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October 25, 1950 SECRET YUGOSLAVIA Problem To work out, under existing statutory authority, the means for financing emergency food exports to reach Yugoslavia prior to January 1, and therefore to be shipped from the United States prior to mid-November. Discussion The potential apparent sources of funds are principally the ECA, the Commodity Credit Corporation, the Export-Import Bank, the Mutual Defense Assistance Program, and the Department of Defense. The whole of the emergency food program for Yugoslavia could theoretically be undertaken either through MDAP or ECA. However, in the case of MDAP this would require especially that Yugoslavia agree to sign a bilateral agreement with the U.S. on MDAP. Ambassador Allen has stated that we have about a fifty-fifty chance of getting the Yugoslav Government to sign an MDAP bilateral and the matter is now being explored on a tentative basis with Yugoslav officials. In the case of ECA, Yugoslavia would have to agree to sign a bilateral agreement under the Economic Cooperation Act and to apply for membership in OEEC and be accepted by the other members. Tito has stated quite definitely within recent weeks that it would be impossible for him, for internal political reasons, to participate directly in ERP. Yugoslav participation would be equally undesirable from a U. S. policy point of view, not to speak of the improbability that the membership of OEEC could be induced to accept communist Yugoslavia into the group. The U.S. is endeavoring to make short-term emergency food relief immediately DECLASSIFIED E.O. 12065, Sec. 3-402 State Dept. Guideline, June 12 1979 By NLT NARS, Date 10.4+2