394.31/11–1654
The Secretary of Agriculture (Benson) to the Secretary of State
Dear Foster: We have received your letter of November 2,1 and the confidential note which was handed to you a few days ago by Ambassador Makins relative to the desire to impose some limitations on our use of Section 22 in the forthcoming GATT negotiations in Geneva.
I agree with you that this issue is a tough one. Our two Departments spent considerable time together on this question before the United States delegation left for the Geneva meetings. I understand that our Departments reached an agreement. We note that [Page 212] your Department is fully prepared to support the presently agreed position. We appreciate this, especially because we realize the very difficult situation in which it places your negotiators in their attempts to obtain concessions from foreign countries with respect to balance of payment quotas and the like.
I don’t see how we can change the position we are taking in Geneva. Section 22 is an Act of Congress. It would be quite presumptuous on the part of the Executive Branch of Government to attempt to negotiate away this feature of our legislation in an international session such as the one currently meeting in Geneva. The Department of Agriculture can determine administratively to use authorities under Section 22 more or less frequently, but legally the Department cannot negotiate away its right to make such administrative determination. To do so would obviously circumvent the directive from Congress, and would surely invite severe criticism of the Department in Congress.
The United States delegation is not without bargaining power in the Geneva sessions, even though not yielding on the Section 22 issue. We are moving in the direction of less dependence on Section 22 in the following way:
- 1.
- The flexible farm price support provision in the Agricultural Act of 1954 provides for gradually lowered levels of price support for farm products. This will reduce the necessity for such large CCC purchases of farm products, and will consequently reduce or even eliminate the need for imposition of import quotas under Section 22. Flexible farm price supports will also tend to narrow the wide disparity which has existed between domestic price levels and foreign price levels for selected farm products. This will further reduce the need for import quotas.
- 2.
- The Eisenhower Administration is definitely dedicated to a general restoration of foreign trade on a multilateral basis. The Department of Agriculture subscribes to this point of view. It is therefore the administrative philosophy in Agriculture to institute the authorities under Section 22 with considerable restraint.
- 3.
- We are working vigorously to reduce Government-owned stocks of food and fiber. We are making substantial progress. As these stocks are reduced the necessity to impose import restrictions is lessened.
It also should be pointed out by the U.S. delegation that domestic price supports in the United States, together with large CCC purchases of surplus farm products, have provided a “price umbrella” for producers in many other countries, under which their own markets flourished and production expanded. Many foreign producer groups have therefore gained indirectly from the U.S. price support operations, even though not participating directly in the artificially supported U.S. market.
[Page 213]We believe that if the United States delegation at Geneva can strongly advance the arguments listed above, their bargaining position will be far from hopeless.
Please be assured that the Department of Agriculture is anxious to cooperate in every way possible to reduce international barriers to a freer flow of goods and services.
A copy of this letter is going to other members of the Cabinet concerned with the negotiations at Geneva, as did copies of your letter to me.
Sincerely yours,