90. Circular Telegram From the Department of State to Certain Missions in Europe 0

1163. Brussels also for USEC, Paris also for USRO.

Interim Political Assessment of EEC Year-End Decisions

EEC Council of Ministers year-end decisions on Kennedy Round and CAP, although clearly imperfect package not fully responsive either to European or third-county interests, represent on balance a positive European effort to regain momentum and move forward along path hitherto almost completely blocked in 1963.
As we see results with many details still lacking, Germans and French both made important concessions in showdown precipitated by French. Germans have acknowledged in principle, at least, need for progress in CAP while accepting less liberal Kennedy Round position than they had favored. French have apparently agreed to delayed implementation CAP and to more liberal Kennedy Round stance. Despite [Page 249] fundamental conflicts, others came into line after pledging significant sacrifices national economic interests.
Next results appear boil down to following:
European integration movement, which we support as vital element Atlantic relationship and natural fulfillment European desires, has weathered serious storm. Differences among EEC members will doubtless recur but will probably be of degree rather than basic intent.
EEC Commission has asserted itself as key element in Community. As originator essentially “European” compromises, Commission came out of-year-end session with new respect and probably enhanced role in future.
Several key features of package, notably disparities formula and agricultural tariff negotiating plan, will create serious problems for us in 1964.
Commitment to 50 percent linear cut as “working hypothesis”, although less clear than we would have wished, is nevertheless definite plus factor in package.
Respect for third-country concerns, which Chancellor Erhard reiterated in Texas talks, not readily evident from what is known of CAP decisions and Kennedy Round plan. Such respect, which we hope is in fact built into package, is key element from U.S. viewpoint and will need constant strong reiteration.

For present, Department and STR playing package in low key with decisions directly affecting U.S.—and these are majority of decisions—requiring far more study and additional details. In contacts with appropriate officials addressees may draw on pertinent sections this message if U.S. views requested. Should emphasize, however, that full information lacking and that these are only preliminary reactions.

  1. Source: Department of State, Central Files, ECIN 3 EEC. Confidential Drafted by Kaplan (RPE); cleared by STR, E, and EUR; and approved by Tyler. Sent to Bonn, Rome, Brussels, London, Luxembourg, Paris, The Hague, and Geneva.