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

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

Washington, May 11, 1966, 8:32 p.m.

GATT 3678. For Blumenthal. Ref: TAGG 4021.²

1. Proposed change in tactical position in cotton textile sector discussions involving quiet end to efforts to obtain comprehensive multilateral acceptance of working “hypothesis” that LTA will be extended in its present form is acceptable to us provided it remains entirely clear, as you indicate it will, that extension LTA in present form remains essential condition US ability to liberalize administration and reduce tariffs in package deal context.

2. However, following four important elements of our position must not be compromised:

A. That US, as reiterated above, has not abandoned insistence that extension LTA in its present form necessary if we are to agree to liberalization of administration and that present tariff offers take into account continued existence of LTA in present form.

B. That negotiations regarding liberalization of administration on part of United States will be carried on bilaterally.

C. That there not be any discussions in sector meetings of any changes in LTA, at least changes having applicability to US, as result this tactical change in our position. We assume that consequence this position is that multilateral sector discussions will now move to question of tariff reductions. (Obviously, tariff discussions would be without commitment, subject to completion negotiation WW package.) We would not be prepared to participate in any multilateral discussion on liberalization of administration which might affect the U.S., or in any discussions on changes in text of agreement.

D. That countries with which we have reached agreement on liberalization of administration and which have undertaken to support extension of LTA in its present form, including Japan, Republic of China and Hong Kong, will not find basis for arguing that US has indicated willingness to be less demanding of other countries than we have been of them.

3. Manner in which this tactical change in our position accomplished is one which you will necessarily have to determine in light discussions at next meeting WW calls.

4. We draw your attention to Deptel 2176 to Delhi and repeated Geneva 3673³ in which conversation with Indian Textile Commissioner Doraiswamy is reported. You will note that we emphasized that we had already reached agreement with the suppliers of a substantial portion of our textile imports regarding liberalization of administration and extension of the LTA in its present form. If tactical situation at WW meeting permits you may want to have prior understanding with representatives of these countries, suppliers of substantial portion of our imports, to avoid risk referred to in para D. above and to place appropriate emphasis in sector meeting on completion of these negotiations and fact that we are in communication regarding liberalization of administration with such additional countries as Korea, Spain, Jamaica, Israel, and Colombia. While we received no direct encouragement from Doraiswamy re Indian reaction to our position he did tell us he had reported it fully to Delhi. Since our effort and yours have been to persuade Indians (and Pakistanis) that they are injuring their own interests by holding out, we would not want to weaken effect of this position by overeagerness to accommodate them in Geneva or any place else. However, if some delay in accomplishing change in tactical position will not seriously affect time-table in Geneva this might provide useful time for Indians to reconsider their position on basis conversation reftel.

5. We would appreciate advance notice of time of sector meeting.

Rusk

1. Source: Department of State, Central Files, INCO–COTTON GATT. Confidential; Priority. Drafted by George R. Jacobs (E/OR/ICD); cleared by Harald B. Malmgren (STR), Stanley Nehmer (Commerce), Herbert N. Blackman (Labor), and Thomas W. Wolfe (Treasury); and approved by Henry Hopp (FTD).
2. TAGG 4021 from Geneva, April 26, proposed U.S. tactics for an upcoming meeting of the Kennedy Round cotton textile sector group that might help “to break deadlock caused by Indian and Pakistani refusal to agree to LTA extension as working hypothesis for ‘package deal’ negotiations.” (Ibid.)
3. Telegram 2176 to New Delhi (repeated as telegram 3673 to Geneva), May 9. (Ibid., INCO–COTTON 17 US–INDIA)