Foreign Relations of the United States, 1958–1960, Western European Integration and Security, Canada, Volume VII, Part 1

76. Telegram From the Mission at the North Atlantic Treaty Organization and European Regional Organizations to the Department of State⁰

Paris, October 22, 1959, 8 p.m.

Polto 673. Tokyo for USDelGATT. References: (a) circ 476, (b) circ 478, (c) circ 480.¹ We have noted tendency in refs a, b and c and recent memoranda of conversation between Department officials and Marjolin, Wormser, Wyndham White² and others to regard the OS as merely another preferential trading bloc in Europe resulting in a wider area of discrimination against US goods, also tendency to regard the OEEC as an ineffective mechanism for bringing the Six and Seven together and even if successful would serve merely to bring about a wider preferential area.

USRO feels that at a particularly sensitive time in Washington over B/P deficits and continued discrimination against dollar trade, the fundamental issue of Western unity against the Soviet threat is in danger of being temporarily overshadowed by commercial considerations which, while valid in themselves, must be considered against the larger political issue. In Europe, unless unity of political and economic policy is advanced through one agency or another on the broadest possible geographic basis, we run the risk of facing a divisive and stormy period ahead among the North Atlantic powers. In this connection, it would be a mistake to assume unquestioningly that the Six will survive such a period. Many observers in OEEC regard with considerable skepticism French gestures toward a liberal trading policy and feel these are timed at this moment primarily to help kill off the OS.

USRO believes that discrimination can be reduced more effectively with than without the OEEC. In this connection, it must be remembered that the spirit of OEEC is one fundamentally against discrimination and French protectionism has received consistently a very rough going over in that organization.

If the Soviet challenge is now as much economic as military, the West must meet it in an organized and unified manner. Of all existing organizations, the OEEC offers, in our judgment, the best promise in Western Europe of uniting the economic power of the Atlantic Community in this effort as well as serving as a magnet for the peripheral countries. While the neutrals must maintain a certain posture in the organization, nevertheless they are in practice united on the economic front within the OEEC in a way that cannot be done elsewhere. In short, there is no other organization in sight to do it better.

The destruction or substantial impairment of OEEC which a failure of OS to reach an accommodation on a European-wide basis may well involve, would amount, in USRO’s opinion, to handing the Soviets a tremendous victory on a silver platter. Commercial and trading considerations, even though they involve more continued regional discrimination on a European-wide basis, should not blind us to that fact.

Burgess

0. Source: Department of State, Central Files, 440.002/10–2259. Secret. Repeated to Tokyo and pouched to all OEEC capitals and to Brussels for USEC.
1. Circular telegram 476 is printed as Document 74. Circular telegram 478, October 13, repeated Colux 32 (see footnote 1, Document 74) to all OEEC capitals and Tokyo. (Department of State Central Files, 440.002/10–1359) Circular telegram 480, October 14, summarized recent discussions between Department of State and European officials on the EFTA and instructed U.S. representatives abroad to avoid declarations on U.S. attitudes toward the EFTA or a possible resumption of talks for an expanded free trade area. (Ibid., 440.002/10–1459)
2. For the memoranda of conversations with Marjolin and Wormser, see Documents 71 and 72. No record of the discussion with Wyndham White has been found.