31. Memorandum From the Deputy Director of the Office of British Commonwealth and Northern European Affairs (Beale) to the Assistant Secretary of State for European Affairs (Merchant)1
SUBJECT
- Escape Clause Action re Bicycles
I understand that you and Mr. Waugh are to see the Secretary to urge him to take this matter up personally with the President following the Secretary’s letter of April 12.2 The problem will probably come to the President’s attention during the Secretary’s absence.
The most important aspect of this case seems to us to be not the potential damage to the European bicycle industry, but the fact that the Europeans generally regard it as a crucial test of our future trade policy. The British have made this abundantly clear on several occasions; they invariably stress the effect of an adverse decision on all British exports. The Europeans joined in the OEEC resolution of March 25 which states in part that approval of the Tariff Commission recommendation so soon after the Swiss Watch case, “to increase protection against goods of special interest to European exporters and in which they show competitive efficiency would not fail to have widespread repercussions on the confidence and initiative of all exporters and potential exporters of European goods to the U.S. market”.
If we revert to protectionism in this case, the pressure on other countries to move in the same direction will be greatly increased. Such a trend would run counter to all that we have advocated in the field of economic policy for Europe since the war.
- Source: Department of State, Central Files, 411.006/5–355. Confidential.↩
- Document 28.↩