economic and other considerations. These continue to be a fundamental factor. Though all of these governments concentrate their main efforts and resources upon industrial investment and building up of production, the results have failed to meet the needs of their countries. The more industrialized states, moreover, seem to have approached the limits of what can be achieved economically with the bureaucratic and inefficient methods of centralized planning used heretofore, and their rates of growth have slumped. În agriculture, stagnation has resulted from maladministration, failure to provide incentives, and the inadequacy of agricultural investment and technology that accompanied collectivization. Because of these basic faults, the Eastern European countries continue to lag economically behind the West. The contrast between this condition and the spectacular growth of Western European economies is causing demands for changes in policy. Their peoples see fulfillment of their basic material expectations receding farther into the future. The Soviet bloc countries have tried to overcome the economic inefficiencies of individual country production by coordinating industry, agriculture, and trade through bloc-wide organization, but the inherent difficulties of Communist planning, as well as those of reconciling divergent national interests, have produced only meager progress.

Our basic aim with regard to Eastern Europe is to see its peoples fully independent, prosperous, and restored to their natural relationship with the rest of Europe and the free world. This policy reflects a strong and enduring American interest. For one thing, bonds of blood and friendship have long existed between the United States and the peoples of Eastern Europe. Of even more importance is our American conviction that the unqualified achievement of self-determination in Eastern Europe, as everywhere, is essential to a just and secure world order.

We hope to see, and are trying to encourage, a progressive loosening of external authority over Eastern European countries and the continuing reassertion of national autonomy and diversity. We believe such evolution is a slow but sure way toward freedom and national independence.

We want the Eastern European peoples to be able freely to determine their own forms of government and achieve an independence that can bring a stable, natural relationship with all their neighbors, including the Soviet Union. Such a healthy relationship would contribute to the peace and security of Europe and of the whole world.

From the standpoint of accomplishing this long-range objective of United States policy, the most significant aspect of the situation in Eastern Europe is its increasing fluidity and change. This reflects the increasing tendency among Eastern European governments to take more account of the national interests and human needs of their peoples. In dealing with these trends, the United States is maintaining the greatest possible flexibility of means for exerting our influence to promote developments favorable to the goal of independent selfgovernment and open society for the peoples of Eastern Europe. We shall steadily persist in this endeavor and use our influence in every

practicable way toward that end. In this effort we shall keep in mind that no two of these countries are alike in the tempo or manner in which they are breaking away from the Stalinist past. We plan to shape our policies to the different needs and opportunities that each of them presents.

In this connection United States policy will not remain passive. Our policy is to encourage the evolution now in progress by using every kind of peaceful contact available. There are increasing opportunities for doing this as Eastern European governments turn more and more to the West for trade and other exchanges, and at the same time start lowering more of the barriers against the West. The people of Eastern Europe for their part welcome anything that breaks down their isolation and brings them into touch with our part of the world. From this increasing knowledge of and association with the West, they are stimulated further to assert their national identity and their desire for improvements at home.

There are many ways in which United States policy can encourage and assist this evolutionary process. Our material aid to the Polish and Yugoslav peoples over a period of years has promoted independence and change in those countries and kindled hopes for similar developments elsewhere in Eastern Europe. As the bloc governments have begun to improve their relations with us and to settle claims and other outstanding problems, we find opportunities gradually opening wider to many-sided approaches that bring their peoples and ours into significant contact. An increasing stream of American tourists directly acquaints the Eastern Europeans with our interest in and regard for them, as well as with the Western ideas and events they are interested in knowing. We now exhibit at fairs in Poland, Czechoslovakia, and Bulgaria, and send other exhibits to these countries as well as Rumania. We encourage artists, writers, scholars, scientists, and athletes to take part in exchanges, and we want to expand this trend wherever it is feasible. The Voice of America provides all of Eastern Europe with a steady flow of information on United States and world developments. The magazine Ameryka is distributed in Poland and cultural bulletins in some of the countries.

Trade is of advantage to both sides and will play a part in these developments. In trading with us, the Eastern European countries involve themselves with our free economy and further expose their representatives and their people to the dynamism and practical effectiveness of our system. While we shall maintain our controls on strategic commodities going to Eastern Europe, we think expanding trade in peaceful goods is a useful and desirable means of drawing these nations into practical contact with the free world."

A part of our many-sided approach to the changes now accelerating in Eastern Europe is to improve and extend our relations with Eastern European governments wherever feasible. Our purpose in this extension of relations is to broaden our access to their people, to communicate more effectively with the bloc governments, and to influence their views and conduct.

See infra et seq.

We believe that Europe cannot enjoy a full measure of security and prosperity until the Eastern European countries are drawn back into their historical relationship with the rest of Europe. We share with our friends in Western Europe the desire to see this inevitable transformation. They are in a position to influence the Eastern European countries at close range toward that goal by their policies. It is essential, therefore, for the United States to work with them in facilitating this process.

Document V-2

The Use of United States Trade To Encourage Evolution of Greater Political Independence in Eastern Europe: STATEMENT MADE BY THE SECRETARY OF STATE (RUSK) BEFORE THE SENATE COMMITTEE ON FOREIGN RELATIONS, MARCH 13, 1964 (EXCERPTS) 5

Our trade policy toward Communist countries is an integral part of our overall policy toward international communism, and we must view it in this broad framework.

