286. Airgram From the Mission to the European Office of the United Nations to the Department of State1
SUBJECT
- Report No. 19—U.S. Delegation to Sixth Round of GATT Trade Negotiations
1. Summary
On July 13, the Trade Negotiations Committee (TNC), in a final session before the summer recess, heard the Director General of the GATT review the status of negotiations and accepted the agreed portions of the report of the Tropical Products Group on procedures for negotiations on such products. During the week of July 12, a subcommittee of the TNC started the examination of developed countries’ lists of exceptions of [Page 731] interest to the developing countries and completed its review of the lists of the United States and the United Kingdom. The first meeting of the sector group on steel was held on July 14. Bilateral negotiations with Canada were continued.
2. Meeting of Trade Negotiations Committee
The Trade Negotiations Committee (TNC) was convened on July 13 for a final session before the summer recess in order a) to review the status of negotiations and preparations for resumption of work in September and b) to consider the report from the Tropical Products Group on procedures for negotiations on such products.
a. Status of Negotiations
In reviewing the status of negotiations, the Chairman of the TNC, Mr. Wyndham White, referred to the extensive bilateral discussions on industrial products which had been taking place since the confrontation and justification exercise on industrial exceptions. These highly technical and time-consuming discussions have clarified a number of details concerning exceptions and offers. Mr. Wyndham White considered that the bilateral discussions had made significant progress in indicating where multilateral discussions are called for (sector discussions for some industrial products) and in defining negotiating desiderata regarding exceptions and offers.
With respect to negotiations on agricultural products, Mr. Wyndham White considered that a useful start had been made in the cereals negotiations, based on proposals tabled in May and subsequent discussions. He noted that technical discussions now underway should be continued in September with a view to an early resumption of general discussions aimed at developing a cereals arrangement. He also referred to the discussions recently concluded on the elements of protection to be negotiated and the scope of offers to be made on other agricultural products as a valuable prelude to the negotiations themselves. He said the present program calls for tabling offers on agricultural products other than grains on September 16 and the beginning of active negotiations thereafter.
Mr. Wyndham White noted that there would be a meeting on July 19 of the NTB Subcommittee’s Group on Dumping. Otherwise, he commented, the non-tariff barrier work has either been deferred until a later stage in negotiations or was being conducted in connection with discussions on individual products.
Mr. Wyndham welcomed the fact that a number of developing countries were participating in the negotiations on the basis of agreed procedures. He noted that the examination of selected exceptions lists of interest to these countries had started. He noted also that Poland had [Page 732] made an offer, that some bilateral talks have taken place, and that multilateral discussions should be held in September.
With respect to the general progress of the negotiations, Mr. Wyndham White stated that negotiations were proceeding in general accordance with the anticipated timetable. He added that participants must seriously consider the question of timing and that negotiations should be fully engaged for all product areas and by all countries in the fall in the hope that negotiations could be brought to their final stage by early 1966.
There was no comment in the TNC on this review.
b. Tropical Products
Mr. Wyndham White noted that the Tropical Products Group in its report on procedures for negotiations on such products (TN.64/TP/3) had not reached agreement in all areas. He believed there was sufficient agreement on procedures that negotiations could get started. He urged that there be no further procedural discussions and the tropical products negotiations start on the basis of the agreed portions of the report of the Group. The TNC accepted this proposal and statement2 that tropical products offers should be tabled on September 16, with each country free to determine its own basis for making offers, and with multilateral confrontation to follow the tabling of offers.
3. LDC Examination of Linear Country Exceptions Lists
a. U.S Confrontation
At the opening of the two week session of the TNC Subcommittee for examination of developed country exceptions of interest to less developed countries (LDC’s), the U.S. list was examined in the first two sessions on July 12 and 13. Delegations of linear countries attending included the U.K., EEC, Japan, Sweden and some other EFTA countries part of the time. Non-linear countries included Argentina, Brazil, Canada, Chile, Ghana, India, Indonesia, Israel, Jamaica, Malta, Nigeria, Pakistan, Peru, Portugal, Rhodesia, Spain, UAR, Uruguay and Yugoslavia.
There was some open recognition (including that of Ambassador Lall of India) that the United States had tried to keep exceptions on items of interest to the LDC’s to a minimum in the nonagricultural sector. The LDC’s pressed, of course, in all cases for improvement in the U.S. offers. The LDC’s did not query us on who is and is not an LDC, did not challenge our principle of excluding items because of the non-participation of principal suppliers in the negotiations, did not inject the long-term textile arrangement into the discussion and did not waste time in arguing over excepted items in which they have no trade interests.
As regards our economic exceptions, the LDC’s, expectedly, expressed their greatest concern over U.S. exceptions on certain textiles [Page 733] (especially Uruguay and Yugoslavia) and leather products (India, Spain and others); they argued that their interests in these and other products warranted U.S. reconsideration of excepted items. India said it wished to discuss bilaterally the possibility of U.S. ex-outs, and offers on various handmade articles.
The Peruvian representative pressed hard on the importance which Peru attaches to the need for U.S. liberalization on lead and zinc and was echoed by Yugoslavia. Our explanation of the reasons for these mandatory exceptions included reference to the recent Tariff Commission report3 which attracted their interest. They will follow developments with interest and press for tariff reductions as well as the lifting of quotas. The UAR, Nigeria and Brazil, to a lesser extent, objected to the U.S. exclusion of crude petroleum. The comments of several LDC’s made clear that U.S. explanations of mandatory exceptions based on the lack of legislative authority do not in their view relieve the United States from the commitments undertaken at the Ministerial meetings in 1963 and 1964 and in Part IV of the GATT4 to keep exceptions on items important to LDC exports to a minimum. Several of them emphasized that the United States could and should rely more on adjustment assistance programs. We emphasized that the existence of adjustment assistance programs had already played a part in reducing our exceptions list but could not be expected to solve all of the problems.
