840.20/5–2951: Circular airgram
The Secretary of State to Certain Diplomatic Offices 1
Subject: French Agricultural Pool Proposal2
The revised agreed position of the United States Government regarding the agricultural pool follows. The paper, with background discussion, as it was finally approved,3 was airmailed on May 25.
1. In dealing with this proposal, United States representatives should have in mind the fact that the relative inefficiency of many branches of European agriculture have proven a major stumbling block to raising Europe’s living standards and that national policies for protecting agriculture are impeding further progress toward economic integration in Western Europe. Accordingly, the United States representatives in dealing with this problem should encourage the European countries to continue their efforts to develop a constructive solution for these problems, including (a) improving marketing and production techniques, (b) providing some degree of security for agricultural producers, (c) reducing or eliminating national barriers to the movement and sale of agricultural products.
2. The United States position is that a plan along the lines so far proposed by the French, although assertedly proposed to meet the problems set out in paragraph 1 above, would not be an effective or desirable means of achieving these objectives. Based on the summary and analysis below, it appears that the substantive provisions of both the Council of Europe proposal and of the French technical memorandum in their present form would result in clear disadvantages for nonpool members and no real assurances of net advantages for the pool countries as a whole in the first three stages of the plan, during which the principal effect of the plan would be to increase the degree of protection for member countries and to raise prices in the pool market. In fact, there is a real possibility of net disadvantage for the pool countries as a group in the first three stages. Furthermore, there is no firm commitment for the merger of European national markets (the fourth stage), which is to be achieved only at some indefinite future date. In general, the plan seems to be concerned principally with the organization of European [Page 37] markets to avoid surpluses and, at least initially, to avoid competitive marketing. It is the United States view that one of the basic problems of European agriculture is the improvement of production and marketing techniques and that any proposal should devote more attention to this problem.
3. While the present French plans as embodied in the Council of Europe paper and the technical memorandum are not satisfactory, constructive cooperation among European nations in the field of agriculture would appear feasible and desirable and should be encouraged. At this stage, the United States should not urge resort by the Europeans to any specific channel. However, the attention of the Europeans may be called to the possibility that the Food and Agriculture Organization and the Food and Agriculture Committee of OEEC could be of special assistance in analyzing European agricultural problems and in developing constructive proposals in line with the objectives suggested in paragraph 1 above. The prospect for a successful meeting would be enhanced if the experience of these two groups could be utilized. It would appear desirable, therefore, to arrange the conference at a time which would permit the delegates to have before them the advice of these bodies.
4. The position set out above should be communicated informally to the appropriate French officials in response to their previous request for the United States reaction to their plan, and to officials of any other government in any approach on the subject. The general tenor of United States comments to the French and other foreign officials should be such as would contribute to the achievement of a constructive solution of European agricultural problems.