Foreign Relations of the United States, 1958–1960, Western European Integration and Security, Canada, Volume VII, Part 1

63. Circular Telegram From the Department of State to Certain Diplomatic Missions⁰

June 27, 1959, 6:57 p.m.

1450.

1. Pending further advice from Dept addressee Missions should be guided by following in answering queries re US attitude toward “outer seven” free trade area proposals:

A. US has followed with interest recent Stockholm discussions.¹ At present US has no detailed views re technical report developed by representatives Austria, Denmark, Norway, Portugal, Sweden, Switzerland and UK since it not yet fully informed re specifics of report and will need time consider carefully.

B. US would envisage commenting on details any plan adopted by Seven from standpoint implications for international trade and GATT consistency. We assume that other third countries will similarly wish offer comments.

C. Initiative in connection “outer seven” naturally rests with nations directly concerned as is case with any regional economic grouping. GATT recognizes contribution customs unions and free trade areas can make to expanding regional and international trade and US for its part would be prepared support in GATTFTA arrangement of these seven nations provided such arrangement substantially meets standards GATT Article XXIV. Have in mind for example requirements that FTAarrangements cover substantially all trade of member countries and that there be definite plan and schedule for complete removal internal trade barriers.

D. Conversely US would be seriously concerned and would have to reserve fully its attitude toward any plan (in Western Europe or elsewhere) which departed in significant respects from GATT standards.

2. FYI. Dept considering possible political and economic advantages and disadvantages limited FTA and has not made final assessment pending receipt additional information and field views. Do not see same positive political grounds for US support nor comparable elements economic integration as in EEC. Until Dept has opportunity consider all factors entering into situation, missions should be guarded in any comments on broader political aspects. Among other things we wish be able consider reactions European countries, including Common Market, and non-European countries to Stockholm discussions. Following are examples main questions which occur to us and Dept will welcome any further views from missions on these or other aspects:

A. Will outer seven FTA serve to improve chances for mutual accommodation between Common Market and other OEEC countries or is result apt to be divisive?

B. What will be likely economic and political effects on countries not included in limited FTA; e.g. Turkey, Iceland, and Finland? For info addressees who not informed Dept has learned in confidence of recent Greek initiative to seek association with EEC.² End FYI.

3. Separate message follows for London.³

Dillon

0. Source: Department of State, Central Files, 440.002/6–2759. Confidential. Drafted by Myerson. Sent to Ankara, Athens, Bern, Bonn, Brussels, Copenhagen, Dublin, Geneva, The Hague, London, Lisbon, Luxembourg, Oslo, Paris, Reykjavik, Rome, Stockholm, Vienna, Madrid, Helsinki, and Ottawa.
1. See Document 52.
2. Greece applied for membership in the EEC on June 8.
3. In telegram 11371 to London, June 27, the Department instructed the Embassy to seek clarification from the British Foreign Office on the nondiscriminatory objectives of the proposed Free Trade Association and its relationship to the British trading area. (Department of State, Central Files, 440.002/6–1759)