The fact that the United States introduced an additional list of excepted items into the discussions on the second day did not bring forth critical comments. A short explanation that this was the result of further study of lists of interest submitted by participants was accepted and the fact that it related to items of interest to Israel, Yugoslavia and Spain was not disclosed at the request of the Israeli and Yugoslav delegations. The U.S. delegation offered to discuss these additional items later in the week if any delegations so desired. As yet no requests have been received.
Of the so-called borderline countries, Yugoslavia, Israel, Spain and Portugal participated in the meeting without challenge. Yugoslavia and Spain took an active part in the discussions but Israel went on record only once in regard to a minor technical point. Portugal spoke briefly only about items of interest to its overseas territories.
The LDC’s welcomed the U.S. willingness to undertake bilateral discussions to clarify technical and statistical questions as well as to exchange further views on U.S. offers related to their specific trade interests. Bilateral meetings have already been held with representatives of Rhodesia, Malta, Peru, India, Israel, Yugoslavia and Chile.
[Page 734]b. U.K. Confrontation
The confrontation on the short U.K. exception list took only one session on July 14. The U.K. defense and justification was primarily based on: (1) the depressed status and process of reorganization in the industry involved; (2) the extensive degree of duty free treatment given to Commonwealth LDC’s; and (3) the existence of disparities between U.K. rates of duty and the rates of other developed countries. The LDC comments were moderate in tone and the U.K. received some compliments on its general attitude towards LDC problems. The U.K. effort to shift the burden for improving its offers on to other developed countries (disparities) and on the Commonwealth countries including LDC’s (preferences) was successful. India and Pakistan said that they wished to take a constructive and positive approach when they are asked to forego present advantages in the U.K. market but that they would require compensating advantages in other developed country markets.
4. Sector Discussion on Steel
The first meeting of the sector group on steel was held on July 14. The United States, EEC, ECSC, U.K., Japan, Austria, and Sweden are the initial members of this group.
It was agreed that the group’s work should cover “steel mill products,” which includes BTN items in Chapter 73 of the EEC tariff schedules that are under the jurisdiction of both the ECSC and the EEC. Not all items in Chapter 73, however, are included. During the summer recess countries are to develop for “steel mill products” a concordance between their tariff schedules and the EEC tariff schedules. The group will reconvene on September 8 to develop a rough concordance among member countries’ tariff schedules on the basis of the individual country concordances. A similar procedure will be followed with respect to ferroalloys.
There was general agreement that until a “map” of concordances is developed it is premature to discuss what road might be taken to achieve the group’s objective of maximizing tariff reductions in the steel sector.
5. Negotiations with Canada
The 25th and 26th United States and Canadian meetings marked the beginning of discussions on agricultural duties and agricultural nontar-iff barriers. The procedure is for the Canadians to review the U.S. tariff item-by-item and indicate those items on which they wish to have the rates reduced. The U.S. side, using a concordance, determines the corresponding Canadian tariff item. Where appropriate both sides examine the possibility of matching rates, as has been done on certain agricultural items in the past, or the U.S. side may indicate its interest in a reduction on the Canadian side.
The Canadians have included in their requests fifty percent reductions and in some cases elimination of the U.S. duty under either Section [Page 735] 202 (the five percent authority) or Section 212 (the authority to eliminate duties in excess of five percent on agricultural products under certain conditions) of the TEA.5 The U.S. team has notified them that, while it is willing to listen to such requests, there can be no assurance that we will use the authority of the latter section.
In the course of these discussions the Canadians have reiterated their long-standing and oft-repeated plea for elimination of the U.S. quota on Canadian cheddar cheese. They have also complained about the refusal of the New York State Government to send milk inspectors to nearby Canadian dairy farms. This refusal precludes Canadian milk producers from selling over the border because they cannot meet the state’s sanitary requirement that all milk marketed in New York bear an inspector’s seal of approval.
As a follow-up to an earlier discussion, the Canadian Delegation also submitted a paper noting Canada’s interest in the elimination of the manufacturing clause in the U.S. copyright law.6 The bill revising this law which is now before Congress7 retains a slightly modified version of this clause which has protected U.S. printers since 1891.
- Source: Department of State, Central Files, FT 7 GATT. Confidential. Drafted by W. Kelly, Northrop H. Kirk, Guy A. Wiggins, and Courtenay P. Worthington, Jr., on July 15, and approved by Helen L. Brewster. Repeated to 51 diplomatic missions.↩
- Director General Wyndham White’s July 13 statement was not found.↩
- Not further identified.↩
- See Document 274.↩
- Reference is to the Trade Expansion Act of 1962, P.L. 87–794, approved October 11, 1962; 76 Stat. 872.↩
- The Canadian paper has not been found, but the reference is to the manufacturing clause in Section 3 of Chapter 565, approved March 3, 1891; 26 Stat. 1107; text as amended is codified in 17 USC 16.↩
- An omnibus copyright revision bill (S.1006; H.R. 4347, 89th Cong.), introduced February 4, 1965, to substantially revise copyright law, was not adopted by Congress because of conflicting views expressed by interested groups in hearings before House Judiciary Subcommittee No. 3 and the Senate Judiciary Patents, Trademarks, and Copyrights Subcommittee.↩