabbergasted to receive such an injury from us at this time. They were obliged to think back to years immediately after the war. There had been extremely unpleasant moments in our relationship then and even instances where they had seen themselves obliged to fire on our planes. Yet even at that time nothing of this nature had ever been undertaken against them. He realized statements had been made from time to time which annoyed us, but no such overt action, designed to injure us, had been taken on their side. We could understand their bewilderment and consternation at being faced with such action today.
They felt there was nothing more they could hold onto in US-Yugoslav relations. He had been obliged to report to President Tito that he was unable to assure him of stability of our arrangements for surplus food. He could never tell now when something would come up that would vitiate this entire program. He had been obliged to advise the President to look around for alternatives, as matter of common prudence.
This situation had already damaged our relations. He saw no possibility of returning to normal basis so long as the action remained in force. Even if it were repaired at early date it would be some time before all the damage, material and psychological, could be repaired. In some respects, repair might never be wholly possible for time would be marching on and even when reversal came, conditions might no longer be what they once were. On other hand, if no correction of this situation could be made, and if it were to continue indefinitely, he wanted me to understand that all the positions of our government in this country would then be seriously jeopardized.
I said I would report his statement to my government promptly and in detail. Observed I had as yet seen nothing that led me to believe that PL 480 shipments were jeopardized. Said I was persuaded administration intended to try to bring about a reversal of action on MFN when new Congress met and I thought it possible this would be made clear publicly in coming period. Pointed out that while no one expected this action would go wholly without reaction from Yugoslav side, they would doubtless have many occasions to choose whether to conduct themselves in manner that would facilitate reversal Congress decision or in manner that would further exacerbate congressional opinion, and voiced conviction former would be in their own interests.
My own analysis is that Popovic’s remarks were accurate statement of Foreign Office position but did not fully reflect extent of hurt pride [Page 290] and anger now prevailing on part of senior leaders, effects of which we may be made to feel at any time. Statement suggests no decision yet taken to retaliate sharply against our “positions” in Yugoslavia, which I take to mean libraries, cultural exchange arrangements, AID mission, Consulates, but such decision would have to be expected if PL480 were to be terminated or drastically curtailed in present circumstances.
(To me personally, Popovic was cordial and pleasant throughout. He insisted on producing refreshments, which is Yugoslav way of stressing that unpleasant statements are not to be taken personally.)
- Source: Department of State, Central Files, 411.6841/10–1362. Limited Official Use; Priority. Repeated to Zagreb and Sarajevo.↩
- Telegram 545, October 12, reported that Popovic had asked Kennan to call on him, adding that Petric had called the defeat of MFN for Yugoslavia the “lowest point” in relations between the two countries. (Ibid., 768.13/10–1262)↩