284. Memorandum From the Special Representative for Trade Negotiations (Herter) to President Kennedy0
SUBJECT
- Poultry “Retaliation”
The EEC Council of Ministers, meeting on July 30,1 once again failed to provide relief for U.S. poultry imports into the Community. As it announced, the Council merely instructed the EEC Commission “to renew contact” with the United States “with a view to exploring the possibilities of agreement” and to report back to the Council in September. In sum: the Council itself took no decision to reduce the present poultry restrictions; it did not give a useful negotiating instruction to the Commission; it again procrastinated.
I believe we must abandon our effort to seek relief through consultation or negotiation and must compensate for the recent EEC restrictions on poultry by our withdrawing from the EEC equivalent tariff concessions.
In the light of interagency deliberations, I recommend the following actions and target dates:
- 1)
- August 5—Through our missions abroad, we give notice to the EEC Commission, to the individual EEC member states, to other affected governments, and to the GATT Executive Secretary of our intention to withdraw tariff concessions of benefit to the EEC and indicate the timetable we have in mind for carrying out there withdrawals.
- 2)
- August 7—We announce the scheduling of public hearings on items with respect to which we are considering withdrawing concessions.
- 3)
- September 5—Public hearings, ending about September 10 (4 working days).
- 4)
- September 16—Presidential proclamation, effective in 30 days, withdrawing concessions on articles involving about $46 million of U.S. imports from the EEC. At the time of issuing the proclamation, we would inform the GATT contracting parties in accordance with GATT procedure.
- 5)
- October 16—The withdrawals would go into effect.
The list of items which we would consider for withdrawal accounted for slightly more than $100 million of U.S. imports from the EEC in 1962 (list attached—Tab A).2 After receiving public views on this list, we would select for ultimate withdrawal items involving trade of approximately $46 million.
The list of eligible items has been formulated by interagency committees to satisfy the following criteria:
- 1)
- We proceed in accordance with GATT Article XXVIII. Under this Article we are limited to increasing duties on a most-favored-nation basis on items on which tariff concessions were initially negotiated with the EEC or individual EEC member states. (We cannot impose quotas or discriminate against the EEC in duty increases.)
- 2)
- Items eligible for withdrawal should involve U.S. imports supplied principally by the EEC. Where non-EEC trade is affected, compensation will have to be offered.
- 3)
- The impact of withdrawals should affect trade of all EEC countries, but with emphasis on France and Germany.
- 4)
- The withdrawal list should include both agricultural and industrial items, should not include items likely to cause undue hardship for U.S. producers or consumers, and should not be deliberately protective.