421. Cedto 507 from Paris, November 281
Brussels for USEC. Geneva for GATT. From Leddy. OECD Ministerial Meeting: Highlights of discussion November 27 on “trade and aid”, trade work of organization and agricultural trade follow:
1. Trade and aid. US trade-aid initiative welcomed as ministers adopted “trade and aid” resolution referred to them by heads of dels (CES/62.95). (US had previously withdrawn its revised draft resolution this subject at Nov. 24 heads of delegation pursuant to Toced 314.)
Kristensen referring to Trade Committee exercise under which OECD members have been asked to describe their trade policies vis-à-vis LDCs and ideas re possible role of organization this field, stated bluntly that responses from members not very encouraging, with “several members showing hesitant attitude.” Warned of growing gap between LDC’s import needs and foreign exchange earnings, difficulties being met by traditional LDC exports, need for price stabilization in basic commodities (though reorganizing this raised difficult problems production control), and need to increase LDC exports of manufactures. Noted that comprehensive Secretariat study under way on entire range of relationships between [Facsimile Page 2] OECD members and outside world and hoped to say more about this next year.
Under Secretary Ball stressed intimate connection between trade and aid policies, reviewed difficulties facing LDCs in trade field and possible lines remedial action, noting that challenges this field provided opportunity for OECD to give effect to concept that it should operate as economic conscience of free world. (Text under Secretary Ball’s remarks on this and other trade aspects being cabled separately). Erroll (UK President Board of Trade) agreed both sides of problem required coordinated attention. Felt UK had already made notable efforts to help solve LDC trade problems by providing liberal markets for both primary and LDC manufactured goods, and by considerable UK efforts in readaptation structure UK textile industry. Problem was not only barriers to trade but possibilities of adaptation of economic structure both in industrialized countries and LDCs. Agreed there were limits beyond which OECD could not carry burden of problem without causing resentment elsewhere, stating OECD (a) cannot discuss individual tariffs (b) should not discuss detailed operation of commodity agree[Typeset Page 1698]ments (c) cannot do more than discuss in general terms diversification in countries not OECD members.
Brasseur (Belgium) warned that OECD members must avoid impression they concerned only with own problems. Zijlstra (Netherlands) viewed OECD task as helping implement ideas contained in GATT Nov. 1961 Ministerial declaration. Lamalfa (Italy) viewed OECD role as one of making studies and exchanging views on ideas which could be given effect in other international forums concerned with LDC problems. Lange (Sweden) felt trade-aid resolution in line with recognition long given “in this house” to need assist LDCs in trade field. De Murville (France) specifically welcomed US initiative but noted serious substantive differences between OECD members on approach to LDC problems. Recalled French view of need to guarantee continuing “take” of primary commodities through organization of markets. Maintained that, though EEC-African relations frequently criticized, these have already raised living standards in associated African countries. [Facsimile Page 3] Felt solution of problems would be facilitated if others refrained “from insisting on negative aspects” and if all LDCs could be given “similar guarantees.” Called on others to raise their efforts to French level. While recognizing need for increased exports of LDC manufactures, argued this must be gradual with LDCs imposing self discipline to avoid market disturbances and countries should avoid creating uneconomic industry for prestige reasons. Muller-Armack (Germany) regarded OECD as forum in which necessary political decisions could be taken to move together toward solutions of LDC problems. Wyndham-White (GATT Executive Secretary) stated that duplication of effort often good in good cause but draw attention to manpower problem resulting from proliferation of effort. Felt increasing problem of suitable representation at intergovernmental meetings might undermine effectiveness total result. Congratulated OECD desire to contribute to success of enterprise already initiated by GATT in this field.
2. Trade work of organization. Kristensen noted that, until negotiations looking to expanded Common Market completed, difficult to predict future trade patterns and role of organization in trade field. Likewise difficult see at this stage what OECD role might be in negotiations under Trade Expansion Act (TEA), noting necessity of direct contacts among interested countries and fact formal negotiations would be in GATT. Noted Trade Committee (TC) emphasis on successful negotiations on broadest possible basis. Felt OECD had contribution to make re adaptation of member countries’ economic structures, especially shifting manpower out of agriculture, as essential part of effort for economic growth and increasing trade.
Under Secretary Ball called on organization to develop habits of consultation on policy matters, noting that US prepared consult on any [Typeset Page 1699] aspect its economic policy and such consultation more useful when policy in formative stage. Re trade matters US prepared consult on procedures designed influence member countries’ policy and practices on continuing basis. US also prepared examine possibilities of harmonizing with trade policies other measures affecting trade. OECD should also be forum for consultations on problems which LDCs would raise at UN Trade Conference.
[Facsimile Page 4]Belgium called for continued study of administrative and technical trade obstacles and work on removal of QRS. Felt Trade Committee might develop discipline to ensure that tariff reductions not offset by other restrictive practices and welcomed US readiness discuss these. Netherlands felt TC could play role as “Platform of Industrialized Countries” to facilitate successful outcome negotiations under TEA. Stressed importance continued OECD drives against QRS.
Sweden welcomed growing importance of TC and development its work program. In addition to work on LDC problems, felt TC should help prepare “for activity in GATT to liberalize trade among industrialized countries via TEA.” France felt OECD has useful role in trade field in context its concerns with economic policy matters generally.
3. Agricultural trade. While recognizing necessity for EEC Common Agricultural Policy (CAP), Under Secretary Ball noted policy could be liberal or restrictive. Recalling Secretary Freeman’s recent statement to Agriculture Ministers meeting, he underlined US concerns with evidences of restrictionist trend in development of CAP. Noted importance of CAP grain price level in determining future levels agricultural trade.
Recognized need for global approach in some cases and stated US willingness participate serious discussion possibilities global grain arrangement. Also stated US willingness join in considering its own policies affecting agricultural trade as part of general effort towards more liberalized trade in temperate agricultural products. De Murville noted CAP too young to have judgment passed on it. Agreed central question was level at which internal EEC prices would be fixed. However, felt it unreal to talk about “traditional trade patterns” in rapidly changing world. Welcomed US readiness to discuss its own restrictions on agricultural trade and stated EEC always ready participate discussions this general problem.
- OECD Ministerial: Trade and Aid. Official Use Only. 4 pp. Department of State, Central Files, 374.800/11–2862.↩