27. Circular Telegram From the Department of State to Certain Missions 0

1247. Ball-Heath talks provided most useful exchange of views on our trade legislation and direction our foreign economic policy and on progress of UK-EEC negotiations.

On Commonwealth issues, discussion was confined to questions of principle. We indicated that medium term essentially transitional solutions were matter for UK to examine with Six, and that longer term arrangements had to be compatible with a sensible global structure and that medium and long term should dovetail. Agreed that we must busy ourselves to create long-term framework consonant our mutual objectives. We made strong point that our trade legislation would contribute to solution many problems of Commonwealth.

Major portion of discussion focused on EFTA neutrals. Ball restressed position spelled out in Schaetzel-Lee talks (see CW 4872)1 that other feasible alternatives should be examined. He noted that we had serious reservations on association as a principle, although clearly recognized trading problems of neutrals with which we sympathetic. We stated that neutrals appeared to be essentially preoccupied with trading problem and that it should be resolved as such. We stated further that we were strongly of belief that our trade legislation would create a situation in which the reasonable trade requirements of the neutrals could be worked out.

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UK position was that it had made a pledge, a political commitment to other EFTA partners and was not prepared to place this commitment in doubt. They asked whether US would still take this position if UK later on had to make choice whether enter EEC or not on basis of EFTA association. Under Secretary replied that he hoped it would not come to that.

Under Secretary noted that our position, as has consistently been the case, is that we are prepared examine any proposed arrangements, including association. If association were to be alternative proposed we would test against GATT.

When British asked if we would make this position clear to the Six, we said that we have taken this position both with Six and with neutrals themselves.

Detailed Memcon is being sent by pouch.2

Comment: Talks were on the whole useful. Dept did not anticipate that UK could do more than elaborate position it has taken on which it must stand until negotiations are further along. We wished make certain that our viewpoint clearly understood, and believe this objective attained.

  1. Source: Department of State, Central Files, 375.800/1–1262. Confidential. Drafted by Vine and cleared in draft with Ball and Schaetzel. Sent to Ottawa, Canberra, Wellington, and 14 missions in Europe.
  2. Not found.
  3. Memoranda of the conversations with Heath on January 6 are in Department of State, Secretary’s Memoranda of Conversation: Lot 65 D 330.