33. Memorandum of Conversation0
SUBJECT
- The Common Market
PARTICIPANTS
- Mr. Hallstein, President of The European Economic Community (EEC)
- Mr. von Staden, Chef du Cabinet EEC
- The Secretary
- The Under Secretary
- Ambassador Butterworth
- J. Robert Schaetzel
President Hallstein began by expressing his gratitude for the help which the United States had given the Community over the years and indicated that the integration process would not have reached its present maturity without this assistance. The Secretary affirmed the deep commitment of the United States to the European Community, and while it was not for us to say how the process should develop in all of its details nonetheless he could reiterate the broad political commitment.
The Secretary said that he had several questions he would like to put to President Hallstein, the first of which related to the timing of our [Page 75] trade legislation debate on the U.K.-Six negotiations. He noted that when we were considering our legislative program Washington had worried about whether this might introduce a new complication into European affairs.
President Hallstein replied that there had been no sign of any difficulties nor had their negotiations been in any way adversely affected. He noted that in fact the United States legislative strategy presupposes that the U.K. will join the Community.
Mr. Ball injected that the legislation had been carefully drafted in such a way as to do just this.
The Secretary indicated his surprise and pleasure at the exceedingly favorable United States reaction to the trade program; the most satisfactory progress in the hearings, the widely favorable editorial comment—all this against his somewhat more pessimistic anticipations and indeed his expectations that there would be more bloodletting.
President Hallstein added that as far as other countries were concerned, particularly the Swedes and the Swiss, he felt that the President’s Trade Expansion Program might very well contribute to the solution of their problems. On the other hand, Austria was on the outside and in a special status and in a confused domestic political environment, not clear just what to do.
Mr. Ball observed that the problem of the neutrals was one that would have to be left for a near final stage of the negotiations at which point a solution would be found.
The Secretary referred to the deep anxiety of the countries on other continents about the effect of the enlarged Community on their interests. While he was aware that no one can deal with any precision with these anxieties until the negotiations are finished, he suggested that it might be possible for the EEC to keep in close touch. The Secretary mentioned in this connection the worries of Brazil. President Hallstein said that unfortunately they had not been in too close communication with third countries although he said he would be seeing Mr. Mora in the course of his visit here in Washington. President Hallstein suggested that in his view the problem of third countries was more psychological than substantial. It was difficult because the Community wished third countries to be more specific but at the same time recognized that it was quite impossible for them to be so at this particular moment.
Ambassador Butterworth injected a personal observation that one of the problems was the fact that the Latin Americans, for instance, merely accredited their diplomatic representatives to Belgium to the Community. By and large these diplomats were not known for either their expertise or their ardor and much benefit would derive from improving [Page 76] the competence of these officials. President Hallstein said he had no reason to disagree with Ambassador Butterworth’s observation.
In responding to a question from Mr. Ball, President Hallstein said that some headway had been made on the extension of the European agreement and on the lowering of preferences, but not as much as he had hoped for. Earlier it had looked as though the French would be prepared to compromise but at the most recent Council of Ministers meeting their position had hardened. Nonetheless, he was convinced that by December 31 when the present European agreement expired a solution would be found, recalling the observation of Pisani at the time of the agricultural debate, “We are condemned to agreement.”
Secretary Rusk asked what effect the new association arrangements would have. President Hallstein surmised that it would probably not be possible to cut the level of preferences by 50% without compensation and yet it was difficult to determine what compensation was acceptable to all the parties. He also noted that the main point of the present system was the assured markets in France. President Hallstein speculated that it might be possible to find some inelegant but tolerable arrangement whereby the African states could be assured access to the French market.
Mr. Ball emphasized the impact of European arrangements on Latin American and other third countries and the sensitivities of these countries to the resulting arrangements. In this connection President Hallstein noted the psychological ramifications of the problem. The present generation of Africans is very pro-European, anxious to replace the old colonial ties with a relationship with the new Europe. Therefore a special association, which would have both political and economic advantages (which it might not be possible to develop with the next African generation), should be established in the near future.
