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

231. Telegram From the Embassy in Italy to the Department of State¹

Rome, July 20, 1964, 6 p.m.

162. For Under Secretary from Christopher. Wool Textiles. Mission had full and friendly discussion with Mattarella, Minister Foreign Trade and Ferlesch, Senior Foreign Trade Ministry official. Christopher explained US request against background Wool Textile problem being of great concern to US. He emphasized that US is asking Italy and other major Wool Textile trading partners to sit down at conference to discuss problem and is not asking Italy to agree to any solution to problem in advance of conference. Also pointed out growing role in US market of LDC’s wool textiles and said present may be time in advance of critical problem from LDC’s for developing countries to provide for orderly growth mechanism.

Christopher stressed that problem closely related to Kennedy Round. US ability to continue to play important role in KR and our ability to avoid pressures against long exceptions list would be enhanced by agreement of trading partners to attend conference. Conference would also significantly assist USG in meeting protectionist pressures.

Christopher then referred to interview in Daily News Record previously reported and said he was surprised and disturbed about this premature response to US mission. He pointed out article answers question which was not being asked of GOI, namely, to commit to International Wool Textile Agreement whereas mission was asking only for GOI participation in conference. Full translation to Italian of DNR article prepared by Embassy based on Deptel 163² was then handed to Mattarella.

Mattarella responded along following lines:

1) New cabinet will be formed tomorrow. He does not know if he will still be Foreign Trade Minister. Therefore, in no position to give authoritative reply to mission’s request.

2) Expressed regret and surprise re DNR article because he does not have official spokesman and would be annoyed if anyone in his Ministry would have anticipated present meeting, particularly since US Embassy had requested that meeting be kept confidential.

3) However, article reflects consistent attitude taken by GOI in past against International Wool Textile Agreement.

4) GOI opposition to agreement is based on unwillingness to enter into sector agreements which would only be way of restoring old quota systems in foreign trade field. Since other sectors in Italy have problems, GOI willingness to enter into Wool Textile Agreement would make it difficult for GOI to resist pressure from these sectors.

5) Conference suggested by USG raises delicate problem on eve of KR. GOI has similar pressures as USG re exceptions list. Wool Textile Conference would encourage various sectors to make similar demands on GOI to put their items on exceptions list.

6) Wool textile problem nothing like cotton textile problem which gave rise to long-term cotton textile arrangement. GOI does not view LTA with any enthusiasm because LTA does not meet general principles of broadening trade liberalization.

7) Conference proposed by USG must have possibility of reaching conclusion. Since GOI is opposed to agreement, he questioned usefulness of conference.

Christopher then explained in detail alternatives open to US to meet Wool Textile Industry pressure. Unilateral action as one alternative would represent reversal of US policy and administration has resisted it. If mission has to return home and tell Congressional leaders our major trading partners will not sit down at conference table, this will play into hands of protectionist elements.

Other alternative is multilateral approach which USG suggested. Conference would be exploratory examining problem and various solutions. USG would view possible outcome as liberalizing rather than restricting trade. USG feels strongly preferable for countries to discuss problem multilaterally rather than take unilateral action.

Love and Ruttenberg both joined in dialogue, expressing concern over effect of imports on US industry and urging that conference would assist US in overall trade liberalization.

In closing, Christopher emphasized his hope that Mattarella would recognize relationship of participation in International Conference to ability of US to resist exception list pressures and to overall US leadership in trade liberalization. Mattarella promised to have USG proposal studied carefully within GOI and, whether he or someone else was Foreign Trade Minister after tomorrow, response would be forthcoming in near future. Mission understands Mattarella stands excellent chance continuing as Foreign Trade Minister and, although Mattarella left door open, chances his agreeing to participate in conference based on foregoing report not good at this time.

Meeting with Medici and Mondello to be held late afternoon.

Reinhardt

1. Source: Department of State, Central Files, INCO–WOOL 4. Limited Official Use; Priority. Repeated to Brussels, for USEC, London, Tokyo, and Geneva.
2. Dated July 19. (Ibid., INCO–WOOL 17 US–IT)