235. Circular Telegram From the Department of State to Certain Posts1
1970. From Governor Herter. Subject: Kennedy Round Talks with Powell. Following are highlights of discussions on Kennedy Round held April 20 and 22, with U.K. group headed by Sir Richard Powell.
- 1.
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We made clear that we do not intend precipitate crisis at May 4 Geneva meeting. Ministers should take note of progress to date, urge further efforts during summer to settle rules. In speeches, we hoped ministers would express disappointment at slow pace. We suggested that in addition to confirming 50 percent rule, TNC report might confirm aspects of the disparities rule already agreed so as to prevent future backsliding. Powell agreed conference should be low key and resolution bland. He resisted idea of confirming partial disparities rule, for fear the EEC approach would thus become sanctified without our having got qualifications required to make it acceptable. We replied that any written endorsement of 2:1–10 rule must be made conditional on agreement on criteria. Issue was left in agreement to see what language on this point GATT Secretariat and TNC could come up with next week.
Throughout the talks, British expressed skepticism that acceptable disparities formula based on 2:1–10 rule would ever be achieved.2
- 2.
- On issue of timing of tabling offer-exceptions lists, we and British agreed we should for present hold to September 10 date of draft TNC report, keeping up pressure for early resolution of outstanding rules. We discussed possibility of holding another Ministerial Meeting before August to review progress on rules and re-examine timetable in that light, but left decision on this open pending developments at May 4 meeting.
- 3.
- On Rey’s visit to London, Powell said that if EEC suggested bilateral discussions on disparities with U.K., British would not want to rebuff them. We had no objection provided such bilateral talks were [Page 636] aimed at clarifying a general rule. Both sides agreed that extenuated bilateral talks should be avoided.
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On agriculture, we reported our feeling that to press for resolution any substantive issue before May 4 would be futile. TNC report should make clear the issues that divide us in agriculture, but leave it at that. Powell agreed with this approach. He believes best chance for agricultural settlement will come when negotiations on industrial products are near success, thus creating strong lure to those anxious for industrial concessions but aware they are unobtainable without concomitant agricultural liberalization. His tactic would therefore be to let industrial phase of negotiations precede agricultural by a few steps, though certainly not to let momentum of latter die. Nield of Agriculture Ministry added point that if industry got too far out in front of agriculture, there was a danger of split between agricultural exporting and importing nations which would lead to withdrawals on industrial side.
Nield was pessimistic on possibilities getting meaningful access deal from EEC; he believed French would be more adamant against this than Germans have been over grains prices.
- Source: Department of State, Central Files, FT 13–2 US. Confidential. Drafted by Auchincloss (STR), cleared by Joseph A. Greenwald (E/OT), and approved by Roth. Sent to eight posts in Europe and to Tokyo.↩
- The European Economic Community developed the 2:1/10 disparities formula in late December 1963 and presented it to the GATT Tariff Plan Subcommittee in January 1964. The formula provided that a disparity exists where a high tariff country maintains a tariff twice that of another participant in negotiations and, except in semi-manufactured products, where at least 10 percent ad valorem separates the two tariffs. In case of a disparity, the European Economic Community proposed that the high tariff country cut its tariff by 50 percent and the invoking country by 25 percent. (Tagg 1841 from Geneva, February 25, 1964; ibid.) No acceptable disparities formula was achieved.↩