The Secretary hoped that the Community would move in the direction of closer economic and political relations with Latin America over the next few years and stressed that the time had passed for special relationships between the United States and Latin America. President Hallstein indicated his understanding of this point and was in agreement with it.
In answer to an inquiry as to what President Hallstein would like to see the United States do at this moment of European affairs, President Hallstein asked for understanding; that while the new Europe might be moving too slowly on some points, nonetheless they are trying to do the best they can in the circumstances. President Hallstein agreed with Mr. Ball that United States pressure on the Community was most useful and that we should keep it up, not only with respect to the broad problem of tropical products but in other areas as well.
[Page 77]In this general connection the Secretary said he wished to deny categorically one canard that he heard from time to time, namely that the United States was interested in taking over the old colonial areas. He could not deny this too categorically and noted that our plate was already quite full enough.
Returning to an earlier topic the Secretary suggested to President Hallstein that the latter might very well speak to Mr. Mora about the desirability of raising the level of competence of Latin American ambassadors stationed in Brussels. Mr. Ball noted that a representative of the Organization of American States was apparently to be assigned to the OECD and it was suggested that this individual might also be assigned to Brussels. The Secretary suggested that thought might be given to assigning two or three among the Latin American wisemen to the Community.
The Secretary then inquired about the pace of the U.K. negotiations. President Hallstein felt the stage had been reached where each side must agree to be more specific about the concessions necessary for agreement, as the real negotiations are about to begin. He agreed with Mr. Ball that it looked as though the British objective would be agreement in principle with the Community by the end of July leading to a general debate in the Commons prior to the summer recess, but with a definitive debate at the end of the year following the Prime Ministers’ conference in September and the Conservative Party conference in October. The Secretary inquired as to whether the Conservative government was in touch with the Labor Party and seeking their support. Mr. Ball said there appeared to be a somewhat different strategy on the part of the British Government, namely that if the Conservatives hold firm Labor would not exploit the situation, but if there should be evidence of division among the Tories then there would be a great temptation to seize upon the U.K. move towards Europe as a major political issue. Ambassador Butterworth noted the Conservatives seemed to be taking considerable satisfaction in the disunity of the Labor Party on this question. President Hallstein expressed his view that the Conservative Party wanted to get the matter settled between now and the end of the year so that it would be forgotten when the elections in Britain were held, presumably in the spring of 1964.
Returning to the initiative in the political field, President Hallstein noted the constructive compromise formula which had emerged from the recent meeting of Fanfani and de Gaulle.1 Fanfani had stood firm on the critical issue as to whether the heads of government would have authority in the economic field and had been successful as well in establishing [Page 78] the point that nothing in the new political field would be done which would undercut the Treaties of Rome and Paris. President Hallstein said he still was uneasy about the suggestion that the heads of government could discuss economic matters which were within the competence of the European Community. It would be possible for the heads of government in conference to restrict the Council of Ministers which operated under special rules, voting and otherwise, as provided for in the Treaty. An erosive action of this nature could hinder the great progress which had been made in a body of ministers supporting the Community rather than merely representing the national states. In this connection President Hallstein said he felt there had been two issues which could create a real crisis in the integration process. The first was in the field of agriculture, and here Chancellor Adenauer had been indispensable. The second was still unsettled, and that was whether the proposed political community would undermine rather than contribute to the integrating process.
Mr. Ball inquired whether there had been any sign that the French intended to inject the nuclear issue into the negotiations when the chips were down. President Hallstein said he had nothing more than a suspicion and felt this matter might very well have been a part of the periodic U.K.-French bilateral discussions. He admitted that he had not been able to confirm this suspicion, however.
- Source: Department of State, Secretary’s Memoranda of Conversation: Lot 65 D 330. Confidential. Drafted by Schaetzel and approved in U on April 19 and in S on April 20. Memoranda of Hallstein’s conversations with Butterworth, Freeman, Hodges, and the Attorney General during his visit to Washington are ibid., Central Files, 375.800/4–962 through 4–1262.↩
- April 4.↩