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

233. Report of the Wool Textile Mission¹

Washington, July 28, 1964.

REPORT OF WOOL TEXTILE MISSION

July 15–21, 1964

Purpose.

The instruction to the mission, which was cleared by the President, was to attempt to secure the agreement of the Governments of Italy and the United Kingdom to participate in an international conference this Fall to discuss the wool textile problem and possible solutions, including an international agreement.

Foreign Officials Visited.

The mission met in London with Edward Heath, Secretary of State for Industry, Trade and Regional Development and President of the Board of Trade, and with Sir Richard Powell, Permanent Secretary of the Board of Trade. In Rome the mission met with Bernardo Mattarella, Minister of Foreign Trade; Giuseppe Medici, Minister of Industry and Commerce; and Ambassador Mondello, Deputy Director General for Economic Affairs of the Foreign Office. The mission was briefed by the American Embassies in London and Rome prior to meeting with the foreign government officials. Ambassador Bruce (London) accompanied the mission when it met with Secretary Heath. Ambassador Reinhardt (Rome) met with the mission after its meetings with Ministers Mattarella and Medici. The mission also stopped in Geneva to brief Ambassador Blumenthal and to get his appraisal of the current status of the Kennedy Round negotiations.

Industry and Labor Advisers.

The mission was accompanied by four unofficial advisers from industry and labor. They were Morton Darman, Chairman, Executive Committee, National Association of Wool Manufacturers, and President, the Top Co.; Milton Fried, Research Director, Amalgamated Clothing Workers; Robert Lynn, Vice President, Burlington Industries; and William Sullivan, President, Northern Textile Association. These advisers were thoroughly briefed by the mission both before and after the discussions held with foreign government officials. The advisers also met with Ambassador Blumenthal in Geneva and with Economic Counselor Mellen of the American Embassy in Rome.

Mission’s Presentation.

In addition to describing the condition of the U.S. wool textile industry, including the substantial growth in imports and the high rate of unemployment in the industry, the mission made the following points in proposing an international conference on wool textiles:

1. The U.S. proposal that there be an international conference this Fall was not intended to commit the governments in advance to an international wool textile agreement or any other specific solution. The U.S. envisaged that the conference would explore the problem and all possible solutions.

2. An international conference was closely related to the Kennedy Round in that it would enhance our ability to resist pressures for a long exceptions list. If our major trading partners refused to come to a conference, this would jeopardize our ability to have a short list.

3. The impact of wool textile imports from the LDC’s was already being felt by the U.S. It would only be a matter of time before other industrialized countries felt the impact of LDC trade in wool textiles. Now was the time, therefore, to take steps to provide for the orderly growth of such trade, as was done a few years ago in the case of cotton textiles through the mechanism of the Long-Term Cotton Textile Arrangement.

4. Political and economic pressures were building up in the U.S. for unilateral action on wool textiles which would be difficult to resist if our trading partners were unwilling even to attend a conference. The U.S. would much prefer to find a multilateral approach to the problem.

Response of Foreign Governments.

The British and Italian Ministers in London and Rome, whose responses were quite similar, replied along the following lines:

1. It was questionable that the U.S. wool textile industry was really being damaged by imports.

2. The U.S. proposal was inconsistent with the objectives of the Kennedy Round.

3. An international agreement on wool textiles, or even a conference to discuss the problem, would result in pressures for similar action by other industries. The shoe industry was mentioned particularly in London.

4. The LDC problem in the field of wool textiles was not a present problem, although it was agreed that this might be a problem in the future. Rather it was felt that the wool textile situation was mainly a problem among industrialized countries.

5. Coming so soon after the conclusion of the UN Conference on Trade and Development, the LDC’s could conceivably view an international conference on wool textiles as a threat to their position.

6. The U.S. wool textile industry presently received substantial protection through high tariffs.

7. Restrictions on trade through a multilateral agreement could be as restrictive as unilateral action.

8. Even though segments of the wool textile industry in Italy and the United Kingdom favored an international agreement, the governments concerned did not feel it would be in the national interest of their countries to have an international agreement.

9. Since the governments were opposed to an international agreement, it would be a fruitless exercise to have an international conference.

