Foreign Relations of the United States, 1964–1968, Volume XV, Germany and Berlin

55. Circular Telegram From the Department of State to Posts in European Economic Community Capitals¹

Washington, June 13, 1964, 5:36 p.m.

2339. Following is resume of points made by Herter in discussion with Erhard June 13 in response to question: “Does the United States consider that a unified grains price decision in the EEC now is indispensable to the success of the Kennedy Round?”:

1. A unified grains price decision now is not indispensable as far as the United States is concerned. We believe that negotiations on industrial products, agricultural products other than grains, and even on grains, could be carried right up to the concluding stage in Geneva without a unified grains price decision, if the EEC negotiator were in a position to negotiate on these matters.

2. In the view of the United States, the problem seems to lie therefore not in Geneva but in Brussels. It seems to have become an indispensable element in the internal bargaining situation with the EEC that the unified grains price decision be made now and that in the absence of such a decision the EEC representatives will be unable to enter into negotiations on virtually any matter in Geneva.

3. Unless the capabilities of the EEC to negotiate on industrial products and on agricultural products including grains is restored in one way or another, the timetable and even the final results of the Kennedy Round could be put in serious jeopardy. The preparations for the tabling of exceptions lists (which in the view of the United States must be done simultaneously for industry and agriculture) must be resumed at the latest by the end of the summer holidays if we are to meet the target date of November 16. In view of the already serious delays in the past, such further delays in the progress of the Kennedy Round would seriously endanger the negotiations. That would create a situation where the negotiations might well fail or at best be seriously impaired.

4. As far as the United States is concerned, the question of a unified grains price can in any case not be seen in isolation. While the United States wishes to see the lowest possible grains price in the Community, it is clear that any such price now being considered is so high as to require assurances for the maintenance of grain imports.

Full report of conversation follows.²

Rusk

1. Source: Department of State, Central Files, INCO–GRAINS–EEC. Limited Official Use. Drafted and approved by Greenwald. Pouched to posts in EFTA capitals.
2. A memorandum of the Erhard-Herter conversation was transmitted in airgram CA–13427, June 22. (Ibid.)