Foreign Relations of the United States, 1964–1968, Volume XXIV, Africa

472. Telegram From the Department of State to the Embassy in the United Kingdom¹

Washington, October 2, 1965, 1:24 p.m.

1730. Rhodesian UDI. Following is Department thinking re possible solutions UK tobacco problem:²

1. Department and USDA could arrange PL–480 Title IV program to substitute UK requirements Rhodesian tobacco in event UDI. However, this appears least desirable. Use of this program for UK probably would have adverse psychological effects, especially other Commonwealth countries. Extension PL–480 assistance Britain would be sensitive issue here.

2. It is our expectation UK would anticipate living off present tobacco stocks—estimated at twenty-one month supply—for an interim period upward six months or more. Further, we anticipate UK would try to cover as much as possible tobacco needs from increased buying Commonwealth sources and purchase enhanced quantities soft currency sources before resorting to US. Possibilities for making substantially larger purchases from Commonwealth and soft currency sources would increase over time. We believe this well understood by British tobacco trade. In any event, we have ample stocks equal and better than Rhodesian tobacco which available if necessary to cover entire amount normal UK purchases Rhodesia.

3. We prepared make available following credit terms on commercial purchases: (a) UK now receives six-month CCC credits on tobacco purchases. This can be extended to three years on short notice. (b) In the event longer credit terms desired, CCC prepared seek special five-year credits. In both instances transactions would remain in private trade, therefore, not subject criticisms likely surround PL–480.

4. Possibilities for making US price terms more attractive are difficult predict, because we cannot know state actual markets at future date, especially in event UDI precipitates aggressive Rhodesian market activity. However, at present, CCC stocks tobacco of approximate Rhodesian quality could be landed UK at prices closer Rhodesian price and cheaper than US higher quality tobacco normally sells UK. Additional stocks could also be obtained under barter such as AID offshore procurement in which UK tobacco concerns already participate. Price incentives tobacco barter trade also understood by UK trade.³

Ball

1. Source: Department of State, Central Files, POL 19 RHOD. Secret. Drafted by Terrell Arnold of the Economic Bureau’s Temperate Products Division; cleared by USDA Foreign Agricultural Service Administrator Raymond Ioanes, Director of the Economic Bureau’s Office of International Commodities George R. Jacobs, Chief of the Economic Bureau’s Temperate Products Division Fred H. Sanderson, Springsteen, Mulcahy, and Judd; and approved by Trimble. Repeated to Salisbury, Lusaka, Dar-es-Salaam, and USUN.
2. Telegram 1409 from London, September 30, reported that Rhodesian tobacco was a substantial part of the total 50 million pounds of the estimated British balance-of-payments loss in the event to a trade embargo against Rhodesian goods. (Ibid., POL 16 RHOD)
3. Telegram 1786 to London, October 5, stated that the British decision on a tobacco embargo should be made on its own merits and without regard to a possible alleviation of the tobacco supply problem from U.S. sources. If such a decision were made and the British Government approached the United States for assistance, the substance of telegram 1730 could be delivered. (Ibid., POL 19 RHOD)