Repeat for Information London, Washington, Paris and NATO Paris.

By Bag Canberra, Wellington, Colombo, Karachi, Pretoria, Cairo, Tel Aviv, Beirut, Athens, Ankara, Moscow, Oslo, Copenhagen, Hague, Brussels, Bonn, Lisbon, Rome, Djakarta, Rio from London and Delhi from Ottawa.

FINANCING OF THE INTERNATIONAL EMERGENCY FORCE

It is evident that establishment of the emergency international force will entail heavy expenditures and that it will be necessary to give more precision to methods for meeting these costs. We have, therefore, initiated informal discussions with a number of representative delegations to ascertain whether there is basic agreement on the cost sharing concepts which might be applied. We have stressed that these talks are explanatory only and that they are primarily designed to help governments to establish a basis for more definitive decisions that will have to be made at a later stage.

2. We first approached the delegations of the USA, Australia, Norway and India, the last two being members of the Advisory Committee established under the resolution of November 7. In order to provide a basis for discussions, we suggested that we might consider that governments contributing personnel would be willing at this time to assume costs, such as pay and allowances, which would be a continuing charge for these personnel if they were to continue service at home. However, the international community should be prepared to share added costs attributable to the movement of the Force to the Middle East as well as for the further expenditures required in performance of the responsibilities as defined in the terms of reference of the International Emergency Force.

3. If we apply this general concept to anticipated expenditures, we would achieve a division of costs on the following basis:

(a) The member state providing personnel would pay the normal pay and allowances and the costs of any clothing, equipment, etc., which would be required if the forces were to remain at home.

(b) Common expenses to be financed by the UN membership as a whole; these would include:

• (i) Costs of any headquarters in the area or elsewhere set up to administer the Force.
• (ii) Any costs of equipment or maintenance which would be attributable to the activities of the Force in the area.
• (iii) Costs of transporting the Force to and from the area.

4. Although the common costs referred to above would ostensibly be shared by all member states, we would contemplate that some members would be prepared to make voluntary contributions which would reduce the size of the budgetary claim on the UN membership as a whole. The USA has already decided to provide a considerable amount of air transport at its own expense. However, there will be other costs of transportation (e.g., a contract now being negotiated with Swiss Airlines) which will be advanced by the UN out of the working capital fund. These advances will have to be recovered by a charge on the membership as a whole. We would hope that the governments of the UK and France or other governments might be willing to contribute equipment which they have already sent to the area, including transport.

5. Although delegates approached were uncertain whether their governments would be willing to accept these ideas, they indicated that their first impressions are most favourable.

6. Consideration should also be given to the desirability of inviting governments in the area to contribute local currencies which might be utilized to defray some of the local costs.

7. Quite apart from these questions of financing the Force are those of relief and rehabilitation and clearance of the Canal. We anticipate that there will be pressure to treat clearance with special urgency to meet the wishes of countries vitally interested in rapid restoration of Canal facilities. At the moment there does not seem to be any measure of agreement on the basis for financing these costs and we intend to maintain a clear distinction between these issues and those of financing the Force. It is the impression of some delegations that the costs of clearing the Canal should be met by the UK and France, but we anticipate that these latter delegations may resist any such suggestion both because of the financial magnitude and because it can logically be contended that the Canal was blocked by ships sunk by Egyptian action. We will wish to avoid a political debate on this question if possible but our first impression is that it might be reasonable to call on the main maritime and trading nations which are directly interested in rapid clearance of the Canal to contribute specialized equipment and personnel for this task. The costs of organizing the operation and perhaps some of the residual administrative changes might be included in any common budget.

9. We are forming a small group on the delegation to discuss these ideas and to formulate a possible approach which will assist the Assembly to avoid the diffuse and often uninformed discussion which is likely to emerge if the Assembly as a whole is asked to deal with these complex questions without precise advance guidance. We will inform you of further developments, but would welcome your preliminary reaction and those of the other department concerned on the ideas we may wish to circulate as a basis for discussion in the Assembly.