Germany May Extend Trade with Arabs; Will Honor Pact with Jews

The West German Government has made it clear that it is ready to expand its trade with the Arab countries in order ” to compensate” them for economic aid given to Israel under the German-Israeli reparations pact “on purely moral grounds,” it was reported here today. At the sometime, it was emphasized that Chancellor Adenauer’s resolve to honor the pact is unshaken.

It was pointed out that a great deal of the oil Germany imports from the Middle East is paid for in dollars or pounds. The possibility is being studied here of payment being made in the future by reciprocal deliveries of goods to the Arab states. This, it is expected, will produce a complex payments problem between Germany on one hand and Britain and America on the other, since Middle East oil holdings are British and American owned.

(The New York Herald Tribune, in an editorial today commenting on Arab opposition to Germany’s payment of reparations to Israel, says: “The Arabs may consider this justified as a war measure against Israel. But virtually the entire world outside the Arab bloc regards the reparations as an act of elementary justice and a basic step toward rehabilitating Germany in the community of nations. All West German parties are agreed that the reparations program must be ratified, and although the Bonn government is planning to discuss the matter at the Arab capitals, there is no hint that it will change its stand.

(” The net effect of the threatened boycott, therefore, will be to affront world opinion, jeopardize international efforts to ease the condition of the Arab refugees from Palestine, deprive the Arab nations of German goods and-by placing a strain upon Germany and the West generally-hamper the reorganization of the defenses and the economic development of the Middle East. Israel, on the other hand, will be strengthened morally, diplomatically and economically, ” the editorial points out.)