36. Summary of Discussion0
SUBJECT
- U.K. EEC Negotiations
The Prime Minister opened the discussion by saying he would like to tell the President about the status of the U.K.-EEC negotiations. Much of the spade work had been done, and by the end of July a general pattern should have been established on major issues. The British Government would then have to make up its mind. On September 10 the Commonwealth Prime Ministers would meet. The Government would then decide whether to put a proposal to proceed before Parliament. The Prime Minister could not honestly tell now what the answer would be. Obviously, Britain had to take care of Commonwealth interests and those of its friends in EFTA. There would have to be some continuation of the advantages Commonwealth members now enjoy, as no British Government could stand which tried to put forward an agreement regarded as abandoning them. Furthermore, it would be wrong to abandon Britain’s EFTA friends, and reasonable arrangements would have to be made for them. With one half of Europe at least temporarily lost, it would be a tragedy if the remainder was divided into two blocs. He wanted the European Community to be not an inward-looking grouping but an outward-looking and developing organization. The Prime Minister hoped that we would not take a too-unfavorable view of the neutrals; they were part of European civilization and tradition. Some, [Page 85] such as Finland, had neutrality imposed on them by their geographic situation; Austria was neutral, but he had observed himself the Austrian delight at the Soviets’ departure.
The Prime Minister expressed his appreciation for the help we had so far given in the British application; he would describe our attitude as benevolent neutrality. The Prime Minister thought he could carry the U.K. with him into the Common Market; it was an exciting and dramatic moment. The British people thought that joining the Common Market was historically right and sound economically and politically but the task would be impossible if it were portrayed as a betrayal of the Commonwealth, and especially the old Commonwealth countries. If Britain succeeded, it would play a great part in Europe and bring Europe closer to America; if it failed, Britain’s whole policy would have to be reconsidered. This would involve an agonizing reappraisal. If the views of some countries which wished to keep Britain out prevailed, it would mean that Europe was pursuing an inward-looking policy reverting to the days of Charlemagne.
The Prime Minister remarked that two major problems confronted him; the Brussels negotiations and, secondly, persuading the British population that joining was in accord with their traditions and interests. It was the biggest decision by the U.K. since Britain lost its last foothold on the Continent. Leadership had fallen to him, but he would not predict how things would work out; the whole project could easily be overthrown, even at the last moment, by an appeal to emotion. The Prime Minister said it was his responsibility to lead the country away from its traditional approach, and there were indications that the new larger concept was growing. Nonetheless, there was still strong, even violent, opposition to joining by important segments of British opinion.
The President noted that this administration, as had the previous one, supported the Common Market for political, not economic reasons. Ambassador Bruce had pointed out that the Common Market was not in U.S. economic interests. The President commented that Britain’s joining Europe could be the biggest action since the Marshall Plan. He recognized the Commonwealth problem, and realized that the Labor Party had not committed itself. We had to balance our economic interests and the political advantages we foresaw from the Common Market; if after Britain joined and if her dependencies also went in, this would leave the U.S. and Latin America outside. Obviously, the political consequences of the economic effects of such a situation would be very serious. Britain could not take care of everyone in its wake as it joined. Our balance of payments problem would be accentuated, and possibly cause us to withdraw our forces overseas, now costing us $3 billion annually, from around the world. While we realize that certain built-in preferences must be temporarily continued, we think there should be commodity [Page 86] negotiations on a world-wide basis, with preferences terminated by a fixed date.
As to the neutrals, the President remarked that we had every sympathy for Austria, and wanted to proceed carefully; we were less sympathetic toward Sweden and Switzerland which wanted the best of both worlds. The President noted that Mr. Heath and Mr. Ball had had a good talk,1 and there was understanding of, if not agreement on, our respective positions. We recognized that the decision was up to Britain, and we might not be able to influence it. We were prepared to make many sacrifices but could not go all the way.
Mr. Ball explained in some detail the U.S. position with respect to Commonwealth preferences and the EFTA neutrals. Temperate zone agricultural products posed the most serious problem as far as Commonwealth preferences were concerned. In the recent Geneva GATT negotiations we had tried unsuccessfully to obtain assurances that our position would be protected; if Canada, Australia, and New Zealand were to be granted an assured market for wheat, this would cause difficulties here. As to products now receiving preferences in the U.K. market, we advocated global solutions for the great export crops. We could not, Mr. Ball said, accept continuation of preferences, without a termination date, until an agreement was worked out. As to industrial preferences, Mr. Ball said we saw little justification for the continuation with respect to high-cost products from the older Commonwealth countries; and have told the Canadians as much. We supported the British effort to put industrial raw materials on the free list. Mr. Ball paid tribute to the British attitude and actions toward low-cost manufactures, and encouraged the U.K. to disinvoke Article 35 at the conclusion of the current negotiations with Japan, as we understood they were planning to do.
Mr. Ball explained our concern about preferences for African tropical agricultural products, stemming from our conviction that these would cause acute disturbances in Latin America. We recognized the U.K.’s situation with respect to the African Commonwealth countries, that the U.K. could hardly do less for them than had been done for the former French African territories. Our approach was on a commodity basis, and we hoped agreement could be reached by the end of five years. Reverting to the problem of the EFTA neutrals, Mr. Ball emphasized that had we viewed the Common Market only as a customs union we would have had grave doubts about giving it our blessing. We were convinced that our new trade legislation would greatly ease the problem for non-member countries by achieving further liberalization of [Page 87] trade, including the Community’s. Special attention was required for hardship cases, but they should be approached as trading problems.
In summing up, the Prime Minister said he hoped Britain could enter the Common Market. All its influence would be used for liberalization, as liberal trade is part of an old tradition for the U.K. He agreed with Mr. Ball about raw materials. He thought that if Britain were rebuffed it would try to build up more preferences and fight to live as it had in the past. He said he must warn the President that pressures against entry, compounded of tradition, a continuation of national sentiments, instinct, and a dislike for things abroad, were very strong. He was convinced he could teach new attitudes, but the U.S. must help occasionally. The Commonwealth countries asked what would happen to them after the transitional period; Britain replied they must adjust. But, they inquired, how? Some of the smaller things caused the greatest trouble; the Prime Minister cited the example of old soldiers settled in New Zealand and taught to grow pineapples. They could do nothing else. Were whole communities to be allowed to suffer? Time was required to permit adjustments.
Present at the meeting in addition to the President and the Prime Minister were:
- U.S.
- Under Secretary Ball
- Ambassador Bruce
- Mr. McGeorge Bundy, White House
- Mr. Pierre Salinger, White House
- Mr. William R. Tyler, Acting Assistant Secretary of State
- Mr. William C. Burdett, Acting Deputy Assistant Secretary of State
- Mr. Joseph Sweeney, BNA
- British
- Sir Norman Brook, Secretary to the Cabinet
- Ambassador Ormsby Gore
- Sir Evelyn Shuckburgh, Deputy Under Secretary of State, Foreign Office
- Mr. Harold Evans, Public Relations Adviser
- Mr. M.A.M. Robb, Information Minister, British Embassy
- Mr. John Thompson, First Secretary, British Embassy
- Mr. Philip de Zulueta, Private Secretary to the Prime Minister