640.6031/10–2549: Telegram
The Assistant Secretary of State for European Affairs (Perkins) to the Secretary of State 1
4269. From Perkins. East-west trade was discussed at London Ambassador’s meeting.2 Paris Embtel 4427 to Washington3 considered [Page 162] and full concurrence expressed. Sheeting felt EW policy and implementation had already had definite effect on satellites and offers major field for further and better effort. Inability of satellites to get industrial items from west to degree wanted has required Soviet to attempt provision. Soviets have in many cases fallen down on deliveries with resultant increase economic strain between Moscow and satellites.
It was felt that fullest appropriate exploitation economic controls should be pressed during present period. Satellite economies are still suffering from war devastation, shortages, and forceful reorientations directed from Moscow. Their dependence on imported capital equipment and industrial raw materials is so great that, when related to Communist promises to the people of economic benefits from Communist rule, there is broad field for effective action provided countries of west can concert. Also pertinent in regard timing is fact that western European governments may be more willing to cooperate at this time than they may be in future when pressures to find markets for European production will have increased. Review of present US policy might even consider civilian industrialization as well as clear war potential industries.
As for long-term policy, meeting agreed as to need for US to make exhaustive study of over-all problem, giving consideration to necessity for west Europe to exchange: its heavy industry products for raw materials somewhere; possibility of positive action by west to develop alternate sources of supply of items, such as food, timber, etc., essential to Europe and now obtained from east; and other basic elements. If cold war is protracted, west Europe should endeavor reach condition where it is not dependent on east for certain vital imports but in fact east becomes increasingly dependent on west.
Use of economic pressures to further western policy should always be flexible both as to countries and as to time.
Sent Department 4269 repeated Paris 813 for Bruce and Harriman.