Composition

Northern European Regional Planning Group

Denmark, Norway, and the United Kingdom.

The United States has been requested and has agreed to participate actively in the defense planning as appropriate.

Other Parties may participate under the provisions listed above. Western European Regional Planning Group

Belgium, France, Luxembourg, the Netherlands, and the United Kingdom.

Canada and the United States have been requested and have agreed to participate actively in the defense planning as appropriate. Other Parties may and in particular Denmark and Italy will, participate under the provisions listed above.

Southern European-Western Mediterranean Regional Planning Group France, Italy, and the United Kingdom.

The United States has been requested and has agreed to participate actively in the defense planning as appropriate.

Other Parties may participate under the provisions listed above. It is recognized that there are problems which are clearly common to the defense of the areas covered by the three European regional groups. It is therefore important that arrangements be made by the Defense Committee with a view to ensuring full cooperation between two, or if the need arises, all three groups.

Canadian-United States Regional Planning Group

Canada and the United States.

Other Parties may participate under the provisions listed above. North Atlantic Ocean Regional Planning Group

Belgium, Canada, Denmark, France, Iceland, the Netherlands, Norway, Portugal, the United Kingdom and the United States.

The responsibilities for planning the defenses in the North Atlantic Ocean cannot be shared equally by all members of the Group. On the other hand, these responsibilities can to some extent be divided along functional lines and allocated to those Parties who are best able to perform the respective defense functions. Therefore, the North Atlantic Ocean Regional Planning Group when it meets, should establish a series of planning sub-groups related to specific functions of defense. The Group should determine on which sub-group or sub-groups each Party should sit, and the arrangements necessary to ensure coordination between these sub-groups in the interest of speedy and effective planning.

Terms of Reference

Each Regional Planning Group should:

develop and recommend to the Military Committee through the Standing Group plans for the defense of the region;

cooperate with the other Regional Planning Groups with a view to eliminating conflict in, and ensuring harmony among, the various regional plans.

Location

The Defense Committee should consider the question of the location of the Regional Planning Groups.

VII. [Military Production]

The Council recognizes that the question of military production and supply is an integral part of the whole problem of the defense of the North Atlantic area. Consequently, there shall be established as soon as possible appropriate machinery to consider these matters. The details of organization of this machinery, terms of reference, etc., shall be studied forthwith by a working group which shall submit recommendations to the Defense Committee or to the Council.1 VIII. [Economic Arrangements]

The Council recognizes the importance of economic and financial factors in the development and implementation of military plans for the defense of the North Atlantic area. Consequently, there shall be established as soon as possible appropriate machinery to consider these matters. The details of organization of this machinery, terms of reference, etc., shall be studied forthwith by a working group which shall submit recommendations to the Council,2

36. SECOND SESSION OF THE NORTH ATLANTIC COUNCIL (WASHINGTON): Communiqué, November 18, 19493

The North Atlantic Council convened today in Washington in its second session. The Council considered and approved a report of the Working Group on the establishment of a "Defense Financial and Economic Committee" under the North Atlantic Treaty as follows:

I

1. In accordance with the decision of the North Atlantic Council on September 17, 1949 and in further implementation of Article 9 of the Treaty, there is hereby established a Defense Financial and Economic Committee. It shall be responsible for advising the Council on the financial and economic aspects of measures for the defense of the North Atlantic area.

1 See the communiqué of the Second Session of the North Atlantic Council, Nov. 18, 1949; infra.

2 Ibid.

Department of State Bulletin, Nov. 28, 1949, pp. 819-821.

See Section VIII of the Final Communiqué of the First Session of the North Atlantic Council, supra.

5 Treaty of Apr. 4, 1949; supra, pp. 812-815.

II

The following general provisions shall govern the operation of the Defense Financial and Economic Committee:

1. The Defense Financial and Economic Committee shall be composed of a representative at a ministerial or similarly high level of responsibility from each signatory country. It shall report directly to the North Atlantic Council. It shall consult with the Defense Committee as appropriate.

2. The Committee and any subordinate bodies which it may set up shall establish and maintain close working relations with the North Atlantic military organization, and particularly the Military Production and Supply Board. The Committee or its subordinate bodies shall provide them with guidance on all relevant economic and financial factors; shall obtain from them information on those requirements of defense programs which are relevant to the consideration of economic and financial questions; and shall provide them with guidance on financial and economic arrangements to meet the requirements of defense programs.

3. The Defense Financial and Economic Committee is, in particular, responsible to the North Atlantic Council for the performance of the following functions, having regard for the principle of self-help and mutual aid in the field of military production and supply, and for the primary importance of economic recovery and continued economic stability:

(1) To develop in cooperation with the Military Committee (including the Standing Group) and the Military Production and Supply Board overall financial and economic guides to and limits of future defense programs, including military production programs, which NAT countries as a group and individually should undertake within available financial and economic resources.

