Foreign Relations of the United States, 1964–1968, Volume VIII, International Monetary and Trade Policy

238. Memorandum From Francis M. Bator of the National Security Council Staff to the President’s Special Assistant for National Security Affairs (Bundy)¹

Washington, June 8, 1964.

McG. B.

Kennedy Round and the Erhard Visit²

In the face of the dramatic German veto on grains prices last Tuesday,³ if the President is noncommittal or reserved in his conversation with Erhard on the grains price/access issue—or, more broadly, on the importance of the Kennedy Round in Atlantic relations—the Germans are likely to conclude, if only for their own peace of mind, that the U.S. is content to let the negotiations stall. If so, there will be little or no chance that they will yield to Commission pressure and agree to a price before September—and, a fortiori, barring a minor miracle, before their elections. And without progress toward a “common agricultural policy”—the only item in the Kennedy Round package which is not distasteful to them—the French will certainly stonewall, especially since they will be able to blame the Germans. (Needless to say, even if the French were prepared to stick to the schedule on industrial questions, leaving agriculture out of it pro tem, we would not. Agriculture’s notion that we can make progress on agricultural rules and access while the CAP is in limbo, while not technically impossible, is a mirage.)

To be sure, even a strong expression of Presidential concern may fail to budge the Germans, and the French may sabotage the negotiations in any case. All one can reasonably claim is that a Presidential intervention appears at this stage to be a necessary condition for progress—as indeed for a test of French intentions and good faith. (This last is not unimportant. In terms of our future options, it would be much better for the French to have played the villain rather than the Germans abetted by the U.S.)

The point of the above is not that we abandon agriculture. The President, after restating the case for the Kennedy Round in terms of Atlantic political relations, could point out that we want both a reasonably low common price and some access arrangement—that neither, taken by itself, will do.

It is important to keep in mind that last Tuesday evening’s decision is widely regarded in Europe as having placed the entire negotiation in jeopardy. If we make no response and appear to acquiesce in drift, we shall be judged as party to the strangulation and will be in a poor position to take strong action to revive the negotiations after November.

Francis M. Bator ⁴

1. Source: Johnson Library, Bator Papers, Kennedy Round, 1964–1965 I, Box 12. No classification marking.
2. Chancellor Erhard met with President Johnson and other U.S. officials in Washington on June 12 and 13.
3. June 2.
4. Printed from a copy that bears this typed signature.