88. Memorandum From the Under Secretary of State (Dillon) to Secretary of State Herter0
During my talks this last week I found that the British, Germans and Dutch strongly favored the idea of reorganizing the OEEC with full U.S. participation. The opinion seems general that the original purposes of the OEEC have been fulfilled and that the need now is for a new effort by the industrialized countries to mobilize and coordinate assistance to the less developed areas. Our desire to participate in any future discussion regarding the settlement of the issues emerging from the EEC and EFTA has also been welcomed and feeling is general that the only suitable forum for such discussion would be a reorganized OEEC.
The British volunteered that they would be happy to step down from the permanent chairmanship of the OEEC which they now hold if the U.S. were to join a reorganized institution.
The French favor the objectives but had some worry about modalities. The main concern of the French is the problem of delay. To reorganize the OEEC will take time, while the need for coping with the EEC/EFTA problem is urgent. At the same time, an ad hoc group to discuss [Page 206] this matter would be dangerous, since the issues involved cannot be settled in one or two meetings and public opinion would tend to concentrate on this aspect.
There is also a fear in some quarters (e.g. Monnet) that reorganizing the OEEC from within may be difficult—largely because of vested interests in the Secretariat, committee chairmanships, etc.—and that the best approach would be for the key governments to make the basic decisions outside the OEEC.
As a result of my talks I have come to the conclusion that it is best to act now, on the basis of a joint decision of the Heads of Governments, rather than to await a unilateral announcement by the U.S. in the State of the Union message as we had earlier planned.
This could most easily be accomplished through the inclusion of an appropriate section in the communiqué to be issued at the close of the Western Summit meeting. The essential elements would be:
- 1.
- To record the view that the major purposes of the OEEC to assure the economic recovery of Europe have now been accomplished.
- 2.
- To assert that new and important tasks now face the industrialized countries of the Free World—namely to mobilize resources to assist the less developed areas, to promote policies contributing to growth and stability in the world economy, and to further world trade on a multilateral basis.
- 3.
- To record a decision by the four governments to appoint a group of their representatives to consider and recommend the form of a successor organization to the OEEC, inviting for this purpose the participation of the countries presently represented on the Executive Committee of the OEEC and a representative of the Commission of the EEC.
Suitable language would have to be found to make it clear that the new organization would not duplicate or interfere with the functions of the World Bank, GATT, etc. Something would also need to be said to cover consultation with Japan.
The end result would be a group of the following countries which would have the public task of reorganizing the OEEC, but could also iron out the problems of the Six and Seven.
- U.S.
- U.K.
- France
- Germany
- Belgium
- Denmark
- Switzerland
- Turkey
- Italy
- EEC Commission
If you concur, I suggest that we first discuss this proposal with Secretary Anderson1 and then recommend action along these lines to the President.2
- Source: Department of State, Central Files, 374.800/12–1359. Confidential. Herter was in Paris for the North Atlantic Council Ministerial Meeting December 15–17 and the Western Heads of Government meeting December 19–21.↩
- On December 15, Dillon reported to Secretary Herter in Paris that Anderson’s opposition to a reorganization of the OEEC was “largely if not primarily motivated” by concern that any expansion of the Department of State’s role in international economic affairs would be at the expense of the Department of the Treasury. Dillon added that Anderson could be expected to oppose any new initiatives to promote OEEC reorganization. (Tocah 4 to Paris; ibid., 840.00/12–1559)↩
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On December 16, Dillon reported to Eisenhower on his mission to Europe:
“As a result of my discussions in Europe last week I have become more than ever convinced that we must launch a new initiative to find a constructive solution to the growing trade rivalries in Western Europe and to mobilize the energies of the industrialized countries in a concerted effort to help the less developed areas.” (Tomur 34 to the U.S.S. Des Moines in the Mediterranean; ibid., 840.00/12–1659)
↩ - Printed from a copy that bears this typed signature.↩