210. Memorandum of Conversation0



  • International Economic Problems: Commercial Policy and Aid Matters


  • United States
    • The President
    • The Secretary of State
    • The Secretary of the Treasury
    • Ambassador Bruce
    • Mr. Walter W. Heller
    • Mr. McGeorge Bundy
    • Mr. George W. Ball
    • Mr. Foy D. Kohler
    • Mr. Charles E. Bohlen
    • Mr. William C. Burdett
    • Mr. James W. Swihart
  • United Kingdom
    • The Prime Minister
    • Lord Home
    • Ambassador Caccia
    • Sir Norman Brook
    • Sir Frederick Hoyer Millar
    • Sir Robert Hall
    • Honorable Peter Ramsbotham
    • Mr. John Russell
    • Mr. D. B. Pitblado
    • Mr. Philip de Zulueta
    • Mr. A. C. I. Samuel
    • Mr. John Thomson

Mr. Ball referred to the Commonwealth arrangements regarding tropical food stuffs which caused us trouble because of Latin America. He hoped that we could approach this matter together.

The President explained that we were going to have an extremely difficult battle on reciprocal trade legislation. Last time the bill passed the House by only one vote. Now there were depressed conditions. The textile industry had moved to the South which had traditionally supported free trade. 35-40 Congressmen were coming to see him next week. Reciprocal trade would be the most important battle of the next two years. Some of the arguments used by the opponents were soundly based. We must organize those who benefit from free trade. Those who are hurt are already organized. It would help us a great deal on this question if the UK could do something about deciduous fruit. This matter was of particular concern to six Senators from the Northwest who supported us on reciprocal trade. Mr. Ball said that he would be glad to furnish the UK with a memorandum on the subject.

[Page 460]

The President next referred to the difficulties occasioned by the growth in imports of textiles from Hong Kong. These imports had gone up 400% and are now equivalent to those from Japan. Something must be done or there could be a disastrous effect on the reciprocal trade legislation. Pakistan was also somewhat involved. The President said he would like us jointly to see if something could be done voluntarily.

Commenting on the problem of fruits the Prime Minister said the British interest was to avoid ruining the Federation of the West Indies and having it taken over by a Castro-type regime. Mr. Ball observed that it would help if something could be done about peaches and pears which he did not think involved the Federation. The Prime Minister replied that he thought this could be straightened out. He added the matter of textiles was terribly difficult. Great Britain had voluntary quotas from Hong Kong and Pakistan but these were about to run out. If the West gives aid to new countries to set up industries, they are bound to manufacture. What do we do with these products? For example, Lancaster had shifted from the manufacture of textiles to high-grade machinery. The British Government had spent much money to change the type of manufacture. The problem arises when a new source comes so quickly into the market. This upsets things politically and then one cannot get things done. He would like to have the Hong Kong matter studied. The Prime Minister asked whether it would be possible to obtain a voluntary quota. Lord Home said it had taken the British three years. Mr. Ball reported that when in London last week he had spoken with Mr. Gorrell Barnes of the Colonial Office and they had reached an understanding that the British would send over a mission next week to look at the total economic problem of Hong Kong not only the commercial policy aspects. The broader problem the Prime Minister had mentioned, Mr. Ball said, was pre-occupying us very much. He hoped it might be handled through the DAG. There should be coordination and planning regarding the type of development we would support and also regarding the burden of absorbing imports.

[Here follows discussion of aid to undeveloped countries.]

  1. Source: Department of State, Presidential Memoranda of Conversation: Lot 66 D 149, January-April, 1961. Secret. Drafted by William C. Burdett (EUR/BNA). The meeting was held at the White House. The typed notation “uncleared” appears on the source text.