478. Memorandum of Conversation, November 29, Ball and John Chadwick, British Embassy1

Part II of II
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SUBJECT

  • Kennedy Round

PARTICIPANTS

  • Mr. John E. Chadwick, British Embassy
  • The Under Secretary
  • Mr. Robert Anderson, U
  • Mr. Deane R. Hinton, EUR/RPE

Mr. Chadwick said that in London’s view the Kennedy Round was highly political and “all of a piece” of what went on in NATO. We were getting nowhere on disparities in Geneva and the French were stalling the EEC. The French were resisting any cut in tariffs below 5 percent. With respect to agriculture, while the French wanted to settle the outstanding CAP regulations they did not accept the German position that the CAP should be negotiable in GATT and they resisted the concept of comparable access. While the French argued that they needed to maintain negotiable levels of protection, the UK saw this as a political position. Agriculture posed difficulties for the UK. It was particularly concerned that the CAP should not make eventual UK entry into the Community more difficult. Moreover, as agriculture becomes an issue in the Kennedy Round, the UK would like to push in the right direction. The question was how. The UK was very conscious of the delicacy of these matters and the danger that if the wrong thing were said it would be counterproductive. He noted that the French appear to be prepared not to settle the cereal question now although Mansholt wanted to go ahead. In general, however, he believed the Mansholt plans were acceptable to the Six, although not to the U.S. and the UK.

Mr. Ball said there were two Mansholt plans, one regarding cereals and one regarding rules for agricultural negotiations. The second, as it now stood, was most unacceptable to the U.S.

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With respect to the cereals proposal, Mr. Ball thought Chancellor Erhard would like to take bold incisive action. Erhard would like to [Typeset Page 1886]establish his authority by dealing with this troublesome problem well before the elections. He has said there would be need for assurances regarding the level of imports from third countries and had mentioned 10 million tons, although this figure did not seem to have been seriously thought through. The German price levels would have to be reduced sooner or later.

The French, Mr. Ball said, saw virtue in settling the common price but were concerned over the inflationary impact. Both Couve and Giscard appeared not to be in a hurry. The French still showed signs of interest in a comprehensive but ambiguous global arrangement. But they disliked access assurances. He thought there was some honest confusion in their thinking. They also appeared to be having second thoughts on disparities. They wanted to retain bargaining power and a reasonable CXT to delineate the EEC. This Gaullist logic was old in some respects. In any case, they were trying to limit tariff cuts in the Kennedy Round.

Mr. Ball commented that for the moment the U.S. was taking a long look at the situation and listening more than talking. We need a strategic plan for the negotiations. It looked like the French and Germans would be ready early in 1964 to proceed to serious negotiations.

Regarding agriculture, Mr. Ball said third country suppliers were important. Their interest must be recognized by full consultation before decisions are taken within the EEC. Moreover the CAP decisions should be negotiable including cereal price levels.

Mr. Ball thought perhaps we should ask the Community, “What do you want to accomplish in these negotiations?” We might be able to resolve some issues if we understood better what the Community objectives were. The U.S. wanted to use its negotiating powers to the full.

Mr. Chadwick said there was pessimistic talk in Geneva about ending up with a 30–35 per cent cut instead of 50 percent. Mr. Ball reiterated that we wished to use our authority to the full and would be unhappy with a 30 percent cut. We should stay with the 50 per cent formula and limit disparities to as few items as possible.

At this point Mr. Ball was called to the White House. The discussion continued briefly, but no further significant points of substance were developed, although Mr. Chadwick again warned of the dangers of exerting “pressure” on EEC member countries. Apparently he feared we might overplay our hand with the Germans. Finally, Mr. Chadwick said he had not yet received an analysis from London on the Mansholt proposals but hoped to have something in hand soon. Mr. Anderson hoped we could have a further exchange of views when an analysis had been received. Mr. Chadwick thought this desirable and useful and said he would telephone as soon as he heard from London.

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  1. Kennedy Round.” Confidential. 3 pp. Department of State, Secretary’s Memoranda of Conversation: Lot 65 D 330.