Foreign Relations of the United States, 1969–1976, Volume XXXI, Foreign Economic Policy, 1973–1976

42. Memorandum of Conversation¹

Reykjavik, June 1, 1973, noon–12:45 p.m.

PARTICIPANTS

• President Pompidou
• Foreign Minister Michel Jobert
• Finance Minister Giscard d’Estaing
• President Nixon
• Secretary of State William P. Rogers
• Secretary of Treasury George Shultz
• Dr. Henry A. Kissinger, Assistant to the President for National Security Affairs

President Nixon: President Pompidou and I feel that it would be useful to have a brief report from the Foreign Ministers and the Finance Ministers on their sessions.² The President and I have discussed some of these same problems but it would be useful to have some account of these meetings.

[Omitted here is Jobert’s and Rogers’s briefing on foreign policy.]

President Nixon: Shall we listen to the Finance Ministers?

President Pompidou: If Secretary Shultz will agree to a date for convertibility then Giscard will agree to raise the price of gold.

Secretary Shultz: I will be brief. First the points of convergence. There was a consensus that convertibility is a rough and ready means of bringing discipline especially to deficit countries and that it is desirable to make discipline symmetrical, bringing it to surplus countries also where convertibility would not apply. The U.S. method to attain this through objective indicators is not accepted, but we agree on the objectives.

The second point of divergence is that roles must apply evenly to all countries. This implies a reduced role for reserve currency; there were different views on the elasticity of those holding the currencies. Reference was made to consolidating surplus balances. I believe there is also general agreement on creating SDRs or some such instrument as a worldwide currency to act as “numeraire” for the whole world. It is felt that the interim arrangements are reasonably satisfactory. Of course, the question is what is a transitional period? It is good to have a chance to observe them while talking about going towards a more fixed system.

On many questions there was no convergence. These included sharing exchange risks—the interchange or relationship with SDRs. But if a broad outline can be settled, then we can solve the technical problems.

On other points, such as the emphasis placed upon the flexibility of exchange rates, we narrowed our differences by focusing on the exchange rate relationships between the European Community, the U.S. and Japan as differentiated from all other associated countries. We talked about the scheduling for the new system. Our consensus is that it will not be before Nairobi,³ and that it will be a good idea to have the Ministers meet before that. We advocate a “no communiqué” approach because on the basis of my own experience much time that could otherwise be devoted to substance is usually devoted to drafting a communiqué. We can accomplish more without a communiqué.

We also talked about the commercial area, both European Community enlargement and compensations for it. We did not come to an agreement but we talked about it. We also talked about forthcoming multilateral negotiations and I should like to point out two characteristic features of such talks. First I quickly come to prickly matters of detail; then after, the clear overriding gains from trade. It remains to translate these, the latter, into a political will to settle the details on the prickly issue. I am pleased that Giscard d’Estaing will attend the opening of the Tokyo meeting.⁴ If he brings the same skill and expertise there that he brings to commercial matters, it bodes well. Finally, this was one in a series of similar or larger meetings with Giscard d’Estaing. I always find him an interesting, stimulating and most pleasant person to be associated with.

Finance Minister d’Estaing: I have almost nothing to add because of the precision and high quality of Secretary Shultz’ statement. Since President Pompidou said last night that he was going to switch Finance Ministers, I would like to say that Secretary Shultz spoke for both of us.

Let me give a few political indications. We agreed that we must work towards a world monetary order in sub-term measures. Convertibility is accepted by our U.S. partners in that new system. The SDR’s must be a value that is sought after. Gold was mentioned, but in a system based mainly upon the laws of the markets it is unlikely that gold would remain at a level too far divorced from reality.

As to timing, we have no interest in pushing things. We see the end of 1973 or early 1974 as the soonest moment. On trade, we agree with our partners on reciprocity of concessions and that the CAP will not be questioned again. We note the desires of the U.S. to study all non-tariff barriers. This is all I have to add to the very exact report of my friend and colleague, Mr. Shultz.

President Nixon: One significant thought occurs to me after these brief but important reports. It is that they tell us something about our two countries that we should always keep in mind. We both are not parochial. We look to the world. Consider the range of questions studied by the President and me, the Foreign Ministers and the Finance Ministers. We have surveyed the world geographically and economically.