(2) To appraise the financial and economic impact on member countries of major individual defense projects formulated by the Military Production and Supply Board or the Military Committee (including the Standing Group), including consideration of financing problems and availability of raw materials, capital equipment, and manpower, and, on [the] basis of such review, make recommendations as to action on such projects.

(3) To recommend financial arrangements for executing military defense plans, and particularly financial arrangements for the interchange among NAT countries of military equipment, surplus stocks, or materials and equipment to be used in producing military equip

ment.

(4) To measure and to recommend steps to meet the foreign ex

1 Established by Section IV of the Final Communiqué of the First Session of the North Atlantic Council.

2 Established in the second part of the present communiqué.

Both established by Section V of the Final Communiqué of the First Session of the North Atlantic Council.

change costs of imports of materials and equipment from non-member countries required by defense programs under the NAT.

(5) To consider, as may be found desirable and appropriate, plans for the mobilization of economic and financial resources in time of emergency.

4. The Committee may delegate to any Regional Defense Financial and Economic Committee which may be established by the Governments of a Region any of its functions which, in its judgment, can be better performed by regional committees. Actions of regional committees under such delegations shall be under the general guidance of, and in accordance with the general policies laid down by the North Atlantic Committee, and shall be subject to its coordination and

review.

5. The Committee shall provide itself with such subordinate bodies and staff assistance as may be necessary to carry out its functions. In particular, there shall be a permanent working staff in London, composed of qualified personnel representing interested countries, to carry on the day-to-day work of the Committee and to which the Committee may delegate such of its functions as it deems appropriate. The Committee shall have a Secretary, with suitable assistance, to perform secretarial and administrative functions.

6. The Committee shall meet at such times and places as may be required. Its secretariat and working staff shall be located in London. The Committee shall decide its own rules of procedure. Chairmanship shall be held in turn by the parties according to the alphabetical order in the English language beginning with the United States. Each party shall hold the office for one year. If any party does not wish to accept the Chairmanship, it shall pass to the next party in alphabetical order.

The Council took note of and approved the action of the Defense Committee in establishing a "Military Production and Supply Board".... The Council approved the directive issued by the Defense Committee in establishing the Military Production and Supply Board.

I

1. In accordance with the decision of the North Atlantic Council on September 17, 1949,1 and in furtherance of Article 9 of the Treaty, there is hereby established a Military Production and Supply Board.

II

The following general provisions shall govern the operation of the North Atlantic Military Production and Supply Board:

1. The North Atlantic Military Production and Supply Board shall be composed of a representative at the subministerial level from each signatory country. It shall report directly to the Defense Committee.

1 See Section VII of the Final Communiqué of the First Session of the North

Atlantic Council.

2. The Board shall establish and maintain close working relations with the appropriate military bodies set up under the Defense Committee. It shall look to them for information on military requirements and work with them to insure that, in so far as feasible, the military production and procurement program supports defense plans effectively. The Board shall also work in close coordination with the military bodies on the promotion of standardization of parts and end products of military equipment, and provide them with technical advice on the production and development of new or improved weapons. To facilitate the fullest cooperation and exchange of information between them on matters of joint interest, the Board shall establish and direct a suitably representative liaison group on a working level in Washington to work with the Standing Group.

3. The Board shall maintain close working relations with the finance and economic machinery to be established by the Council, and look to it for guidance on all relevant economic and financial factors.

4. The North Atlantic Military Production and Supply Board is responsible to the Defense Committee for the performance of the following functions, having regard for the principle of self-help and mutual aid in the field of military production and supply:

a. The review of the military supply situation on the basis of data to be secured from the appropriate military bodies on military matériel requirements and on the current availability of military matériel to meet such requirements.

b. The recommendation to the Defense Committee of ways and means of increasing available supplies where they fall short of requirements, either from production, surplus equipment or equipment economically capable of rehabilitation. In preparing such recommendations, account shall be taken of strategic factors, of physical capabilities of individual countries to produce military matériel, of the importance of securing maximum efficiency and integration of production, and of the guidance furnished by the finance and economic machinery with respect to financial and economic considerations.

c. The promotion of more efficient methods for producing military equipment and of the standardization of parts and end products of military equipment, including conservation in the use of strategic and critical materials, and including advice to the appropriate military bodies on the production problems involved in proposed new weapons or modifications in existing weapons.

5. The Board may delegate to any Regional Supply Board which may be established by the Governments of a Region any of its functions which in its judgment, can be better performed by regional boards. Actions of regional boards under such delegations shall be under the general guidance of and in accordance with the general policies laid down by the North Atlantic Board, and shall be subject to its coordination and review.

6. The Board shall provide itself with such subordinate bodies and staff assistance as may be necessary to carry out its functions. In particular, there shall be, in addition to the liaison group in Wash