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CONFIDENTIAL
NE/IT-5
February 12, 1969
Background on Bilateral Issues - Italy
Italian Recognition of Communist China
In early 1964, Italy and Communist China negotiated
an "understanding" for the establishment of Trade
Missions in Peking and in Rome. President Saragat,
then Foreign Minister, told Parliament that Italian
recognition of Communist China was not a question of
"whether", but a question of "when". With the appoint-
ment of Nenni as Foreign Minister, the recognition of
Communist China again came to the fore. Developments
in Vietnam, Italian belief that attitudes in the United
States toward Communist China were changing, and the
flurry of rumors regarding the re-examination of policy
toward Communist China by Canada and Belgium undoubted-
1y contributed to Nenni's announcement on January 24.
Civil Air Negotiations
Italy denounced the Air Transport Services Agree-
ment of 1948 with the United States on June 1, 1966
and the denunciation took effect as of July 1, 1967.
Italy denounced the agreement because under the old
agreement there was a gap of some $7 million in favor
of the United States ($10 million in 1967).
Negotiations for a new agreement were held in
1967, but since Italian route demands would have sig-
nificantly unbalanced the revenue-earning potential in
favor of Italy, no agreement was possible and the talks
were broken off at the end of May 1967. Throughout
1968, the Italian Ambassador and Assistant Secretary
Solomon tried to move the matter forward in informal
talks. In December 1968, formal negotiations were re-
newed. The United States offered Italy important new
routes to Los Angeles, Atlanta, and Dallas which would
have produced a commercially balanced agreement. The
CONFIDENTIAL
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"ocrText": "CONFIDENTIAL\nNE/IT-5\nFebruary 12, 1969\nBackground on Bilateral Issues - Italy\nItalian Recognition of Communist China\nIn early 1964, Italy and Communist China negotiated\nan \"understanding\" for the establishment of Trade\nMissions in Peking and in Rome. President Saragat,\nthen Foreign Minister, told Parliament that Italian\nrecognition of Communist China was not a question of\n\"whether\", but a question of \"when\". With the appoint-\nment of Nenni as Foreign Minister, the recognition of\nCommunist China again came to the fore. Developments\nin Vietnam, Italian belief that attitudes in the United\nStates toward Communist China were changing, and the\nflurry of rumors regarding the re-examination of policy\ntoward Communist China by Canada and Belgium undoubted-\n1y contributed to Nenni's announcement on January 24.\nCivil Air Negotiations\nItaly denounced the Air Transport Services Agree-\nment of 1948 with the United States on June 1, 1966\nand the denunciation took effect as of July 1, 1967.\nItaly denounced the agreement because under the old\nagreement there was a gap of some $7 million in favor\nof the United States ($10 million in 1967).\nNegotiations for a new agreement were held in\n1967, but since Italian route demands would have sig-\nnificantly unbalanced the revenue-earning potential in\nfavor of Italy, no agreement was possible and the talks\nwere broken off at the end of May 1967. Throughout\n1968, the Italian Ambassador and Assistant Secretary\nSolomon tried to move the matter forward in informal\ntalks. In December 1968, formal negotiations were re-\nnewed. The United States offered Italy important new\nroutes to Los Angeles, Atlanta, and Dallas which would\nhave produced a commercially balanced agreement. The\nCONFIDENTIAL"
}