27. Circular Telegram From the Department of State to Certain Diplomatic Missions0

58. 1. Depcirtel 33.1 2. London’s 251.2 3. The Hague’s 79.3 4. Paris’ 197.4 Further re US position 10 percent tariff reduction FTA:

If interim tariff reductions considered essential, most desirable action clearly extension to all GATT countries on MFN basis. Impractical for US take position now re possible credit for cuts against future reciprocal negotiations with US. However, our understanding UK opposed to interim arrangement consisting simply generalized 10 percent reductions on grounds it would not signify advance in FTA negotiations.
If tariff cuts are limited OEEC countries, could only be supported by US as part of agreement on FTA which satisfies US and others that GATT standards are substantially met including requirement for plan and schedule for formation FTA “within reasonable length of time.” Otherwise, arrangement would involve serious risk creation new preferential area inconsistent with GATT and lacking benefits from building multilateral trading system around Common Market. We understand however unrealistic expect French agree in near future to arrangement satisfying above requirements (Ref 4).
In making approaches requested Ref. 1 US reps should make clear position re 10 percent reduction as outlined above. In that connection special emphasis should be placed on US view that Jan 1, 1959 deadline not vital for establishment FTA. (See para 6, Ref. 1.)
Agree Maudling report to OEEC Ministers along lines para 3 Ref. 25 could if carefully handled be useful in avoiding split and giving negotiations new impetus.
Appreciate reactions expressed reftels and hope foregoing helpful in clarifying basic questions raised.

  1. Source: Department of State, Central Files, 440.002/7–1658. Confidential. Drafted by Isaiah Frank (E/OT), cleared with seven other offices in the Department of State, and signed for Dulles by Dillon. Sent priority to Bonn, Brussels, The Hague, Luxembourg for USEC and the Embassy, Paris to pass to USRO, Rome, and London.
  2. Document 26.
  3. In telegram 251 from London, July 14, the Embassy requested further instructions before making the requested approach, particularly regarding the position to be taken on the 10 percent tariff reduction. (Department of State, Central Files, 440.002/7–1458)
  4. In telegram 79 from The Hague, July 15, the Embassy said that it agreed with the point made in telegram 251 from London that additional instructions were needed before the approach could be made. (ibid., 440.002/7–1558)
  5. In telegram 197 from Paris, July 15, Ambassador Houghton said he would discuss the general aspects of the U.S. viewpoint as given in circular telegram 33 in his next meeting with Couve de Murville, probably on another subject. But he cautioned that nothing the United States nor anybody else would say was likely to obtain French support for FTA. (ibid.)
  6. In this paragraph of telegram 251, the Embassy in London inquired whether the Department agreed with its interpretation of the U.S. position that the United States would not object to a report of failure to the OEEC ministerial meeting by CIG Chairman Maudling, if Maudling made it clear that his purpose was to state that the January 1, 1959, deadline no longer seemed possible and to obtain the cooperation of the ministers in facilitating further progress, including revised instructions and the adoption of a new timetable.