58. Telegram 3929 From the Mission to the European Communities to the Department of State1
Subject: US/EC Consultations, June 6–7: Overview.
1. Summary. US/EC consultations covered a wide range of mutual economic issues. A positive and constructive spirit prevailed through most of meeting in the wake of recent settlement of Article XXIV:6 negotiations, but a somber tone was injected by discussion of potential serious trade problems in wine and dairy sectors. End Summary.
2. June 6–7 US/EC consultations in Brussels (reported in detail in septels) opened on a strong positive note resulting from last week’s successful conclusion of Article XXIV:6 negotiations, eliminating the threat of trade retaliation that had cast a shadow over US-European commercial relations in recent months. Both the US delegation led by Ambassador Eberle and Assistant Secretary of State Hartman and the EC delegation headed by Commissioner Soames, expressed deep satisfaction that long and arduous efforts had succeeded. In a series of plenary and committee discussions on trade, investment, energy, EC-Arab cooperation, raw materials and other LDC issues, participants took constructive attitudes in trying to anticipate problems and seek jointly managed solutions. Soames closed the meeting with a strong statement of appreciation for Secretary Kissinger’s tireless and successful efforts in the Middle East. Principal accomplishments of consultations were:
A. Agreement to explore the possibility of a renegotiation of the chicken war;
B. A decision to consult before fall on general development policies involving the related issues of financial aid, UNGA, food aid, trade and investment with LDCs and technological transfers;
C. Agreement to examine before summer related food aid, grains, beef and MTN issues;
D. Concurrence on scheduling before the fall an examination of specific sectors of industrial policy;
E. A decision to try to concert tactics prior to GATT trade negotiating committee sessions.
3. On the Euro-Arab dialogue, the Commission drew a clear distinction between its role as advisor to the Nine governments in connec [Page 239] tion with the initiatives being undertaken in the framework of political cooperation and those matters the Commission is carrying on for the European Economic Community as such—Mediterranean policy, and the individual agreements it has or is negotiating with the states in question. The Commission promised to consult with us on aspects of the Euro-Arab dialogue which fall within the Community’s competence, which will likely include most substantive aspects of EC-Arab economic and technical cooperation.
4. In the trade field, we heard a strong plea from the Commission side emphasizing:
A. Its view that MTN is more important in the current context than when it was first conceived and
B. That early enactment of the trade bill is essential. In the agricultural field, we made clear to Commissioner Lardinois and his associates our concern about the current situation on the world beef market and the pressures on the US resulting in part from restrictive action by the Community.
5. A major point of discord arose when the US warned the Commission that serious problems lie in our wine and dairy trade. Community failure to respond to upcoming US regulations on wine bottle sizes may jeopardize European wine shipments to the US. The Community also faces a serious risk of countervailing duties against EC restitutions on dairy exports. Soames appeared shocked at this news and said that US restrictions on EC wine or dairy exports, following the strenuous Article XXIV:6 negotiations, would be seriously damaging to US/EC relations. He asked that we inform the highest US political levels of the dangers involved.
6. The general assessment of consultations on both sides, despite the serious tone of discussions on wine and dairy products, was that a more open and constructive approach had prevailed than in previous consultations. The interspersion of plenary and specialized committee sessions enable more detailed discussions on highly complex subjects such as energy and raw materials policy. The expressed need for a broader approach toward major areas of policy such as development and trade/technology/investment issues also distinguished this consultation from the narrow issue focus of some earlier sessions. Perhaps most important, the mutual desire to engage in full US/EC consultations on a wide range of economic policies before taking decisions or entering broader international fora appears to represent a significant shift in Atlantic political-economic attitudes.
- Summary: The Mission provided an overview of
U.S.–EC economic
consultations.
Source: National Archives, RG 59, Central Foreign Policy Files, 1974. Limited Official Use. Sent for information to Bonn, Brussels, Copenhagen, Dublin, London, Luxembourg, Paris, Rome, The Hague, the Mission in Geneva, and the Mission to the OECD. On May 31, Nixon announced the successful conclusion of the U.S.–EC Article XXIV: 6 negotiations; for the text of his remarks, see Public Papers: Nixon, 1974, p. 464.
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