Office of the Historian

247. Telegram From the Department of State to the Embassy in the United Kingdom1

Washington, January 13, 1965, 7:23 p.m.

4309. UK Grains Agreement. Embassy requested deliver note along following lines to appropriate officials of UK Government.

Begin text: The Government of the US views most seriously the anticipation that UK imports of cereals in the crop year 1964–65 will be only 8,200 thousand tons. This anticipated level of imports is significantly less than 9,038 thousand tons, the average volume of UK imports during the three years preceding July 1, 1964. As indicated in paragraph 11 of the Exchange of Letters, under such conditions the Government of the United Kingdom has agreed to take effective corrective action at the earliest practicable time to remedy the situation if this decline has taken place or threatens to take place because the policy changes have failed to be effective in maintaining this volume.

The USG believes that it is now apparent that the standard quantities as presently constructed cannot be expected to act as a significant [Page 655] disincentive to production and therefore their effects on imports will be minimal. It considers, therefore, that prompt and effective remedial action is in order.

The US must face the possibility that its grain exports to the UK will become subject to levies from time to time during the coming years. Consequently it is all the more important that effect be given to the provisions of the agreement which are designed to compensate for the trade restrictive effects of such levies.

The US shares the United Kingdom’s hope that the agreement should facilitate broader cooperation among cereal exporting and importing countries, in the GATT and elsewhere. However, this expectation will be valid only to the extent to which the participants demonstrate their determination and ability to make the agreement work.

The US Government also takes this opportunity to reemphasize the importance which it attaches to the UK making known to the US as early as possible the adjustments which the UK Government proposes to make in its domestic programs for the coming crop years. End text.

Canadian, Australian and Argentine Embassies have been informed.

Rusk
  1. Source: Department of State, Central Files, INCO–GRAINS 17 UK-US. Limited Official Use. Drafted by L. Schertz (USDA/FAS); cleared by I.R. Hedges (STR), Stanley Nehmer (OR), Sidney Weintraub (OT/GCP), and Frank M. Tucker (EUR/BNA); and approved by Fred H. Sanderson. Repeated to Buenos Aires, Canberra, Ottawa, and Geneva for GATT.↩