275. Memorandum From the Special Representative for Trade Negotiations (Herter) to President Kennedy0

SUBJECT

  • Your meeting with EEC Commissioners Rey and Marjolin

You will be meeting the two Commissioners tomorrow morning at 10:30. George Ball and I will accompany them.

1. Who are they?

Jean Rey is the E.E.C. Commissioner responsible for the Community’s External Relations—a sort of Foreign Minister for the Community. He shares responsibility for the Trade Negotiations with Marjolin. A Belgian Liberal (i.e. moderate conservative) and former Minister, Rey is a middle-of-the-roader, pro-European and anti-De Gaulle; but like Hallstein he is strongly committed to making the Community work. He favors a liberal, outward-looking Community and is basically pro-American, but he bitterly resented our carpets and glass decision, on which he felt betrayed, and is making this trip partly to restore good relations.

Robert Marjolin, Vice President of the E.E.C. Commission, is responsible for economic and financial policy in the Commission. He is an old friend and associate of Jean Monnet. He made the mistake of running for office in the last French elections on an anti-Gaullist (Socialist) ticket, and losing.

2. Why are they coming?

The visit is primarily a probing operation. Rey and Marjolin will try to determine how firm is the United States position on the forthcoming trade negotiations. They will be reporting next Tuesday to the Council of Ministers of the Six. The Council will then determine the position of the Community at the GATT Ministerial Meeting later this month.

3. Our position on the trade negotiations

We have received substantial support both from outside the Community and within it for the basic principles of our position: [Page 594]

a.
A 50% across-the-board tariff cut with strictly limited exceptions;
b.
Substantially equivalent cuts in agricultural protection—whether tariff or non-tariff;
c.
The negotiations to cover reduction of non-tariff barriers.
d.
Less-developed countries would be expected to participate on a basis consistent with their economic development and would not be required to give full reciprocity.

Our objective for the GATT Ministerial May 16 is a firm decision to begin tariff negotiations in the Spring of 1964 on the basis of these principles.

The French are the principal problem. They have not yet shown their hand and apparently want to avoid being isolated as they were in January. But they are doing everything they can to throw road-blocks in the way of a rapid decision on the kind of negotiations we want. However, the other Five are apparently ready to use their considerable bargaining power on internal Common Market issues to bring the French along.

Our strategy is to keep the pressure on the Community for a basic E.E.C. commitment at the GATT Ministerial this Spring; and to work with the E.E.C. Commission (which negotiates for the Common Market in GATT) and with the Five to keep the pressure on the French. This strategy has been successful to date despite a French effort to divert attention from the central issue by emphasizing the fact that the United States tariff has more high rates than the Community tariff. But any sign we were wavering on the eve of the GATT Ministerial could weaken the common front of the Commission and the Five and help the French forestall a clear-cut decision by the Council of Ministers.

4. What you should tell them on the trade negotiations

a.
The United States is firmly committed to the success of the forthcoming negotiations. A substantial reduction of trade barriers and a higher level of international trade is in the interest not only of the United States but of the Community, which is more dependent on international trade than we are.
b.
The attitude the Common Market takes in the forthcoming negotiations is regarded here as a crucial test of the long-term intentions of the Community. The position of the Six at the GATT Ministerial will be viewed in that light.
c.
A substantial cut in industrial tariffs is only possible on the basis of a linear cut staged over a five-year period, with strictly limited exceptions. A decision on this point at Geneva is essential if we are to get on with the job of preparing real negotiations.
d.
Special problems (like high and low tariffs and non-tariff barriers) will have to be dealt with on their merits in the course of the negotiations but should not hold up agreement on the basic linear cut.
e.
Agriculture must be fully included in the negotiations if they are to provide a balance of concessions for all concerned. The techniques can be flexible, but the objective must be clear.

5. Poultry

You should tell them that a decision by the Common Market Council of Ministers to reduce the gate price for poultry (as the Commission has proposed) is most important to prevent this problem from continuing to poison our relations with the Community.

Christian A. Herter
  1. Source: Kennedy Library, National Security Files, Kaysen Series, Trade Policy, Trade Expansion Act, 5/1/63-5/15/63. No classification marking. In preparation for the President’s May 2 meeting with EEC Commissioners Jean Rey and Robert Margolin, Carl Kaysen forwarded this memorandum to President Kennedy under cover of a memorandum, May 1, that reads in part: “There may be some virtue in your not pressing our balance of payments problems as hard with them as you did with Mansholt. We are getting into the kind of bargaining atmosphere in which if we indicate too much eagerness on our part it may redound to our disadvantage.”