25. Memorandum From the Presidentʼs Special Assistant (Rostow) to President Johnson1
SUBJECT
- Meeting with Prime Minister Holt2
You may wish to ask Holt about his talks with Wilson. The main focus was on the East of Suez problem. Holt pressed the British hard on the political importance of not reaching a final decision on total withdrawal of forces by the mid-1970ʼs.
You may wish to ask him:
What do the British mean when they talk of keeping “a substantial capability for use in the area?” Should we jointly try to nail them down on specifics? Does Holt think there is any chance of the British delaying a firm decision or “planning assumptions” on withdrawal. (Summary of East of Suez problem at Tab C.)3
Holt undoubtedly will raise:
- —the Kosygin visit and your plans for meeting the Soviet leader;
- —the prospects in the General Assembly;
- —outlook for a solution of the Middle East problem;
- —prospects in Viet-Nam and the meaning of the McNamara visit.
His principal interest will almost surely be bilateral economic problems. You received a separate memo on this from Francis Bator (Tab A).4 Detailed treatment, with pros and cons on each issue, is attached (Tab B).5
The main elements are:
Interest Equalization Tax—Australia wants an exemption. This would raise serious problems on the Hill and with other borrowers. We [Page 63] proposed an Ex-Im Bank credit. The Australians turned it down for “technical reasons.” You might ask Holt to reconsider. If he is negative, you might propose an Ex-Im Bank guarantee for an Australian bond issue of $50 million. There would be no IET on such an issue; it would cover about two yearsʼ worth of Australiaʼs New York borrowing at present rates. Treasury (Fowler) will be unhappy unless the offer depends on a balance of payments offset.
Meat—Aussies are worried about possible Congressional restrictions on meat imports. You may wish to assure the Prime Minister you will make a maximum effort to prevent passage of such legislation.
Lead and Zinc—Australians are concerned about pending import control legislation. You may wish to reassure him that you will try to prevent reimposition of import quotas. You might mention the stockpile problem. Unless imports are cut back, we face trouble with plans for disposal of about $600 million of lead and zinc considered surplus to our needs.
Dairy Products—Holt is concerned about legislative restrictions on dairy imports, and possible Tariff Commission proceedings. You could assure him (1) you will oppose protectionist dairy legislation, and (2) Tariff Commission action may limit imports below the high 1966–67 level, but Australian imports are not likely to be much lower than the healthy 1962–65 level.
Wool—A tariff cut of the size the Australians want would cost us about $33 million a year—$19 million lost in customs receipts, $14 million in additional subsidy payments to producers. We have long linked action on wool to Australian liberalization of tobacco tariffs. All concerned recommend against any liberalization on wool tariffs.
Sugar—Australia has been pushing for a new international sugar agreement. None of our specialists think it has a chance.
In addition, you may wish to press Holt for greater Australian help to Indonesia (see Tab D).6 We have committed so far $33 million; others have offered about $117 million; Australia only about $770,000. We would be grateful if Australia could offer more at The Hague meeting later this month.
- Source: Johnson Library, National Security File, Country File, Australia, Visits of Prime Minister Holt, June 1–2 and 17–19, 1967. Secret. There is an indication on the source text that the President saw it.↩
- Prime Minister Holt and his wife spent the weekend of June 17–18 at Camp David with the President. There were numerous occasions for the President and the Prime Minister to talk, but the most formal discussions took place on June 18, from 6 to 7:45 p.m. In addition to the President and Holt, Sir John Bunting, Ambassador Clark, and Under Secretary of Agriculture John Schnittker attended. (Ibid., Presidentʼs Daily Diary) No other record of this meeting has been found.↩
- Tab C, a background paper entitled, “East of Suez,” was attached to a June 16 memorandum from Rusk to the President. (Department of State, Central Files, POL 7 AUSTL)↩
- Dated June 15. (Johnson Library, National Security File, Country File, Australia, Holt Visits, June 1–2 and 17–19, 1967)↩
- The detailed treatment, entitled “United States/Australia Bilateral Economic Issues,” was attached to the June 16 memorandum from Rusk to Johnson. (Department of State, Central Files, POL 7 AUSTL)↩
- Not printed. (Ibid.)↩