29. Telegram From the Embassy in the United Kingdom to the Department of State0

402. Luxembourg for USEC. Paris pass USRO. In view absence Lloyd and preoccupation Prime Minister other matters, Department circular telegram 331 and Department circular telegram 582 conveyed Maudling today. He said will convey Chancellor. Following summary his comments:

Agreed next two weeks crucial for FTA and appreciated continuing US support.
UK will continue press for FTA and urge continuation negotiations. Confirmed that report to OEEC Ministers re failure carry out mandate would be in context request for new instructions and time table. At ministerial meeting, UK will also seek reaffirmation support all OEEC countries for FTA. (Maudling said Pinay expressed disbelief French had really agreed when shown October 1957 OEEC resolution3 and referred to FTA as just UK device to stop common market.) Rumors breakdown FTA negotiations and loss UK interest have according Maudling, had salutary effect in stirring up Six.
UK opposed to interim 10 percent tariff cut on generalized basis because (A) no reciprocity seems possible; and (B) would not be move toward FTA. (This in considerable part matter of principle—would represent common action on external tariffs while fundamental to FTA concept that only internal to be affected.) Stated Benelux and Germany also opposed generalization. Would support 10 percent cut limited OEEC countries but only as first step toward FTA on which real progress had been made of sort would justify US supporting GATT waiver. May suggest at CIG or ministerial meeting that negotiations on provisional arrangement re 10 percent proceed along with work on substance FTA. UK would insist any provisional arrangement apply to quotas as well as tariffs.

With respect target for FTA agreement, while not concerned about gap of few months between common market action on internal barriers [Page 54] January 1, 1959 and similar FTA, provided progress being made toward FTA, feels longer delay would set trading patterns and prejudice future of FTA.

  1. Source: Department of State, Central Files, 440.002/7–1858. Confidential. Repeated to Brussels, The Hague, Bonn, Rome, Luxembourg, and Paris.
  2. Document 26.
  3. In circular telegram 58, July 16, the Department of State transmitted further instructions regarding the U.S. position on FTA. (Department of State, Central Files, 440.002/7–1858)
  4. Presumably a reference to the OEEC Council resolution of October 17, 1957; see footnote 1, Document 8.