Foreign Relations of the United States, 1955–1957, Foreign Economic Policy; Foreign Information Program, Volume IX

23. Memorandum of a Conversation, Department of State, Washington, March 2, 1955¹

Washington, March 2, 1955

SUBJECT

• United States Request for Waiver under the GATT for its Actions under Section 22 of the Agricultural Adjustment Act

PARTICIPANTS

• Dr. J.H. Van Roijen, Ambassador E. and P., Embassy of The Netherlands
• Mr. A.B. Speekenbrink, Economic Minister, Embassy of The Netherlands
• Mr. Samuel C. Waugh, Asst. Secretary for Economic Affairs, Department of State
• Mr. Keld Christiansen, WE, Department of State
• Mr. Joe A. Robinson, TAD, Department of State

Mr. Waugh said that we understood that The Netherlands Government intended to vote against our request for a waiver under the GATT for our Section 22 actions, but that we were in a position where we might need their vote to get the two-thirds majority. He said that we, ourselves, did not like to request a waiver for Section 22 but that we had to in order to get Congressional acceptance of the GATT organization agreement. Without it, there might be no GATT and we would have to go back to the old bilateral system of trade agreements.

Mr. Waugh reviewed the history of our use of Section 22, pointing out that we had used it in moderation. Furthermore, he said, we were willing to agree to prior consultation; to an annual report regarding actions we take under Section 22; and to a review of the report by the Contracting Parties. He said that even with the waiver, we will have a difficult task getting the GATT organization agreement through Congress. Therefore, every vote that we lose will give the enemies of the program ammunition. He said that the United States would appreciate the vote of The Netherlands even though we know that they do not favor such a waiver. We recognize that they would be voting on the basis of choosing the lesser of two evils.

The Ambassador said that he would pass this information on to his Government; that they, here at the Embassy, understood our problem and were sympathetic with it, but that their Government had its problems also. His Government is afraid of a precedent which might be followed by other countries, such as Germany and France, who are not too enthusiastic about getting rid of quota restrictions, and who would support the waiver in order to be able to use similar devices. Mr. Waugh said that he had heard that argument before, particularly from Mr. C.D. Howe of Canada, but that we were faced with the fact that we had a law on the books that requires our taking Section 22 action under certain conditions and that this law had to be complied with by the President. He felt that it would be better to have a GATT agreement approved by Congress with a Section 22 waiver in it than to have no GATT at all.

Mr. Waugh expressed the opinion that the Republican Party had made a tremendous swing, in support of the President, from a high protectionist policy to a pretty liberal trade policy, but in order to have a better trade policy, we have to make some concessions which we don’t like. We recognize that this is not an ideal arrangement but that it is better than no GATT.

The Ambassador agreed that it would be better for the future of international trade to have the United States in GATT than to rely on a bilateral type of approach. Mr. Waugh said that he felt that if the new GATT were approved by Congress, it would be a great step forward by a Republican Administration, and emphasized that we do not want to go back to the bilateral type of trade policy. The Ambassador said that he felt Mr. Waugh’s points were well taken and that he would pass them on to his Government.

Mr. Speekenbrink asked if the vote were badly needed. Mr. Waugh said that he didn’t know what the most recent count was but that the vote might be close. Mr. Speekenbrink said that if it were badly needed, they might be able to vote for the waiver, but they would prefer to vote against it in order to strengthen their hand against the efforts of countries like Germany and France who would like to continue the use of quotas. The Ambassador added that if they voted against it, and we still got the two-thirds majority, they would be in a stronger position.

Mr. Waugh said that their negative vote would make it more difficult for the United States, whereupon Mr. Speekenbrink asked why we need a 100 per cent vote for the waiver. Mr. Waugh pointed out that the opponents of the program would not relate a negative vote to Section 22 but would connect it with the whole United States program, and would try to make the point that in spite of United States efforts in foreign economic relations, other countries were being uncooperative. He said that he, of course, would not expect them to vote for the waiver without making a statement in which they made clear their opposition in principle.

In answer to a question, Mr. Waugh said that Canada apparently intended to vote against the waiver but that Australia had given no indication yet that they would vote against it.

Mr. Speekenbrink remarked that in Holland the Section 22 waiver would be regarded as one part of the total picture of United States foreign trade policy. He mentioned the restrictions on butter and other products and the talk about restricting residual fuel oil. He said that all of this made up a whole picture for their people. Mr. Waugh agreed that it must be considered as a whole but said that he believed the Republican Party which had been traditionally protectionist was making progress throughout the United States in shifting to a more liberal trade policy. Of course, there were exceptions but support was being given by groups like the Detroit Chamber of Commerce, the American Federation of Labor, various women’s leagues, etc.

Mr. Speekenbrink suggested that they might vote for the waiver and then find that H. R. 1 was passed for only one year with no tariff negotiations in the offing. Then they would feel that they had sold themselves cheap. Mr. Waugh said that he felt that the President had enough strength and support to get H. R. 1 in substantially its present form.

The Ambassador said that he would be glad to present our view to his Government but that he could not guarantee anything. Mr. Waugh assured him that we did not expect him to make a commitment but would appreciate his emphasizing to his Government the importance of this waiver to the United States.²

1. Source: Department of State, Central Files, 394.41/3–255. Official Use Only. Drafted by Joe A. Robinson of the Trade Agreements and Treaties Division, Bureau of Economic Affairs.
2. On the same day, Assistant Secretary Waugh also met with the Belgian and Danish Ambassadors to elicit their governments’ support for the U.S. waiver. (Memoranda of conversation, March 2; ibid.)