21. Telegram From the Department of State to the Embassy in the United Kingdom0

2347. London for the Ambassador. Busec for the Ambassador. From Ball. This week we must come to grips with both the kind and timing of the commercial policy program the Administration will put before the Congress. Several courses of action are being considered.

  • First, to seek improvements in the present Trade Agreements Act which would permit the United States to negotiate linear cuts with the EEC, but maintaining in diluted form the present peril point and escape clause provisos.
  • Second, to defer any action until 1963, allowing the Trade Agreements Act to lapse on the ground that the shape of the new trading world is not yet clear. In the interim new legislation would be designed which would take into account the results of the UK-Six negotiations.
  • Third, to present in 1962 an entirely new commercial policy program the major title of which would expressly and specifically authorize the President to negotiate with an enlarged European Community with the objective of reducing specified categories of industrial tariffs to zero in rhythm with the reductions in internal tariff of Community. The MFN principle would be retained. (We may well try to take temperate and tropical agriculture out of this context no matter the decision reached on the foregoing alternatives.)

This is the most sketchy reference to three of the principal alternatives, but sufficient for the question I wish to pose to you.

There is obviously no easy answer to what the Administration should do. The President’s decision must balance out a number of major considerations, one of which is the effect of the Administration’s action (or inaction) on the course of the U.K.-Six negotiation. This includes the interest of third countries in U.S. commercial policy, particularly EFTA and the Commonwealth. If we were to go ahead with alternative three the following are several of the pro and con considerations:

It would avoid the adverse psychological effect on Europe of a postponement or the presentation of a program which might well be construed as little more than the traditional Trade Agreements Act with revisions.
Presidential determination to seek a major new program designed to enable the United States to negotiate down the external barrier [Page 47] of the enlarged community could be of crucial help with the third country problem and thus minimize demands for special arrangements with the Common Market.
Determination on the part of the United States to adopt a new commercial program oriented towards the free movement of industrial goods could be used to orient the Common Market towards an outward looking policy at the critical stage in the Community’s development.
The potentiality for talk at cross purposes would be high; viz, the Administration would necessarily be preoccupied with defense of its legislative requests and would be tempted to employ arguments to this end without particular reference to their impact abroad. Contrariwise, the Europeans and the British would be in the most acute stage of negotiations with extreme positions advanced for bargaining purposes, but with the prospect that the positions would be seized upon in the United States as weapons to be used in our own Congressional battle. Considerable opportunity would exist for misunderstanding and political damage on both sides.
A disclosure of what authority the Administration intended to seek would deny the U.S. the advantage of keeping the Europeans in the dark. We would not be able to use the veiled threat to act against them if their negotiations seemed to be leading in the direction of a closed European market, surrounded by concentric preferential circles.

If the United States were not involved in a full fledged battle with the Congress in 1962, the Executive Branch could concentrate its full force on influencing the European negotiations.

I trust that this illustrative résumé of considerations is sufficient for you to give me your considered judgment on the crucial question, namely the effect of a U.S. commercial policy debate in 1962 on the basis of the third alternative on the successful outcome of the U.K.-Six negotiations. By “successful” outcome I mean of course U.K. adherence to the Common Market on a basis that assures the political and economic integrity of the enlarged community.

Schaetzel will telephone you for your preliminary reactions Tuesday October 31.1

  1. Source: Department of State, Central Files, 375.800/10–3061. Confidential; Priority; Limit Distribution; No Distribution Outside Department. Drafted by Schaetzel, cleared with Vine and S/S, and approved by Ball. Also sent to Brussels.
  2. No record of these telephone conversations has been found, but in Ecbus 291, October 31, Butterworth reiterated what he had said in his conversation, emphasizing his assumption that repercussions from any debate in Congress would not mean the success or failure of the UK-EEC negotiations. (Ibid., 375.800/10–3161) Ambassador Bruce, however, reported that, in his judgment, “debate would be very likely to affect the outcome adversely and could hardly be expected to affect it favorably.” (Telegram 1833 from London, November 3; ibid., 375.800/11–361)