252. Telegram From the Mission to the European Office of the United Nations to the Department of State1
Tagg 2357. For Herter from Blumenthal. Reference: A. Tagg 2354, B. Tagg 2355, C. Tagg 2356.2 Reference telegrams B and C indicate why negotiations on agricultural rules have broken down. Following commentary discusses significance our differences with Commission. I have discussed matter with Governor Herter, he agrees posts may give copies US and Commission papers (reference telegrams B and C) to governments using following comments as appropriate. Papers in reference telegrams have no official standing, but indicate retreat of Commission from more promising line it had been taking prior to October 9.
If opportunity arrives posts may point out that governments can check with Wyndham White if they want view of third party.
Begin comment:
During three lengthy bilateral discussions between September 17 and October 2, US and EEC Commission discussed possible outlines of agricultural rules which might be agreeable to both sides and acceptable generally by other negotiating partners in Geneva. At end third bilateral discussions (October 2), both sides presented oral summary of points of general consensus reached to Wyndham White. Both sides at that point were of impression that large area of consensus in fact had been reached, and EEC Commission indicated that only major point still to be worked out involved treatment of fruits and vegetables. It should be noted that all bilateral discussions were oral—nothing had been reduced to paper. US paper (reference telegram B) represents best effort by US to represent fairly US understanding of points of agreement reached except that fruits and vegetable problem was not taken into account, and paper assumes agreement by EEC to treat fresh fruits and vegetables like other fixed tariff items.
After interval of one week during which EEC Commission representatives had returned to Brussels to consult on status of their bilateral talks with US, fourth and final bilateral meeting took place in presence Wyndham White on Friday October 9. EEC document (reference telegram C) tabled in later part this bilateral discussion gave clear indication substantial departure from points of general concensus reached in previous sessions.
[Page 665]Parts I and III of EEC paper contain only substantive rules proposed in this paper for products other than bulk commodities. Read together with two footnotes to paragraph I, these provisions would mean that:
- 1.
- No offer would be required on a fixed tariff unless it is the only form of support maintained by any key country.
- 2.
- For products on which other measures of protection or support are maintained, either separately or in combination with a fixed tariff, no offer of any kind would be required. Rule simply states that these elements would be subject to negotiation.
- 3.
- Where a fixed tariff is not now bound, EEC language would clearly permit an offer along lines of MDS. Moreover, in subsequent discussion EEC strongly resisted suggestion by WW that introduction of variable levy on a bound item would require first that existing obligation be withdrawn through provisions of Article XXVIII.3 It seems fair to assume, therefore, that language of EEC paper was intended to permit offers having effect of withdrawing an existing fixed tariff binding and replacing it with reference price and variable levy. Only exception being those cases where no key country has any form of support other than a fixed tariff.
As indicated, EEC paper makes no provision for an offer on non-tariff elements. It also makes no provision that those few offers that would be required for fixed tariff items represent offers to reduce level of protection.
Paragraph II of EEC paper deals with bulk products for which commodity groups have been established to negotiate commodity arrangements as well as sugar for which EEC had asked a group be established. This paragraph departs substantially from substance of earlier conversations. Instead of stating that groups would negotiate on those elements that have been identified by group in question, paper in effect provides those groups with new terms of reference fully covering elements which EEC had wished included in negotiations (internal prices and international price, which are essential to MDS approach) which avoiding stating that access would be element of negotiation. Instead paper states concept that negotiation of other elements would determine conditions of access.
During discussion of this paragraph, EEC representative at first resisted strongly an effort to replace this language by a reference to elements which had already been identified by groups in question. They finally agreed to this solution provided the same elements would apply to negotiations in the case of sugar. This was clearly unacceptable since [Page 666] no discussion has yet taken place re formation of such a group or its terms of reference. In previous discussions it had merely been stated that EEC would propose that a sugar group be formed and that US would be willing to agree with a view to seeing what might be done in case of sugar.
Finally, EEC made completely new proposal that a similar group be established on oilseeds. This had never been discussed before. Effect of such a proposal, if accepted, would have been to transfer to commodity group important category of US exports to EEC and to provide Community with opportunity to withdraw zero tariff binding US now enjoys on soybeans.
Final paragraph of EEC paper “IV. Procedures” would leave to an undetermined future date determination of what products fall into what categories.
End comment.
- Source: Department of State, Central Files, FT 7 GATT. Limited Official Use; Priority. Repeated to Bonn, Brussels for USEC, The Hague, Luxembourg for USEC, Paris for USRO, Rome, and London. Passed to the White House for Herter on October 11.↩
- See Document 251 and footnote 2 thereto.↩
- Article XXVIII of the GATT permitted withdrawals or modifications of tariff concessions under specified circumstances.↩