Foreign Relations of the United States, 1961–1963, Volume XIII, Western Europe and Canada

412. Telegram From the Embassy in the United Kingdom to the Department of State⁰

London, January 31, 1963, 7 p.m.

2890. Brussels for Embassy and USEC. Paris for Embassy and USRO. Policy. Following Embassy assessment of post-Brussels breakdown situation in UK and suggestions for future policy lines:

1. Statements by PM and other senior Ministers make clear HMG not so far planning to move off in radical new policy direction.

2. While UK for moment buoyed up by support from “friendly Five”, this feeling may be replaced when things cool down by further anxiety about British place in the world.

3. With few exceptions, government reactions to collapse of UK-EEC negotiations carefully avoid recrimination and reflect intention to maintain close but informal ties with friendly Five.

4. Unexpected setback at Brussels has left Macmillan Government without mainspring of its policy and seriously damaged its chances of improving its position with electorate in anticipation of general elections in next 12–18 months.

5. Plans announced thus far include full participation in Kennedy round and intensification of effort to strengthen domestic economy.

6. Although Common Market opponents delighted with outcome and cautioning Government about continuing to pursue “will-o-the-wisp” in Europe, there is still surprising degree of support for government’s European policy. Some of this due to “closing of ranks” against French but some based on realization that going into Europe right policy for UK (at least no comparable alternative). However, this mood may be dissipated soon and, if intervening election brings labor in, attitude toward Europe likely to be modified.

In light above considerations, we have been thinking along following tentative lines:

1. For psychological comfort and assurance that US will not establish closer ties with Six to neglect of UK, consideration might be given to establishment of joint US-UK Ministerial meetings on trade and economic affairs along lines arrangements with Canadians and Japanese. This suggestion has obvious disadvantage of emphasizing “special relationship” but perhaps presentational benefits for UK may be overriding.

2. HMG determination to pursue expansionary policy at home plus any adverse economic impact of exclusion from EEC may result in balance-of-payments difficulties later this year. If British worried about sterling, we should give assurances of readiness to provide appropriate support.

3. We of course support vigorous implementation of TEA suggested Cedto 700 to Department.¹ As PM indicated in his television speech January 30, liberalization of world trade and payments will have central role in new UK program.

4. On assumption our historical determinism will be proved right, “friendly Five”, EEC Commission and UK should be encouraged to look at all future economical and trade policy in terms of avoiding action which will make it more difficult for UK to join EEC at some more auspicious time. Also positive action to bridge gap between UK and Six should be encouraged. For example, UK might, in expectation of compensation in Kennedy round, unilaterally reduce tariff rates above CXT to level of CXT, or make unilateral across-the-board reduction. (Any such course of action would be unprecedented and obviously would require exceptionally bold POL decision). Our actions should also be tailored to same end, especially where EEC decisions likely to be against our own interests. For example, if it appeared agreement on community wheat price probable at substantially above French level, we should press for standstill at expense of immediate progress on CAP. Similarly, move toward projectionist common energy policy should be discouraged. In general, EEC progress in immediate future might be forced on areas which would not ultimately raise great difficulties or UK-harmonization of social charges, mobility of labor, etc., instead of CAP and energy policy.

5. Suggestions have been made that to take advantage of (A) mood for action to minimize blow to European unity and free world (something akin to post-EDC situation) and (B) clear division between French and rest on defense policy, UK might be encouraged if it wishes to take initiative in creating including invitation to French a political community. While covering POL and cultural matters, most important feature might be common defense policy developed in context of NATO and supporting Nassau proposals. This approach appears reverse original notion of EEC membership as means of getting UK into European political movement but there seems to be no formal reason for not starting at other end since French blocked economic approach. Since major hurdles to EEC would not be present, opposition might be somewhat reduced and negotiations could presumably be quickly concluded during present government’s term of office. HMG would probably not jump immediately into arrangements with large supranational element and majority voting and thus fall short of our long-term objectives in Europe. But agreement could provide for progress in this direction later and, in any event, other avenues of advance toward European POL union apparently not open in present circumstances.

Bruce

0. Source: Department of State, Central Files, 375.800/1–3163. Confidential. Repeated to 19 other European missions.
1. Cedto 700, January 23, reported that the British were preparing recommendations on the course of action to be followed if the meeting with the Common Market representatives resulted in a break-off of the negotiations for British entry. (Ibid., 375.42/1–2363)