40. Letter From President Kennedy to the Chairman of the House Ways and Means Committee (Mills)0
Dear Mr. Chairman: I have your letter of April 271 concerning United States agricultural exports to the European Economic Community. I very much appreciate your writing to me about this highly important question.
I am fully conscious of the necessity of protecting and improving access for American agricultural products into the European Common Market. A great deal of attention has been given this problem and I shall see that it remains high on the list of priorities.
There is no doubt that the European market for the produce of American agriculture is undergoing evolutionary changes. Some of these changes result directly from the formation of the European Economic Community (the Common Market). Others are a consequence of the vaulting improvement in farm productivity made possible by agricultural technology.
The problem is by no means a simple one. Indeed I suspect its complexity has to some extent obscured the efforts already made to develop adequate solutions.
Our efforts have extended over a considerable period of time. Even at an early stage in the tariff negotiations recently concluded in Geneva, [Page 98] representatives of the State and Agriculture Departments discussed the problem at length with the Commission of the European Economic Community as well as with the Governments of the Six member countries during a series of bilateral consultations.
The negotiations at Geneva resulted in adequate arrangements with respect to 70 per cent of our agricultural exports to the European Economic Community. We obtained valuable concessions, as well as compensation, for the tariff changes implicit in the formation of the European Economic Community with regard to cotton, soybeans, tobacco, citrus fruits and many other products. This does not mean, however, that I am satisfied to leave it at this. I am determined that we shall obtain further concessions once I have the negotiating authority that will be provided by the legislation now under consideration by your Committee. In fact, with respect to tobacco we already have an understanding with the European Economic Community that further negotiations will be held after the new trade bill has been approved.
The major difficulties in the Geneva negotiations narrowed down to a range of commodities representing less than 30 per cent of our agricultural exports to the EEC, or about 10 per cent of our total exports to that area. The problem arose in connection with grains and livestock products for which the EEC proposed to include variable import levies in their community-wide Common Agricultural Policy. The specific commodities of major interest to U.S. producers and exporters include wheat, feed grains, rice and poultry. During the Geneva negotiations, the EEC countries had not reached agreement on the provisions of the Common Agricultural Policy, or on the common price levels to be achieved. The EEC still has reached no agreement on common price levels. The EEC was not, therefore, prepared to include these commodities in negotiations under GATT Article XXIV (6) as they had not been able to work out their community-wide trade problems in these commodities with each other; and, therefore, they could not negotiate with outside countries.
Originally, the EEC had intended to withdraw concessions previously made to us on these commodities and to balance the bargain by offering concessions on other products. Had this happened, we would have had absolutely no legal protection with respect to our future trade in these important farm commodities.
We, therefore, successfully pressed our EEC friends not to insist on immediate withdrawals and instead sought to obtain the best possible interim assurances for these products, and to impress the Six and the Commission with the importance the United States attached to longer term market access. Despite our limited bargaining authority under existing trade agreements legislation, I directed that the conclusion of the [Page 99] negotiations be deferred until we had secured the most advantageous commitments then obtainable on these agricultural commodities.
The Secretary of Agriculture and the Under Secretaries of State and Agriculture on a number of occasions negotiated with the Commission and with Governments, on these items. My Special Assistant, Mr. Howard Petersen, later went to Brussels for the final stages of these negotiations. These key men continue to give this matter their personal attention.
For quality wheat, we obtained a commitment to protect our trade interests from any possible adverse effects of the Common Agricultural Policy while a longer term trade arrangement is negotiated. This commitment, in fact, covers the great bulk of our wheat exports to, the EEC. For soft wheat, corn, sorghums, poultry, and rice, however, we obtained a commitment to negotiate trade arrangements at an early future date. This is a significant step, because we preserved all our legal rights on these commodities for use in negotiations. If withdrawals had been made as the EEC first proposed, we doubt that we would have been able to keep the door open for future negotiations on these commodities. Furthermore, this maintenance of our legal rights serves to inhibit the adoption by the EEC of excessive levies for bargaining purposes because under the GATT, this would only increase their obligations for compensatory adjustments.
The EEC and the member countries are currently developing detailed regulations for implementation of their Common Agricultural Policy for wheat, feed grains, and poultry, among other commodities. These regulations will involve the use of variable import levies during the transitive period. These interim arrangements, including the variable levies for these commodities, will become effective on July 1, 1962. For many other commodities of key importance to the U.S.—such as fruits, cotton, tobacco and soy beans—the EEC proposes to use techniques other than variable import levies.
We are keeping a close watch on these regulations as they are evolved to make sure that they develop in a manner as favorable as possible to our interests. We have sought, and will continue to seek modification of the regulations on a pragmatic basis to protect our export interests. On poultry, for example, we have undertaken to work closely with the Commission and with the Six to assure that access for our poultry is continued through import arrangements which will not substantially change our competitive position in the EEC market. Representations are now being made at the highest level to cushion the impact of the proposed new poultry system, scheduled to go into effect this July 1, pending the conclusion of further negotiations. At the same [Page 100] time we have made it clear that we would demand compensation if access to our poultry exports were restricted in any of the six countries.
I am satisfied that everything possible has been done to impress officials of the Six and the Commission with the critical importance that we attach to the maintenance of our agricultural exports. I stressed this point to President Hallstein on his recent visit. We are sending a technical mission to Europe next week to discuss further our problems on those commodities.
We shall do everything within our power to ensure that our agricultural products receive a fair break in the markets of the world. If we are to succeed, however, we must have bargaining leverage such as that provided in the Trade Expansion Act.
Your leadership in connection with that legislation has been of vital importance to the attainment of the objective we both seek.
Sincerely,
- Source: Department of State, Central Files, 440.119/5–2362. No classification marking. No drafting information appears on the soarce text, but a memorandum for the White House, dated May 17, states that it was drafted in the Department of State after consultations with the Departments of Agriculture and Commerce. (Ibid., 440.119/5–1762)↩
- Not printed. (Ibid., 440.119/4–2761)↩
- Printed from a copy that indicates the original was signed by President Kennedy.↩