Foreign Relations of the United States, 1958–1960, Western European Integration and Security, Canada, Volume VII, Part 1

43. Telegram From the Mission at the North Atlantic Treaty Organization and European Regional Organizations to the Department of State⁰

Paris, December 16, 1958, 2 p.m.

Polto Circular 25. Reference: Polto 1695.¹ Subject: OEEC Ministerial meeting December 15—afternoon and night session.

1. Following are highlights of very tense meeting marked by head-on British-French conflict which was finally compromised temporarily only after pleas other OEEC members to avoid disastrous breach in Europe.

2. Erhard described interim proposal of six contained C(58)263, December 8.² Only new element was statement most of six prepared consider reduce tariffs on liberalized agricultural products.

3. Couve de Murville outlined measures France prepared to take as 40 percent reliberalization, increase quotas in formerly liberalized zone (40 to 82 percent) by 20 percent, and fulfillment interim proposal of six. Pointed out only difference in French treatment of six and eleven lay in establishment for six of quotas at 3 percent of national production where existing quotas lower than this level. Expressed regret that France could not do more at present.

4. Many of eleven expressed dissatisfaction regarding proposal of six primarily on grounds it does not entirely eliminate discrimination. Eccles implied UK willing accept tariff discrimination; however, UK found proposal of six on quotas unacceptable. It would result in serious discrimination against eleven—particularly on part of France. Others of eleven also expressed opposition to unilateral character of offer, fact would involve tangle of bilateral negotiations, and provided little for agriculture.

5. UK, in major step, proposed that six globalize to all OEEC countries quota increases called for on January 1 by Rome Treaty. UK would do same with possibility some minor exceptions and even consider similar action regarding agricultural products if six also moved in this field.

6. After recess to allow time for six to consider British proposal, six proposed draft resolution (CES/8.157): (1) Recommending adoption interim proposal of six, (2) Calling attention to needs of FPCS [LDCs] and agricultural countries, and (3) Asking UK submit in writing its “proposals concerning extension trade in field small or non-existing quotas.”³

7. Eccles said eleven agreed that interim proposals of six were unacceptable and CES/8.157 added nothing new. Reasonable that six need time study UK offer, but period from now until January 1 sufficient. Said that country (obviously France) which has not liberalized 90 percent not entitled by code to discriminate. If such member of six were to institute discriminatory trading arrangements, UK would feel it necessary make corresponding adjustments in commercial policy toward that country to protect British trade.

8. Couve de Murville said unexpected statement from UK changed situation. France could not consider negotiating under threat. Therefore, France withdraws support from resolution proposed by six and from French draft proposal on permanent solution reported paragraph four reference telegram in such context, could not approve text otherwise acceptable. Erhard said situation must be described as tragic. Called attention to stakes involved. Both sides must avoid rash action. Said while Germany willing to accept UK proposal, it needed objective consideration by six.

9. After recess to allow private talks, Heathcoat Amory (in chair) said he impressed by amount of good will to find solution and shortage of time before January 1. Therefore proposed adjournment until January 15 promising UK would take no action in meantime. UK (repeating previous Erhard suggestion) proposed resolution instructing Steering Board for Trade study UK proposal in meantime.

10. To astonishment of meeting, Couve de Murville said situation unchanged. Impossible France accept this resolution or any other in this context. Erhard emotionally stated he could not agree with Couve de Murville that situation had not changed. He interpreted new British position to be devoid of threat. To refuse even consider British proposal would be catastrophic. Erhard then said he would be grateful if US representative would indicate US views this situation. Many pleaded with French not to take firm decision that would rupture Europe.

11. Couve de Murville’s adamant position not supported by any one. Others of six and most of eleven asked France to reconsider and accept British proposal. Couve de Murville acknowledged France isolated, which arose from fact that France only country against which retaliation threatened, but did not alter position.

12. Rey (EEC Commission) proposed simple adjournment until January 15 with no resolution or instructions re interim consideration. Eccles made conciliatory statement to effect that UK not only would take no action prior January 15, but would make no decision now on action in event satisfactory solution not found at January 15 meeting. Couve de Murville said France could approve only procedural resolution on date next meeting.

13. Ministerial Council compromised on adjournment with decision in minutes that ministers wish permanent delegates make appropriate arrangements for interim study of UK proposal in preparation January 15 meeting.

14. Procedures for subsequent consideration permanent solution (left hanging in morning session) never returned to. Also no explicit decision whether any or all of interim proposals of C(58)263 would be implemented.

15. US representative (McCarthy) judged it best not intervene considering it wise give Europeans adequate opportunity solve problem themselves and desiring reserve US intervention in case needed prevent total breakdown negotiations.⁴

Burgess

0. Source: Department of State, Central Files, 840.00/12–1658. Confidential; Priority. Transmitted in two sections. Repeated to Brussels for USEC.
1. Document 42.
2. Not found in Department of State files.
3. This draft resolution was further analyzed in Polto A–417 from Paris, December 22. (Department of State, Central Files, 840.00/12–2258)
4. A more detailed report on the discussion at the morning and evening sessions of December 15 was sent to the Department of State in Polto A–412, December 20. (ibid., 840.00/12–2058) A meeting of the heads of delegation was held in Paris on December 19 to make arrangements for the Ministerial Council meeting on January 15, 1959. A brief report on the heads of delegation meeting was contained in Polto Circular 26 from Paris, December 19. (ibid., 840.00/12–1959)