257. Telegram From the Department of State to the Embassy in the United Kingdom1
5549. Ref: Embtel 4219.2 Embassy is requested deliver following Aide-Memoire to MinAg Peart.
Begin verbatim text: With reference to the letter from the U.K. Minister of Agriculture to Governor Herter delivered on March 33 in reply to Governor Herter’s letter regarding the arrangements for consultations as set forth in the Exchange of Letters between the Governments of the UK and US on trade in cereals, the US appreciates the renewed assurance of the intention of the UK Government to meet the obligations it accepted in the agreement so as to fulfill the objectives set forth in that agreement.
At the same time the US regrets that the letter from the Minister of Agriculture does not indicate the ability of the UK to implement the provisions for consultations in a manner which the US considers would make them timely and meaningful. In the US view the provisions for consultations meant that the UK’s preliminary thinking on standard quantities and guaranteed prices would be made available to the US as was done in the early part of 1964 prior to the conclusion of that year’s Annual Review. The letter from the Minister of Agriculture (1) confirms that the UK undertook, in the consultations with the principal exporting countries which began in December 1964, to inform those countries of the UK’s preliminary thinking and (2) states that this was done with respect to standard quantities and consumption in the note delivered to the US Government on February 17. The US wishes to point out that although the note of February 17 included an estimate of consumption, it did not include preliminary thinking on the level of the standard quantities or on guaranteed prices.
The US appreciates that the UK will not be able to give definitive indications of the action to be taken in regard to the adjustment of the standard quantities or the level of guaranteed prices until the Annual Review has been completed. What the US has been requesting is an expression of the UK’s preliminary thinking with respect to 1965/66 standard quantities and guaranteed prices for cereals.
[Page 669]In asking for a meeting prior to the conclusion of the UK’s Annual Review, the US sought an opportunity to discuss with the UK the probable effect of the planned changes on UK cereal production, and in turn on cereal imports. If the UK is not prepared to give the US preliminary information on these planned changes, the US sees no benefit to be derived from another meeting.
As the UK is aware, the US is most concerned that imports from the third-countries are falling substantially short of the objectives set forth in the Exchange of Letters. While the US recognizes that it is up to the UK to decide on the means of implementing its objectives on imports, in the US view it would appear the minimum corrective action needed would be a reduction in both the guaranteed prices and the standard quantities to the fullest extent permitted by the UK legislation. Even with the maximum adjustments in the guaranteed prices and standard quantities permitted by the UK law, there would appear to be considerable doubt that the changes will be sufficient to correct the decline in imports and additional measures might have to be considered.
If the Government of the UK should find itself able to inform the US of its preliminary views on changes in the standard quantities and guaranteed prices, the US would still welcome the opportunity for represent-atives of our two Governments to consult within the next week on this subject. End text.
- Source: Department of State, Central Files, INCO–GRAINS 4 UK-US. Limited Official Use; Priority. Drafted by G. A. Friedman (E/OR/FD) and L. Schertz (USDA/FAS) on March 5; cleared by I. R. Hedges (STR), Fred H. Sanderson (OR/FD), A. R. De Felice (USDA), Frank M. Tucker (EUR/BNA), and Carl W. Schmidt (OT/GCP); and approved by Stanley Nehmer (OR). Repeated to Ottawa, Buenos Aires, Canberra, Brussels for BUSEC, and Geneva for GATT.↩
- See footnote 1, Document 256.↩
- Document 256.↩