Office of the Historian

326. Telegram From the Mission to the European Office of the United Nations to the Department of State1

Geneva, December 5, 1966, 1736Z.

1777. GATT—For Governor Herter from Blumenthal. BUSEC-CEDTO. Subject: Assembly of Kennedy Round offers—U.S. and EEC. Ref: Geneva 1758.2

1.
We met Dec. 1 with EEC del., chaired by Hijzen and including Rabot, Schlosser Braun and Malve, to explain U.S. assessment and transmit bilateral list priority requests for improved offers. Member states observers present also.
2.
We noted assessment showed overall imbalance present offers in favor other countries and imbalance with EEC. On industrial side, we pointed out that by any standard of comparison, EEC offers fall short of U.S. offers and that EEC exceptions bear heavily on sectors of greatest U.S. interest. Re agriculture, situation even more critical and room for improved EEC offers even greater.
3.
In describing requests and possible modifications, U.S. noted that trade coverage of modifications much smaller than trade coverage of requests to allow EEC flexibility in improving offers and because of unknowns in crucial sectors. Emphasized that moment not yet come make withdrawals and that no offer being pulled back: lists indicated improvements needed, and modifications U.S. might have to have if improvements not forthcoming
4.
Noting that our assessment omitted consideration of disparities, we restated position that in absence of agreed rule we would examine any disparity claims on case-by-case basis to see if disparity element significant in trade terms. Noting also that in introduction to list of U.S. exceptions of Community export interest received Nov. 30, EEC claimed right to “free exceptions” on CXT items corresponding to disparities excepted by other countries, we said we do not accept argument, and would take any such “free exception” claims into account in assessing balance.
5.
Hijzen made following comments on points raised in our assessments:
A.
Re conditional offers, said requirement of reciprocity in automotive sector attached to EEC offers satisfied by offers of U.S. and UK but others would have to match.
B.
Re disparities, admitted no agreed rule; said EEC going on basis of 2:1/10 formula;3 regretted slow pace concordance work has prevented EEC submission of definite list of disparity items but hoped submit list soon; reaffirmed EEC thesis that Community entitled free exceptions on products in disparity which excepted by others.
C.
Re statistical basis of assessment, deprecated use of figures and said solution of problems presented by trade negotiation of this importance depends on appreciation qualitative rather than quantitative elements.
D.
Re balance, said preliminary EEC assessment shows U.S. and EEC close to bilateral balance and stated that in EEC view withdrawals by U.S. would be indefensible. (Note that he did not say EEC offers equal to or better than U.S.).
6.
Copies our talking paper on bilateral assessment being pouched addressee posts.4
Tubby
  1. Source: Department of State, Central Files, FT 7 GATT. Confidential. Repeated to Bonn, Brussels, The Hague, Luxembourg, Paris, and Rome and passed to the White House.↩
  2. Telegram 1758 from Geneva, December 2 (misdated November 2). (Ibid.)↩
  3. See footnote 2, Document 235.↩
  4. Not found.↩