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

268. Telegram From the Department of State to the Mission in Geneva¹

Washington, May 14, 1965, 4:46 p.m.

GATT 2802. Reference: Deptel GATT 2790.² Canadian Charge Kidd called at his request on Under Secretary Mann May 12 and presented note suggesting amendments to U. S. draft paper GATT Cereals Group given to Embassy May 10. (See reftel) Note states that “passages with respect to international prices fail to take account of the crucial importance attached by Canada and the other two exporting countries to the inclusion of price objectives consistent with the basic needs of their producers for improved returns.” Note adds that “Moreover, the passages concerning production and marketing adjustments do not appear to be flexible enough to permit the major participants, including the exporting countries, to play their part in securing the desired improved balance between supply and demand in ways appropriate to their various systems of production and marketing, and within their political possibilities.” Amendments suggested reflect these comments.

Note concluded with expression of hope U.S. could accept proposed changes and thus enable Canada and other exporters table proposals on opening date cereals negotiations. Otherwise Canada would request meeting four exporting countries at political level, point which Kidd emphasized in his presentation.

Australia and Argentina made similar oral and written presentation, emphasizing other exporters prepared to postpone if necessary opening date cereals negotiations and ask for meeting four exporters at political level to coordinate exporters’ position on issues raised in notes.

On Thursday, May 13, Ambassador Roth, STR replied to representatives of three governments. U.S. reply as follows:

1. The United States has sympathetically considered the changes proposed in the U.S. draft cereals paper, and has accordingly modified the paper as indicated.

2. These changes have been made in the expectation that the other cereals exporters would as a result find it possible to proceed to the Geneva meeting of the Cereals Group.

3. Because of the pressure of time and the possibility we may be required to present the cereals proposals in Geneva on May 17, we are not at this time responding to a number of comments contained in the exporters’ notes of transmittal. In due time we may reply, but these replies will not affect the draft we present in Geneva, nor, we assume, the response of the other exporters to our latest draft.

4. Noted United States had received draft of Australian and hoped Canadian and Argentine papers likewise would be available for comment before opening cereals negotiations Geneva. Reminded Australia that at the exporters’ meeting we expressed reservations about the proposal to denature excess production. Said we should like to see this deleted before paper presented in Geneva.

5. In accepting the changes proposed by the other exporters in Section 2, we interpret the present wording as committing exporters to limit production as appropriate.

FYI. Changes in U. S. paper in no way compromise basic U.S. position. Price range must be determined in light of provisions of cereals arrangement, particularly provisions relating to production and marketing restraints.

Changes in U.S. paper follow by separate cable.

Ball

1. Source: Department of State, Central Files, INCO–GRAINS GATT. Limited Official Use; Priority. Repeated to Bonn, Buenos Aires, Brussels for USEC, Canberra, The Hague, London, Ottawa, Paris, Rome, and Tokyo. Drafted by Sharon E. Erdkamp (EUR/BNA) and Irwin R. Hedges (STR) on May 14; cleared by Erdkamp, R. A. Ioanes (USDA/FAS), Joseph A. Greenwald (E/OT), and Fred H. Sanderson; and approved by William M. Roth.
2. Dated May 10. (Ibid.)