249. Memorandum of Conversation0
SEGNI VISIT
SUBJECT
- Community of Six and Outer Seven
[Here follows the same list of participants as Document 248.]
Mr. Dillon asked if the Italians wished to discuss the question of relations between the Community of Six and the Outer Seven in Europe. Mr. Pella said that he wished to stress again that the Italian Government intended to make every possible effort in order to join the Community of Six to other European countries, particularly the Outer Seven. He said that the relationship with the UK was particularly important. He said no solution to this problem had been found yet but that the directives of the Italian Government were constantly to seek an agreement. He said the Six must not be an inward-looking organization and must permit the possibility of others joining unless such broadening meant essentially weakening the institutions of the Six.
Mr. Dillon said that the Italian view appeared close to that of the U.S. He said that we did not mean to weaken the Six. At the same time we do not want an economic split in Europe. He said we had one concern and that was that if, in composing their differences, the Community of Six and the Outer Seven lost sight of the interests of other countries this would have a harmful effect. He said the Community of Six and the Outer Seven should bear in mind the world-wide effects of such actions as they might take. He said he had not only in mind the question of discrimination against the U.S. and Canada, but particularly the problems of Latin America and the underdeveloped countries. He said the Latin Americans were particularly concerned in this matter. Therefore, he hoped that the Six would proceed in a liberal fashion.
Mr. Pella said that this would be the Italian line with which he thought the other Five members agreed. He said Italy had always been extremely liberal in her trade policy and that Italian reconstruction had been possible because of the liberal trade policy which she had followed. He said he did not wish to forget the role which U.S. aid had also played in Italy’s reconstruction. He said when the tariff reductions in [Page 555] the Community of Six occurred he wished to reduce tariffs for others as well. He referred to Italian dollar liberalization, and said that the Prime Minister had called a meeting with the interested Ministers to study this matter. With regard to Latin America, he said he also had their concerns in mind and noted that Italy has supported all efforts to increase trade between the Community of Six and Latin America. He stressed that Italy had consistently opposed protectionism and that he agreed with Mr. Dillon’s exposé of the situation.
Pella said that there were three possible positions to take on this problem. The first was the rather theoretical one that there could be a closed market of the Six. The second was that the Six should be broadened by an association with the Outer Seven. He said that the third was to broaden the association on a world-wide basis—that is to lead to, in effect, a world-wide common market. He thought to adopt the third position now would be too precipitate and that Italy therefore supported the second possibility of an association between the Community of Six and the Outer Seven, and believed that by stages we should seek to arrive at the third position.
Mr. Dillon said he hoped Italy, in following her policy, would keep in mind the effect on countries outside of those who were participants. He said he welcomed the Italian statement regarding dollar liberalization. He said the most important economic objective of the United States, in which the President was personally concerned, was at the present time the elimination of dollar discrimination. He said that we believed in free trade and now that the European economies were strong and had large gold dollar reserves there should not be any quotas or discrimination for balance of payments reasons. He said that we were asking for the removal of all dollar discrimination as quickly as possible and believed that a number of countries were moving rapidly in this direction. He said otherwise there might be a reaction in the United States which would hurt our liberal trade policy. We were glad to keep our markets open even though for balance of payments reasons the European countries had not been able to keep their markets fully open to us in the past. However, now we need more U.S. exports. He noted that the U.K., Germany and France were planning now largely to remove their restrictions and he hoped that Italy would keep the U.S. problem in mind.
Mr. Pella concluded on this subject that Italy had been the leader in the removal of dollar discrimination. This concluded the discussion of economic matters.
- Source: Department of State, Conference Files: Lot 64 D 560, CF 1490. Secret. Drafted by McBride and approved in S on October 14. See also Documents 248 and 250–251.↩