281. Letter From the Special Representative for Trade Negotiations’ Executive Assistant (Auchincloss) to the Special Representative for Trade Negotiations (Herter)1
Dear Governor:
I hope Lyford Key has turned out well. My mother is very worried about this venture of hers into the art of cruise directing.
Mike Blumenthal was here for the past 10 days—he arrived just in time to be plunged into the hassle over the grains proposal that we will submit on April 26. One of the factors that has made interagency agreement difficult here is that our domestic farm program was sent up to the Hill only last Monday (copy enclosed)2 and its provisions will of course affect the extent of the offers we can make on our internal policy. One millstone that we will have to carry internationally is that under the new legislation the “domestic certificate” price for wheat would be raised about 50 cents, bringing the overall return to the farmer to $2.50 a bushel. As it is taking shape our offer in CG will probably be to pledge not to raise our loan price ($1.25 a bushel) beyond some commonly agreed world reference price—perhaps $1.50. We would also offer to continue our acreage diversion plan to limit production. In return we would ask the EEC to bind the difference between the world reference price and its own internal support price and to undertake a program to limit its own cereals productions to that of a certain base period. There would also be provisions for storage of any excess production and for food aid disposals. If the EEC should not be willing to undertake a program to limit production we would then demand some form of access commitment, such as we obtained from the British. Similar requests would be made of the other importing countries. We are meeting with the other exporters tomorrow and the next day in order to compare notes and try to avoid clashes between ourselves when the CG negotiations begin.
On the industrial side Mike reports that our initial bilateral meetings with the EEC on exceptions have gone very well. The EEC representatives have been knowledgeable and the discussion has been frank. Mike thinks that we are moving naturally into the stage where each side makes clear its primary interests, thus laying the groundwork for actual bargaining. [Page 721] The bargaining will probably not take place however until after the agriculture offers are laid down when everyone will have a full picture.
Rey was here, accompanied by Hijzen, for a short visit last week.3 He seemed in an uncommonly blunt frame of mind. Surely, he said, United States does not expect real liberalization of EEC agricultural trade—what we really hope, he thought, was that EEC policies should not become more restrictive. We disillusioned him saying that we still held firmly to the Ministerial Resolution.4 We felt that we had made some genuine concessions to the EEC point of view on agriculture. Rey admitted that the EEC was not going to get agreement on the montant de soutien and would have to modify its position. However, he believed, this would be possible only if other participants also changed their stand somewhat. He seemed anxious to have bilateral meetings between the EEC and the U.S. in the near future where we would talk frankly about what we really wanted and what was possible to get. We found ourselves in the unaccustomed position of urging Rey to be patient: we thought that a fairly clear picture of our respective interests would emerge fairly promptly from the May to September discussions on agriculture policies.
We are happy to report that the President has signed the Executive Order formally making this office a voting member of the interagency committees on textiles.5
Our review of the Tariff Commission’s report on the watches escape clause case has begun. The industry is building most of its case for retention of the high duties upon a National Security argument. Consequently the President has asked OEP to undertake an investigation of the national security aspect of the watch industry and to report within 6 months.
Sincerely,
- Source: Kennedy Library, Herter Papers, Kenneth Auchincloss, Box 5. No classification marking.↩
- Not enclosed, but the letter from the President transmitting to Congress the legislative proposals for farm commodity programs, Monday, April 5, is printed in Public Papers of the Presidents of the United States: Lyndon B. Johnson, 1965, Book I, pp. 383–386. The legislative proposals are in H. Doc. 137, 89th Cong.↩
- See Document 280.↩
- Regarding the GATT Ministerial resolutions, see footnote 3, Document 254.↩
- Executive Order 11214, April 7, is printed in 30 Federal Register 4527.↩
- Printed from a copy that bears this typed signature.↩