Foreign Relations of the United States, 1949, Western Europe, Volume IV

840.50 Recovery/3–2949

Memorandum From the Coordinator of Foreign Aid and Assistance ( Labouisse ) to the Secretary of State

confidential

[ Washington ,] March 29, 1949.

During their stay in Washington, one of the visiting Foreign Ministers¹ may refer to recent developments concerning the Organization for European Economic Cooperation (OEEC). These developments, which are summarized briefly below, were reported in a series of telegrams from Mr. Harriman, the most important of which was marked for you personally.

1. As you know, the Department, ECA and Mr. Harriman have felt for some time that, if it is to serve as a real instrument for European economic cooperation, the OEEC must receive political guidance from cabinet-rank officials in the participating countries. Mr. Harriman has had a number of conversations, particularly with Mr. Spaak and Sir Stafford Cripps, on this problem. Mr. Spaak has taken the lead in proposing various means by which the organization might be strengthened.

2. The arrangement finally decided upon by the OEEC Council in February provides that:

(a) the chairman of the Council, Mr. Spaak, may call together, as required, a consultative group consisting of ministers designated by the governments of those countries which are members of the Executive Committee, i.e., United Kingdom, France, Netherlands, Sweden, Switzerland, Italy and Turkey. (The individuals who sit regularly on the Executive Committee are high ranking civil servants, not of cabinet rank. This Committee meets very frequently, is elected annually, and gives continuing guidance to the work both of the technical committees and the Secretariat.)

(b) the Council itself will meet more frequently at the ministerial level than it has previously, and in any case, at least four times a year.

3. The reports which we have received from Mr. Harriman indicate that he believes the Consultative Group of Ministers can provide the high level policy guidance to the organization which he has felt has been lacking heretofore.

4. The Consultative Group met early in March and adopted a program for the year 1949–50. The program is an elaboration of a set of general objectives agreed to by the Council. It is particularly noteworthy for (a) the emphasis which is laid on the necessity for making 1949 a year of financial and monetary stabilization in Europe and (b) its direction to the Executive Committee to pay particular attention to the coordination of the national investment programs of the participating countries.

5. Mr. Harriman met with the Consultative Group a number of times. He feels that the program at one stage was in danger of laying too much emphasis on a drastic but non-selective reduction of dollar imports and upon the development, more or less regardless of cost factors, of new sources of supply in non-dollar areas of goods normally imported from the dollar area. He feels that Sir Stafford Cripps in particular had emphasized this approach. Mr. Harriman stated to the group that as supporters of the ITO, the progressive lowering of trade barriers and expanded world trade, we were opposed to restrictive policies and to the creation of an autarchic Europe which he feared might result if this principle were rigidly applied. He said that he realized that the objective of a Europe which would be independent of extraordinary outside assistance in 1952 involved important adjustments both on the part of the US and the participating countries. He recognized that restrictions in dollar imports were necessary but felt that they should be studied on a highly selective basis and pointed out that to base the policy for the future on the necessities of today might be disastrous both substantively and in its effect on American public opinion. Mr. Harriman feels that as a result of his participation in the discussions of the Consultative Group the program as finally agreed was considerably more constructive than might otherwise have been the case, particularly with respect to the statement of the trade relation with the dollar area.

6. He feels that as a result of the experience in these meetings the Consultative Group may favor even closer and more constant participation by the US representative in their future discussions. He, himself, is convinced that it is important for American views to be taken into account during the formative stage of the OEEC programs.

1. For documentation on the conference of Foreign Ministers at Washington in connection with the signature of the North Atlantic Treaty, April 4, see pp. 271 ff.