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

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

Geneva, May 15, 1967, 1559Z.

3668. GATT—For STR and Bator from Roth. This will be the last roundup until later tonight.

1. We have just settled with the UK and we are in final stages with Japanese. I hope to clear the latter up this afternoon.

2. The grains negotiation has been a most trying and difficult one, partly because of the Canadians, but especially because of the Australians who have been quite impossible. Negotiations have been going on intensively and without stopping for several days and nights under the general leadership of Schnittker and Hedges. Hedges is absolutely exhausted but has done a fine job and everything appears to be just about buttoned up except the question of Japanese food aid. I hope to crack this one in the late hours tonight.

3. At a meeting this morning at the Bocage with the four principals, Eric² gave out our chemical proposal (reftel Geneva 3663)³ as his own suggestion as part of overall package. He said he was not recommending package as it entailed hard political decisions for all governments, but that he saw no other way at this point to save KR. Main areas he outlined were chemicals, nongroup agriculture and steel.

4. I asked whether his recommendations for nongroup agricultural package between US and EEC was on basis of exact reciprocity and he indicated to us later that US should attempt to come as close as possible to absolute reciprocity.

5. In steel, Powell accepted his suggestion to cut specifics by 20 percent. This in effect allows both the Community and ourselves to maintain our offers, so steel is now solved.

6. Both Rey and I, however, said that we would have to consult our authorities as the proposals went far beyond our mandates (in his case he will talk to the 111 Committee and perhaps some Ministers).

7. I have spoken on this package only to the senior advisers from Washington and have said that I do not want anybody else on the staff, no matter how senior, to know about the proposal. I also said that I had authority from the President to settle on the basis of the proposed package if we could work it out. We are now in the process of putting together an overall EEC package, which would fall within the perimeter of WW’s proposal.

8. Our basic strategy here is to try to get approximately $100 million in agricultural offers from the Community and to almost reciprocate in terms of US offers. If pressed on chemicals, I believe that we could make a lesser cut on the lowest 7 percent of our tariff items rather than 8 percent as this would not make a substantial difference in the average cut.

9. This maneuver with WW last night has shifted the burden of accepting the Director General’s suggestions from the US to the Community. Undoubtedly, when we meet again at 5:00 P.M. this afternoon, Rey will attempt to chisel, although it would probably be difficult politically to turn the whole package down although this is of course a possibility. I would intend, in our EEC package, to be as forthcoming as possible. It will be in general balanced with the exception of certain disparities which we have said we would allow.

10. I remain very proud of the way the total team is functioning under exhausting and difficult circumstances, and can only hope for the best tonight.

Tubby

1. Source: Department of State, Central Files, FT 13–2 US. Secret; Flash; Limdis-Potatoes. Received on May 15 at 12:39 p.m. and passed to the White House.
2. Eric Wyndham White.
3. Document 355.