The President and I talked about Southeast Asia, Japan and its links to Europe, the Middle East and Europe, East-West relations, SALT, MBFR, as well as the world monetary and trade system.⁵ You see the wide range of interest in subjects that go far beyond our own two countries. Although at times we may disagree on techniques, there is no disagreement about our interests which are very close.

I should like to conclude on a personal note and an observation directed at the U.S. side.

I look forward to returning to Paris in the fall when we can continue our dialogue. I want to be sure all in the U.S. Government understand my position on Franco-U.S. relations. I do not speak for those who are in this room here with me, because they share my view. The President said that French and frank are the same. I want to speak very frankly too. U.S. policies vis-à-vis France before 1969 were wrong and disastrous. There was a tendency to blame General de Gaulle’s⁶ stubbornness for the breakdown in Franco-U.S. relations, but those responsible for these policies in the U.S. must take a large share of that responsibility. When I first came to Paris in 1969 and had a long talk with de Gaulle,⁷ I started then to work towards an objective and I have made progress towards it in the last four years and will make more progress in the next four years. My aim is to return to a strong, friendly basis for our relations such as we enjoyed in the past. I don’t mean total agreement but I do mean trust and cooperation. I want to be sure that all U.S. Government officials reflect that spirit in their dealings with their French counterparts, because the legacy of the early 1960s has left a residue at the lower level. Needless to say, that residue is in the press because every time we have a meeting with our French friends, the press say there will be a confrontation and every time we disappoint the press. I do not suggest total agreement, which could never be the case between two free countries.

It is customary to say after meetings such as this that a new era has begun. In my mind it began the day I was first inaugurated and it will continue now because my goal in foreign policy for the eight years which I hope to be in office is to leave French and U.S. policy on the basis which we enjoyed until that difficult period in the 1960’s that pulled us apart. A close personal relationship the President and I enjoy will help achieve that.

President Pompidou: May I add a few words to what is for us a very moving statement, Mr. President. The expectations with which we came to these meetings have been fulfilled. First we did not try to decide anything. We exchanged details on a number of bilateral matters. I did not speak for Europe although I did not forget Europe. What Dr. Kissinger would call the regional European reality. I speak not on behalf of others, nor for the people of France—correction, I speak for France.

In the second place, thanks to the type of relations you mentioned and to the policies you pursued we were able to take up the more serious issues and explore their substance as never before in the past. We have explored them very deeply and have looked into the future.

May I say to Secretary Shultz that indeed we do not need a communiqué. We share our inner thoughts, we did not agree on all the methods, but we do agree on our general interests and that France and the U.S. are guided not only by a sentimental tradition but by a community of deep interests. I am convinced that this conference has not given birth to anything, but it bears a seed for the future, and conception is more fun than delivering.

I want to thank you Mr. President for the friendship and the frankness you have displayed and which I have tried to reciprocate. These meetings have been useful for our two countries and for the world, for the relations between the European Community and the U.S. and to promote the cause of détente and peace where we are so active and violent. I look forward to receiving you in Paris with all the honors and tributes that are yours by right.

[The meeting ended at 12:45 p.m.]⁸

1. Source: National Archives, Nixon Presidential Materials, White House Special Files, Staff Member & Office Files, President’s Office Files, Box 91, President’s Meeting File, Memoranda for the President’s File, Beginning May 27 (1973). Top Secret; Sensitive. The meeting took place at the Kjarvalsstadir, the Reykjavik Art Museum.
2. The memorandum of conversation of Shultz’s and Giscard’s meeting is printed as Document 40.
3. The IMF and World Bank Boards of Governors met in Nairobi September 24–28.
4. A GATT Ministerial meeting was held in Tokyo September 12–14.
5. Documentation on the May 31 discussions among Pompidou, Nixon, and Kissinger is scheduled for publication in Foreign Relations, 1969–1976, volume E–15, part 2, Documents on Western Europe, 1973–1976; see also Document 41. A memorandum of conversation recording a meeting of Pompidou, Nixon, and Kissinger on June 1 from 10:15 a.m. until 11:45 a.m. is in the Library of Congress, Manuscript Division, Kissinger Papers, Box TS 26, Geopolitical File, France, Meetings, 1973, May–June (Reykjavik, Iceland).
6. Charles de Gaulle was President of France from 1958 to 1969.
7. President Nixon visited Paris from February 28 to March 2, 1969. See Foreign Relations, 1969–1976, volume III, Foreign Economic Policy, 1969–1972; International Monetary Policy, 1969–1972, Document 7.
8. Brackets are in the original.