Foreign Relations of the United States, 1948, Western Europe, Volume III

840.50 Recovery/4–3048: Circular telegram

The Secretary of State to Certain Diplomatic Offices in Europe ¹

confidential

Washington, April 30, 1948—noon.

Re bilateral agreements under Economic Cooperation Act:

1. Under Act bilateral agreement pursuant Section 115(b) required in case each participating country. Unless such agreement in effect July 3, 1948 Admr would not be authorized to extend assistance thereafter.

2. In view of requirements in many countries that agreement be ratified by parliament necessary to use every effort to have form of bilaterals agreed by June 10 if possible.

3. Desired to have greatest practicable uniformity in bilaterals. Recognized that during negotiations a number of questions will arise requiring policy decisions and extensive consultation within US Govt particularly with Admr.

4. Tight time schedule makes necessary the use of all available means of negotiation to achieve agreement. Therefore believed necessary that considerable part of discussions with participating countries take place in Wash although US missions in countries will be called upon to carry on discussions of particular points. In addition may become desirable to use OEEC mechanism to reach uniformity in certain cases. Although desirability of avoiding concentration of ERP matters in Wash and political desirability of negotiation in Europe are recognized, seems inescapable to have large part of discussions in Wash. Final signing of agreements probably done in participating countries.

5. Dept expects to have draft bilateral agreement for discussion with countries completed by May 10. Copies will be sent soonest to you and conversations will begin with foreign missions here as soon as draft ready. In case of Greece expect principal negotiations will be Athens and separate instructions will be sent.

6. Discussions of bilaterals will be independent of any discussions re programs of assistance or terms of any credit.

7. Principal provisions for bilaterals are contained in Section 115(b) of Act. Additional standard provisions now contemplated include: (a) statement of adherence to purposes and policies of Act as stated in Sections 102(a) and (b); (b) clause agreeing to take measures to prevent restrictive practices which would limit production or expansion of trade; (c) reciprocal agreement according MFN treatment with respect to trade of participating country and US including areas of Germany, Trieste, Japan and Korea, for which US has responsibility; (d) agreement re giving publicity within country and among participating countries of purposes of recovery program and actions taken in furtherance thereof; (e) agreement to extend cooperation to special ECA missions.

8. You are requested to study Section 115(b) of Act and para 7 above and submit to Dept earliest your views as to circumstances which make any of suggested clauses not applicable to country to which you are accredited. Now proposed not to include local proceeds clause under Section 115(b) (6) in case of countries which presumably will not receive grants since bilaterals will necessarily be subject to further amendment as required.

9. Dept will keep you fully informed re progress.

10. You are authorized to convey substance paras 1 through 6 to Govt to which you are accredited. Dept will likewise notify missions here immediately.

Marshall

1. Sent to diplomatic offices in all CEEC capitals and in the United States zone in Germany.