Foreign Relations of the United States, 1964–1968, Volume XVII, Eastern Europe

176. Memorandum of Conversation¹

Washington, July 16, 1964.

SUBJECT

• US-Yugoslav Relations

PARTICIPANTS

• U.S.
  • The Secretary
  • EUR:EE—Nicholas G. Andrews
• Yugoslav
  • Veljko Micunovic, Yugoslav Ambassador
  • Dr. Presburger, Counselor, Yugoslav Embassy

Upon his return from consultation in Belgrade (see memcon of May 22),² the Yugoslav Ambassador on his initiative called on the Secretary. He pointed out he had spent more than a month in Yugoslavia and had seen President Tito and many Government officials.

The Yugoslav Government considered that relations with the US were normal, correct and good but that they could be even better. No serious political obstacles, as in 1962 or 1963, stood in the way of better relations. Yugoslav officials, however, saw a need for more active relations with the US, for more signs of understanding, for more results and for more contacts between the two Governments. Yugoslavia was interested in placing its relations on the same plane with both East and West.

The Ambassador then raised specific questions in our relations. With reference to prewar Yugoslav debts (bonds), he said that a Yugoslav delegation was now in Washington; negotiations were proceeding satisfactorily and this question would soon be settled definitely.

With reference to US claims against Yugoslavia for the nationalized property of US citizens, the Ambassador noted that Yugoslavia had increased its offer from $2 million to $3 million. At informal conversations in Washington recently, the figure of $3.5 million was mentioned. The Ambassador protested that if all the property in question were sold it could not fetch that sum of money. But he said that if the US would accept $3.5 million, our representative could go to Belgrade to negotiate a final settlement at this figure. The Secretary said he was not up-to-date on the details, and the Ambassador replied he was merely informing the Secretary.

With reference to a Fulbright agreement, the Ambassador said that at last both sides were close to an agreement. It might be ready for signature in September. The Yugoslav Government wished to invite Senator Fulbright to visit Yugoslavia for the occasion, and the Yugoslav Embassy was in touch with his office. The Ambassador observed lightly that in this way a new agreement would be ready for signature every month until the end of the year. He hoped that not only the existing atmosphere but also the prospect for future relations would thereby be improved. For example, Yugoslav enterprises wanted to establish more contacts with US private capital.

With reference to limitations on Yugoslav cotton textile imports into the US, the Ambassador said negotiations were not going too well. People in Yugoslavia believed that Yugoslavia was being treated worse than other states. The US was offering a quota which was less than the volume of Yugoslav exports to the US in 1962 and 1963. US agreements with other states, such as the UAR, set quotas which were higher than their exports during those years. The Ambassador, in answer to a question, confirmed that Yugoslav exports had risen in the 1961–1963 period. The Secretary then said that the US had had a gentleman’s agreement with Japan on limiting Japanese cotton textile exports to the US during the same period Yugoslav exports were rising. He also reminded the Ambassador that the question of MFN for Yugoslavia had posed a special problem. The US had treated Yugoslavia as a special case, not wanting to limit cotton textile imports from Yugoslavia on account of the MFN problem. It was his understanding that Yugoslavia was being treated as well as other countries. The Ambassador demurred. The Secretary pointed out that if Yugoslavia had had a great increase in exports in 1962, then this would account for a quota lower than the volume of exports in 1962. The Ambassador remarked that the increase in Yugoslav exports was only in the value of a few million dollars and that it was part of the general trend to increase trade between our two countries. It was difficult to explain to Yugoslav enterprises why the US quota had to be lower than the volume of Yugoslav exports in 1962 and 1963, especially since Yugoslavia was not being treated as well as other states. He was hopeful, however, that a satisfactory agreement could be reached.

The Secretary asked what the prospects were for agriculture this year. The Ambassador said that until June 15 or 20, wheat looked good but a period of exceptional heat for ten days and nights had seriously affected the crop. He believed his Government would be interested in negotiating for the purchase of more wheat.

The Secretary referred to the Rockefeller Foundation’s long relationship with Yugoslavia, mostly in the public health field since the war. The Foundation was also interested in the best ways of cultivating basic crops, such as wheat, corn and rice. Some remarkable results had been achieved in Mexico and Colombia, for example. The Foundation offered cooperation in developing research, training programs and extension services. The Secretary said he did not want to suggest that Yugoslavia was not up-to-date but he thought that, within the framework of scientific and technical contacts, Yugoslavia might be interested in inviting a Rockefeller Foundation member specializing in agriculture to visit Yugoslavia. Such ideas as he might develop might be useful for the Government to look into. The Ambassador thanked the Secretary for this suggestion.

1. Source: Department of State, Secretary’s Memoranda of Conversation: Lot 65 D 330. Confidential. Drafted by Andrews and approved in S on August 24. The source text is labeled “Part I of III;” separate memoranda of conversation dealing with East-West relations and visitors to Yugoslavia are ibid.
2. At this meeting, Rusk and Micunovic discussed the state of U.S.-Yugoslav relations and Yugoslav foreign policy objectives in other areas. Memoranda of this conversation are ibid.