Foreign Relations of the United States, 1964–1968, Volume IX, International Development and Economic Defense Policy; Commodities

254. Telegram From the Department of State to the Embassy in the United Kingdom¹

Washington, February 24, 1965, 7:02 p.m.

5320. Ref: Embtel 4009.² The following letter from Governor Herter to Minister of Agriculture Peart was delivered by Ambassador Roth to Minister of Economic Affairs John Chadwick of the British Embassy. You may wish to follow up with representation at appropriate Government levels with the U.K. Government in London.

My dear Mr. Minister:

As you know, the United States attaches great importance to the Exchange of Letters of April 15, 1964 between the United States Government and the Government of the United Kingdom regarding United Kingdom production and trade policies relating to cereals.³ We believe, as you do, that the agreement establishes an important precedent for cooperation among cereal exporting and importing countries in that it links the objective of promoting greater stability in the United Kingdom cereals market with that of maintaining a fair and reasonable balance between home production and imports. We attach special importance to those provisions of the agreement by which the United Kingdom has undertaken to enter into regular consultations with its major grain suppliers and to take effective corrective action at the earliest practicable time if total imports of cereals show or threaten to show an appreciable decline below the average volume of such imports during the three years preceding July 1, 1964.

The United States shares your Government’s hope that the agreement will facilitate progress in the far-reaching negotiations which the major grain exporting and importing countries are about to begin in the GATT Cereals Group. However, these expectations will be fulfilled only if it can be shown that the arrangements which we have made are working satisfactorily. We therefore view most seriously the evidence that the balance between home production and imports in the United Kingdom is not being maintained and that United Kingdom imports of cereals this year are even likely to fall substantially short of the minimum level of 9 million tons provided for in the Exchange of Letters.

We are also concerned about the difficulties in implementing the provisions for timely and meaningful consultations contained in paragraphs 4, 6, 10, and 11 of the Exchange of Letters. You will recall that in the meeting held in London last December your representatives agreed that these discussions marked only a beginning of the consultations and that the United Kingdom Government would notify the principal exporting countries of its preliminary thinking concerning further steps to be taken by the United Kingdom authorities as early as possible during the Annual Review so as to give the exporting countries an adequate opportunity to comment. We are disappointed therefore that the United Kingdom Government’s Note No. 46 of February 17, 1965⁴ does not contain information concerning your preliminary thinking on standard quantities and guaranteed prices for the coming crop year.

We are gratified, on the other hand, to find confirmation in the Note that your Government intends to ensure that the objectives of the agreement are fulfilled and that it is prepared to take all practical steps to this end. We for our part are anxious to continue our consultations and in particular to review the steps which your Government is planning to take to correct the decline of imports during the current and future years. To this end we request that a meeting be held between representatives of our governments in sufficient time prior to the conclusion of the Annual Review to enable our views to be taken into consideration. End text.

FYI: We have suggested to Chadwick that the meeting should be held at least two weeks prior to conclusion of Annual Review.

Embassies of Argentine, Australia, and Canada have been informed.

Rusk

1. Source: Department of State, Central Files, INCO–GRAINS 4 UK-US. Limited Official Use. Drafted by Fred H. Sanderson (E/OR/FD) and L. Schertz (USDA/FAS), cleared by Carl W. Schmidt (E/OT/GCP) and I.R. Hedges (STR), and approved by Stanley Nehmer (E/OR). Repeated to Brussels for BUSEC, Buenos Aires, Canberra, Ottawa, and Geneva for GATT.
2. Dated February 18. (Ibid.)
3. See Document 215.
4. See footnote 2, Document 252.