Foreign Relations of the United States, 1961–1963, Volumes VII, VIII, IX, Arms Control; National Security Policy; Foreign Economic Policy, Microfiche Supplement

465. Paper Prepared in White House for President Kennedy, March 7¹

March 7, 1963

SUBJECT

• Your Meeting with Senator Pastore on Wool Textiles

You are seeing Senator Pastore tomorrow at 10:00 A.M. As I think Mike Feldman has already reported to you, the group of some thirty industry people and three union leaders who met with Governor Herter went in expecting no satisfaction and got none. Herter talked to them about what had been done, and about problems of compensation and retaliation that a negotiation would raise. Mr. Blumenthal told them why past attempts at negotiation had failed. As agreed, Governor Herter did not promise them that he would try to do something for wool textiles as part of the general trade negotiations. The consensus of Governor Herter and Secretary Ball (see attached papers) on what you can safely say to Senator Pastore is:

1. The present situation in Europe is radically different from that in which your promise to him was made. The European countries, and especially the UK, are feeling edgy about their own trade problems, and any renewed attempt to negotiate an agreement will be even less likely to be successful now than previously. Although we have already made a substantial effort through Blumenthal and Wyndham White, their record of lack of success is clear. Accordingly, if we try to negotiate a wool textiles agreement now, it is our best judgment that it would fail. Further, the effort itself is likely to destroy the cotton textile agreement, because the Japanese are already complaining about our administration of it, and to poison the atmosphere in Europe for a general trade negotiation. The surplus in our trade with Europe is almost $2 billion; this is a handy measure of the economic importance to us of expanding our trade through the success of the Kennedy round negotiation.

2. We can bring up the wool matter again in the course of the general negotiations next year. We cannot be certain that even then we will be successful, but the probability of success at that time is greater, because the problems of compensation can be dealt with in terms of the general deal that we make with the Europeans rather than separately. Further, since we will be making a general deal, the problem of retaliation will be avoided. If we do not avoid retaliation, we may find that the imposition of quotas on wool would lead to harm to industries in a much more sensitive and difficult position than the woolen manufacturers. The larger woolen manufacturers are prosperous, and the smaller ones who are not, are being affected by causes other than imports.

1. Background information for meeting with Senator Pastore on wool textiles. 2 pp. No classification marking. Kennedy Library, National Security Files, Kaysen Series, Trade Policy, Trade Expansion Act, 10/62–3/15/63, Box 378.