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

28. Telegram From the Department of State to the Legation in Bulgaria¹

Washington, February 19, 1964, 5:31 p.m.

392. Ref: Legtel 497.²

1. Department agrees your view that US should continue give GOB evidence that it takes overall view of dealings with Bulgaria and that US decisions on commercial transactions will be affected by general status US-Bulgarian relations.

2. It also important bear in mind that sales US surplus agricultural commodities for cash or on normal commercial credit to Sovbloc countries carry significant advantages for US including reduction CCC storage costs and improvement US balance payments.

3. Department believes best way to follow above two principles is along lines procedure followed for cotton license (Deptel 377, Legtel 490),³ where GOB given evidence Department and Legation act on important transactions in light overall relations and not automatically.

4. In light all factors (reftel, Deptel 384, point 2 above)⁴ Department believes on balance Commerce Department should be enabled inform US merchant he may proceed wheat sale. However pursuant point 1, above, Department agrees you may mention this transaction to appropriate Bulgarian official (not necessarily Foreign Minister) in manner similar to that in which you discussed cotton transaction with Foreign Minister. Request this be done earliest opportunity and that you cable response and your recommendation. Anticipate that if contract giving US space it desires Plovdiv signed as expected (Legtel 498)⁵ wheat sale should be permitted proceed.

5. Most significant transaction Department currently delaying because of political situation is application submitted CCC by US exporter for sale to Bulgaria of $8 million worth tobacco on three year credit terms. Transaction would involve private bank giving irrevocable letter credit to CCC with bank assuming all risk. Possibility EXIM guarantee not raised.

USDA desires approve this transaction soon to help dispose large surplus tobacco stocks and willing agree three year terms. Department prefers utilize this rather than wheat transaction to test Bulgarian sentiment over period next week or ten days. If situation unchanged or more favorable at end this period, would be desirable approve this transaction.

6. Department will continue review issuance export licenses for Bulgaria (Deptel 340).⁶ Legation will be consulted on important transactions as political situation warrants.

Rusk

1. Source: Department of State, Central Files, POL 1 BUL–US. Confidential. Drafted by Warker; cleared in EUR, E, and the Commerce Department; and approved by Vedeler.
2. Telegram 497, February 14, recommended that, in light of Bulgarian unwillingness to take concrete action to improve relations, the Department of State continue to consult the Embassy before issuing export licenses and that the Commerce Department continue to hold wheat negotiations in suspension. (Ibid.)
3. In telegram 377 to Sofia, February 5, the Department of State provided instructions to the Legation for discussions with the Foreign Minister on licensing issues. (Ibid., INCO–COTTON–US) Telegram 490 from Sofia, February 10, reported that Anderson had informed Bashev that the Legation had recommended favorable action on export licenses for cotton. (Ibid.)
4. Telegram 384 to Sofia, February 12, reported that the Commerce Department would issue licenses to Bulgaria and the Department of State would drop its advisory role in the process unless the Legation saw reasons for its continuance. (Ibid.)
5. Telegram 498 from Sofia, February 14, outlined Bulgarian desires for specific U.S. exhibits at the Sofia trade fair. (Ibid., TP 8–1 BUL (PL))
6. Telegram 340 to Sofia, January 19, outlined procedures for obtaining Commerce Department licensing. (Ibid., INCO–WHEAT–US 7)