Foreign Relations of the United States, 1964–1968, Volume VIII, International Monetary and Trade Policy

355. Telegram From the Mission to the European Office of the United Nations to the Department of State¹

Geneva, May 15, 1967, 0338Z.

3663. For Bator from Roth.

1. This will be a brief report before going to bed.

2. As of 3:30, Japanese bilaterals still going on in Mission and grains discussions endlessly bickering in Bocage over basing points. Everything else on grains except Japanese food aid settled.

3. After impossible bilateral with Rey and Hijzen at 10:00 and subsequent Rey discussion with Wyndham White, it was apparent that no further movement in key chemical section was available. Mike and I had several talks with Wyndham White and persuaded him not to stop the clock as this would merely allow the negotiators to go to bed.

4. Finally, we decided that the only way to break the impasse was to give Wyndham White a compromise decoupage package and then to persuade him to issue it as his own suggestion.

5. We therefore made the following proposal:

For chemical products in BTN Chapters 28–39

A. Firm KR commitment

1. EEC cuts 20 percent generally. 30 percent on rates 25 percent ave and over. 35 percent on Swiss annex items.

2. UK cuts 20 percent generally. 30 percent on rates 25 percent ave and over.

3. US cuts 50 percent generally. 20 percent on rates 8 percent ave and under.

4. Japan, Switzerland, and all others commit full offer in KR.

B. Conditional package

1. EEC, UK, and Switzerland make additional commitment on NTB or other appropriate concession.

2. US converts ASP and lowers rates where indicated to general level of 20 percent.

3. EEC and UK make remaining cuts to 50 percent overall reductions;UK cuts 33–1/3 percent rates to 12–1/2 percent.

6. The approximate consequence of the above formula is a U.S. overall cut of somewhere between 42 and 43 percent against a combined EEC-Japan-UK cut of somewhere between 25 and 30 percent. Given the confusion of the formula and a certain European logic the figures do not come out too badly. Obviously the Community will in the first instance reject it, but at least we will now have a Secretariat recommendation that is acceptable to us.

7. We now plan to call a meeting of the heads of delegations of the EEC, UK, Japan, and U.S. for 11 o’clock tomorrow. We have a little more time left, but not very much as this situation can begin to unravel very quickly.

8. don’t worry, we will not let this unravelling happen, but we must push as far as possible in an effort to avoid putting the President in a most difficult domestic situation.

9. We are still in deep negotiations with the Japanese and bickering with the British. I am sure our problems with the latter can be solved, and ultimately the Japanese must come along if all other pieces fall together.

Goodnight Potatoes.

Tubby

1. Source: Department of State, Central Files, FT 13–2 US. Confidential; Flash; Limdis-Potatoes. Received on May 15 at 12:13 a.m. and passed to the White House.