Foreign Relations of the United States, 1961–1963, Volume IX, Foreign Economic Policy

281. Telegram From the Department of State to the Mission to the European Communities⁰

Washington, May 17, 1963, 7:37 p.m.

Busec 504. Brussels also for Embassy, Paris also for USRO. Pelt¹ of Dutch Embassy just returned from The Hague made following points in discussion of trade negotiations with Department officers. He stressed he was describing situation as he saw it from point of view of one who was essentially in sympathy U.S. objectives in trade negotiations. He also implied his views reflected those of Van Oorschot² and other “liberals” in Dutch administration.

1. “Ecretement” proposal has attracted considerable support from business and general public as well officials. Support is result primarily of belief equal linear cut biased in favor of U.S. and that negotiations on this basis would leave U.S. with more bargaining power for future because it would still have some relatively high tariffs.

2. Compromise EEC position for GATT Ministerial was best obtainable at this time. Essential for U.S. to present convincing case for linear cut and to be sufficiently flexible to take account of high tariff problem if agreement is to be achieved on equal linear cut. If we make good enough case, Germans and Dutch would be able to harden their positions in support of ours. At moment, U.S. has lost initiative and must find means to regain it.

3. One important key to U.S. regaining initiative is for U.S. to be as specific as possible as soon as possible on our intentions re exceptions. We explained inability commit ourselves on specific exceptions prior to completion internal procedures. Pelt said he understood this but said would be big help if U.S. could make official proposal setting percentage ceiling on exceptions.

4. Most Dutch officials convinced French do not want any negotiations and are using “ecretement” proposal to bloc them. If this tactic fails, French will attempt create other obstacles.

5. French have taken position Commission’s authority to act for EEC under Article 111³ is limited to tariffs and Commission not author-ized to deal with non-tariff barriers. Van Blankenstein,⁴ who accompanied Pelt, stated French are taking position that para-tariff and non-tariff barriers are not matters which fall within common commercial policy and therefore remain subject to unanimity during full transitional period and presumably afterwards. Pointed out this would provide French with permanent veto in non-tariff field and could prevent agreement necessary to final settlement in negotiations. Van Blankenstein also said, however, Dutch hopeful of defeating French on this point.

6. U.S. should not expect EEC to take any initiative in field of agriculture. U.S., therefore, would have to put forward specific proposals on agriculture.

7. Both Mansholt and Linthorst-Homan⁵ convinced failure of negotiations would precipitate internal crisis resulting in breakup of EEC.

Rusk

0. Source: Department of State, Central Files, FT 4 US/TEA. Confidential. Drafted by Barbara C. Fagan (EUR/RPE); cleared by Bernard Norwood (STR), Leonard Weiss, and Robert M. Beaudry (EUR/WE) in substance; and approved by Stanley M. Cleveland (EUR/RPE). Also sent to the EEC capitals and Geneva.
1. Adrian S. Pelt, Secretary General of the World Federation of U.N. Associations.
2. Not further identified.
3. For text of Article 111 of the Treaty Establishing the European Economic Community, see American Foreign Policy: Current Documents, 1957, pp. 467-468.
4. Not further identified.
5. J. Linthorst-Homan was the Ambassador of the Netherlands Mission to the EEC in 1958.