Foreign Relations of the United States, 1964–1968, Volume IX, International Development and Economic Defense Policy; Commodities

207. Memorandum of Conversation¹

Washington, March 19, 1964.

SUBJECT

• Wool Textiles

PARTICIPANTS

• See attached list²

Mr. Darman³ summarized for the Under Secretary the background which led up to the meeting in Paris on March 11–12 of representatives of wool textile industries from 14 countries of Europe, the United States, and Canada. He referred to the meeting of the International Wool Study Group in December 1962 which provided an opportunity for the wool textile industry members of the United States delegation to make contacts and to have conversations with their counterparts in the United Kingdom. This led to several industry meetings with the British in the months that followed. The British industry was concerned as to what could be done to recover the market in the United States which they had lost to the Japanese. There was a mutual understanding by the United States and United Kingdom industries that it would be desirable to take action internationally to control trade in wool textiles. Mr. Darman pointed out that the wool textile industries of the EEC had quite independently come to the same conclusion, and, as a result, in December 1963 a meeting was held in Rome of representatives of the wool textile industries of the EEC, United Kingdom, some other EFTA countries, and the United States. Except for the United States delegation, the representatives of the other industries were manufacturers of tops, yarn, and cloth. Knitters and apparel manufacturers were not represented since these two sectors were still growing in Europe and they had not yet come up against low-cost competition.

At the Paris meeting, Mr. Darman reported, an international agreement based upon market disruption, such as in the cotton textile agreement, was proposed by the Europeans as a means of getting a unified approach to the problem. The United States industry delegation refused to discuss any details with regard to an international wool textile agreement. This has been a consistent position of the industry on the grounds that it was up to governments to negotiate details of any agreement. Mr. Darman said that the French industry delegation wanted language in a resolution which would recommend that governments not take unilateral action to curb imports of wool textiles while international consideration was being given to this problem. The United States delegation opposed the French proposal because the threat of unilateral action by the United Stares Government is of real concern to the Europeans. If we were to support such language it would eliminate the threat. The United States delegation, therefore, took the position that it was willing to go home without an agreement with the other industry delegations if such language were put into the resolution. The French delegation backed off from their proposal, which, Mr. Darman said, was an indication that the Europeans really want an agreement.

The Under Secretary said that the Department’s reading of the situation was that the Italian Government probably would be willing to negotiate an agreement, that the Japanese Government could probably be persuaded to enter into negotiations if other countries were to do the same, but that the United Kingdom Government remained adamantly opposed to an agreement. He mentioned that the British Embassy had given us an aide-memoire to this effect as recently as March 17.⁴ He asked the industry group what its reading was of the situation. Mr. Darman replied that the British industry had told the United States delegation that the kind of position which the United Kingdom gave the United States on March 17 was to be expected and that it was necessary for the United States at a high level to make a pitch for an agreement to the British Government.

Mr. Ball said that the British have the capability of digging in and not budging on an issue. However, we would not necessarily take the aide-memoire of March 17 as the final word on the situation.

Mr. Darman said that he had two pieces of information which he would like to convey to the State Department. First, he was told by Messrs. Schilling and de Precigoux, who were the heads of the German and French wool textile industries, respectively, that they had visited Wyndham White in Geneva recently to discuss the problem of wool textiles. The two industry representatives had informed Mr. Darman that Wyndham White had said that he felt GATT would not oppose an international wool textile agreement and that in view of the difficulty for any one government to raise the issue of an agreement, Wyndham White was willing to take the initiative to do so.

The second piece of information which Mr. Darman said he had was that Schilling reported he had had lunch with Ambassador Blumenthal in Frankfurt recently and that Ambassador Blumenthal, after hearing Schilling’s view of the need for an international agreement, was reported to have said that it was a constructive approach.

The Under Secretary said that it would undoubtedly be better for GATT or for the EEC to take the initiative in the matter. He had in mind canvassing the situation while in Geneva during the coming week. He suggested that the group meet again with him in two weeks, after his trip to Europe.

Mr. Darman thanked the Under Secretary for taking the time to see them.

1. Source: Johnson Library, National Security File, Subject File, Trade—General, Vol. I [1 of 2], Box 47. Limited Official Use. Drafted by Stanley Nehmer and approved in U on March 26.
2. The list is not printed. Under Secretary Ball met with eight representatives from the textile industry.
3. Morton Darman, Chairman of the Executive Committee of the National Association of Wool Manufacturers and President of the Top Company, Boston.
4. Text of the British aide-memoire of March 17 is in Department of State, Central Files, INCO–WOOL 4.