The British Government gave its response to the U.S. proposal shortly after the conclusion of the meeting with Mr. Heath and Sir Richard Powell. Sir Richard Powell informed Mr. Christopher that the UK Government, on broad grounds of commercial policy, was not willing to participate in an international wool textile conference at this time. He offered little hope as to the possibility of a change in the British view in the foreseeable future.

In Rome, Minister Mattarella, whose Ministry has the prime responsibility for making a decision on the U.S. proposal, was not certain as of the time the mission met with him that he would continue as Minister of Foreign Trade in the new Moro Cabinet. His response during the course of the meeting was negative. Subsequent to the departure of the mission from Rome it was learned that Minister Mattarella will continue as Minister of Foreign Trade. Minister Medici was more encouraging but indications are that he has only a limited responsibility in this field. Ambassador Mondello suggested a meeting with Ambassador Ortona, Director General of Economic Affairs in the Ministry of Foreign Affairs, who was in Washington. (Assistant Secretary of State Johnson met with Ambassador Ortona on July 24.) A response from the Italian Government, which the mission fears will be negative, is expected in the near future.

Conclusions.

The joint State-Commerce-Labor mission did everything it could to secure the agreement of the British and Italian Governments to attend a conference in accordance with the mission’s instructions. This was the first direct approach by a special U.S. mission to persuade these governments to participate in a conference on wool textiles. Although the mission was turned down by the United Kingdom Government and may be turned down by the Italian Government, we believe it was helpful in clarifying the position of the United States Government, both to the other governments and also to our Embassies.

If we desire to continue to press for an international conference, further efforts plainly will be necessary to convince these governments of the desirability of attending such a meeting. For example, there will have to be, at an appropriate early time, follow-ups with the British and Italian Governments at a high level, perhaps accompanied by an aide memoire to emphasize the importance of this matter. In addition, it would be necessary to make this same approach through diplomatic channels to the Japanese so that they will be fully familiar with our position.

Beyond these follow-ups, the timing and nature of additional efforts would depend on other developments not known at this point. The first of these is a final response from the new Italian Government, which will probably be confirmed in the near future. Another is the British elections which are expected to be held in mid-October. It might develop that a Labor Government will be elected and its attitude to the U.S. proposal is, of course, not known at this time. A third development is the tabling of the exceptions list in the Kennedy Round, which, according to presently agreed timing, will be in mid-November. If wool textiles are included on the exceptions list by the U.S., this could be an important factor in the attitude of some of the governments concerned.

Ambassador Blumenthal suggested to the mission in Geneva that after the exceptions have been tabled it might be possible to develop a sector approach for wool textiles within the Kennedy Round. This would probably involve reductions in certain wool textile tariffs in exchange for quantitative assurances on the level of wool textile trade. The mission believes that this may be a useful approach and should be considered as progress in the Kennedy Round is made if no other approach has been adopted in the meantime.

References.

Attached to this report are memoranda of conversation with Secretary Heath, Ministers Mattarella and Medici, and Ambassador Mondello.² In addition, reference should be made to the following telegrams to the Department of State: Embassy London 291 of July 17 and 328 of July 21;³ Embassy Rome 162 of July 20 and 170 of July 21.⁴

Submitted by:

• Warren M. Christopher ⁵
  Special Representative of the Secretary of State
  Chairman
• James S. Love, Jr.
  Deputy to the Secretary of Commerce
• Stanley H. Ruttenberg
  Special Assistant to the Secretary of Labor
• Stanley Nehmer
  Deputy Director Office of International Resources Department of State

1. Source: Washington National Records Center, RG 40, Secretary of Commerce Files: FRC 69 A 6828, Textiles, President’s Advisory Committee. Limited Official Use. No drafting information appears on the source text. At the top of the source text is a handwritten note indicating a letter of transmittal was sent to the White House on July 31. This letter has not been found.
2. None of these four memoranda is printed.
3. Neither printed. (Department of State, Central Files, INCO–WOOL 3 and INCO–WOOL 17 UK-US, respectively)
4. Documents 231 and 232.
5. Printed from a copy that bears these typed signatures.