Our overall policy toward international communism has three objectives:

a. To prevent the Communists from extending their domain; and to make it costly, dangerous, and futile for them to try to do so;

b. To achieve agreements or understandings which could reduce the dangers of a devastating war; and

c. To encourage trends within the Communist world making for an evolution toward greater national independence, peaceful cooperation, and open societies.

To promote these objectives we need to adjust our policies to the differing behavior of different Communist states as well as to the changing behavior of the same states. This applies to trade, as well as to other aspects of our policy. Under some circumstances, we may deny trade in order to influence Communist economic, military, and political decisions and capabilities in our interest. Under other circumstances, we may encourage trade for the same purposes.

Policies of denying or encouraging trade should not be applied in a doctrinaire manner. They can be total. Or they can be selectiveaimed at those particular articles or commodities or services that have a particular relevance to the military power or economic life of a particular country.

Since the Communist countries no longer form a completely monolithic bloc in political terms, it follows that we should not treat them as a monolith in trade terms. Our trade policies should be custom tailored to fit the need-designed to differentiate among Communist countries in accordance with the conditions and behavior of individual countries and our specific objectives toward each.

5 Department of State Bulletin, Mar. 30, 1964, pp. 474–484.

At the present time the United States applies restrictions on trade with Communist countries that take account of the differing problems in four geographic areas.

a. The Soviet Union:"

b. The Communist countries of Eastern Europe;

c. The Communist countries of the Far East-Communist China,' North Korea, and North Viet-Nam;

d. Cuba.s

In this statement, I propose to discuss the special problems and policies relating to each of these areas.

Our trading policies with Eastern European countries must take into account facts, relations, priorities, and possibilities, different from those that determine trade relations with the Soviet Union. These are small and diverse countries. Unlike the U.S.S.R. they are far from self-sufficient. In the postwar years they have been compelled to depend on the Soviets for their import requirements. Even so, their imports from the industrial West have risen to approximately 2 percent of GNP and are of considerable qualitative importance to their industrialization programs.

We might turn for a moment to the charts for some useful insights into the trading position of the Eastern European countries. Chart 2 shows that the bulk of Eastern Europe's trade is with other Communist countries.9

The trade of these countries with the free world has increased substantially in recent years. As chart 3 shows, however, Eastern Europe's current trade with Western Europe is still not up to prewar levels, allowing for changes in prices."

Nearly all of the Communist countries of Eastern Europe are trying to reduce their economic dependence upon the U.S.S.R. They are showing a nostalgia for their historic relations with the West. They are trying to increase their trade and other contacts not only with Western Europe but with the United States.

In our trade policies toward the individual countries of Eastern Europe we have sought to encourage tendencies toward greater independence of action. Where countries have demonstrated a will to develop their policies and institutions along national lines, and have sought closer economic relations with the United States, we have adjusted our policies by relaxing our export restrictions and by granting other concessions.

Through such measures, we can hope over time to develop avenues of practical contact with the peoples and officials of the Eastern European countries. Trade carries with it more than commodities. It helps to bring the presence of the United States to the Eastern European peoples, to associate them in some measure with our economy, and to demonstrate American enterprise and efficiency. By these means, trade

"See post, doc. VI-6.

7 See American Foreign Policy: Current Documents, 1963, pp. 758–761. 8 See ante, docs. III-18-19.

9 Not reprinted here.

enables us to exert some influence on the evolution of policy and institutions in this period of accelerating change in Eastern Europe.

Document V-3

Continuation of United States Trade Agreements Concessions to Poland and Yugoslavia: MEMORANDUM BY THE PRESIDENT (JOHNSON) TO THE SECRETARY OF STATE (RUSK) AND THE SECRETARY OF THE TREASURY (DILLON), MARCH 26, 1964 10

Pursuant to section 231(b) of the Trade Expansion Act of 1962, as amended,11 I hereby determine that extending the benefits of trade agreement concessions made by the United States to products, whether imported directly or indirectly, of the Polish People's Republic and the Socialist Federal Republic of Yugoslavia, both of which were receiving trade concessions on December 16, 1963,12 will be important to the national interest and will promote the independence of these two countries from domination or control by international communism. The reasons for this determination are contained in the attached statement.13

The Secretary of State is directed to report this determination and the reasons therefor to the Congress, as required by section 231(b) of the Trade Expansion Act of 1962, as amended.1*

The Secretary of the Treasury is directed to inform the Commissioner of Customs of this determination.

Document V-4

"We Will Continue To Build Bridges Across the Gulf Which Has Divided Us From Eastern Europe": REMARKS BY THE PRESIDENT (JOHNSON) AT THE VIRGINIA MILITARY INSTITUTE, LEXINGTON, Va., MAY 23, 1964 (EXCERPT) 15

The nations of Eastern Europe are beginning to reassert their own identity. There is no longer a single Iron Curtain. There are

10

Department of State Bulletin, Apr. 20, 1964, pp. 626-627.

19 U.S.C. § 1861 (b); also, American Foreign Policy: Current Documents, 1963, pp. 510-511.

12 Date of enactment of sec. 231(b) of the Trade Expansion Act of 1962, as amended, cited above.

13 Not reprinted here; text in the Department of State Bulletin, Apr. 20, 1964, pp. 627-628.

The Secretary of State reported this determination of the President to the Congress, Apr. 3, 1964; see the announcement, Apr. 3, 1964, by the Department of State, ibid., p. 626.

15 Department of State Bulletin, June 15, 1964, pp. 922–924. President Johnson spoke at the dedication of the George C. Marshall Research Library.