Foreign Relations of the United States, 1955–1957, Western Europe and Canada, Volume XXVII

319. Memorandum of a Conversation Between the Deputy Under Secretary of State for Economic Affairs (Dillon) and Foreign Secretary Lloyd, Department of State, Washington, October 24, 1957, Morning¹

Washington, October 24, 1957, Morning

SUBJECT

• British Attitude Toward Common Market and Free Trade Area

Before the meeting with the President² began, Mr. Selwyn Lloyd took me aside and said he had been disturbed by a remark by the President to him the night before concerning the Common Market.³ Mr. Lloyd said that he had pointed out to the President the dangers of Western Europe being divided by the creation of a high tariff common market without the simultaneous entry into effect of the Free Trade Area. The President, according to Mr. Lloyd, had not been sympathetic and had indicated that he attached overriding importance to activation of the Common Market. Mr. Lloyd expressed concern that the United States was not fully aware of the great dangers inherent in the establishment of a high tariff common market, which would in effect split Western Europe in two unless it was accompanied by a Free Trade Area.

Mr. Dillon replied that the United States did, indeed, attach great importance to prompt entry into effect of the Common Market. He also explained that the United States favored the plan of a Free Trade Area and hoped that it would be possible to negotiate successfully the establishment of such an organization. Mr. Dillon also pointed out that the United States did not consider that the Common Market necessarily would have to be a high tariff organization, and said that the United States would exert its efforts to induce the Common Market countries to adopt as low a common tariff as possible. Mr. Dillon then asked Mr. Lloyd what the British position would be if the Common Market should enter into effect on a low tariff basis and it proved impossible to negotiate a Free Trade Area agreement simultaneously.

At this point Mr. Selwyn Lloyd called in Mr. Hayter and said to him, while the British position was to oppose the creation of a high tariff common market without simultaneous entry into force of a Free Trade Area, he was not aware of what the Foreign Office position was on the entry into force of a low tariff common market without a Free Trade Area. Mr. Hayter had no ready answer for this question, and conversation ended as the meeting with the President began.

1. Source: Department of State, Conference Files: Lot 62 D 181, CF 927. Confidential. Drafted by Dillon.
2. See infra.
3. The discussion on the Common Market was not recorded in the memorandum of conversation, Document 317.