Foreign Relations of the United States, 1964–1968, Volume XXXIV, Energy Diplomacy and Global Issues

11. Memorandum From the President’s Special Assistant for Science and Technology (Hornig) to President Johnson ¹

Washington, July 15, 1967, 1:30 p.m.

SUBJECT

• Highlights of Trip to Europe on the Technological Gap June 21–July 7, 1967²

Political concern in Europe with the technological gap remains high. However, there has been a healthy shift in emphasis. Last year European political leaders seemed to feel the United States had developed a mysterious technique for moving ahead in science and technology which Europe could not match. They (e.g. Fanfani of Italy and Harmel of Belgium) called on the United States to restore the balance. Today, they see the problem more clearly as one of putting technological knowledge rapidly to effective use. They recognize that all of the major factors are ones they must deal with themselves, and there is no longer talk of a “Marshall Plan for technology.” But a deep uneasiness remains. There is a quite general feeling of having to defend themselves against the American colossus. They still want a “helping hand.”

Two favorable developments have resulted from the heightened political interest in the technological gap. First, all the countries have stepped up the amount of resources devoted to higher education and to scientific research and development, some of them dramatically. Second, there is a growing feeling that European industry must be restructured on a continental scale, including the U.K., to get the scale of operation needed to take advantage of the opportunities offered by modern science and technology. In France this view was strongly held by industrial leaders, although it runs counter to de Gaulle’s European policy.

On the other hand, we encountered evidence of rising nationalism everywhere, most clearly in Germany,³ where the view was expressed, for example, that a major modern State must have an independent capacity to produce computers which are the key to the new society of the electronic age. In France and the U.K. this view was shared and applied as well to the aeronautics industry.⁴ Concern was expressed about extra-territorial controls resulting either from decisions taken in the home office in the United States affecting investment and employment policies of European subsidiaries or from the various U.S. Government rules and regulations applicable to transactions of subsidiaries in Europe by reason of the control of the parent company in the United States (e.g., trade with Eastern Europe). Of course, their economists generally agree with us that from a purely economic standpoint we all do best by letting the most efficient source provide new technology, no matter where it is.

The critical policy issue to be faced by these countries, therefore, is the economic price they want to pay for such independence of national operations. It is clear that they are willing to pay some price, and this could lead to discriminatory measures against U.S. corporations.

The Europeans feel they will ultimately find a European solution to their problems. Their principal concern is that this may be a slow process and in the interim American industry will securely establish itself in the lead in the key technologically advanced sectors and control important elements of the European economy.

The U.S. posture of refraining from taking initiatives—and of friendly cooperation—has proved to be successful. However, the fear within Europe of U.S. domination in key European industries is a source of political strain. There are undercurrents of concern on this issue in certain countries that could damage our political and commercial ties with Europe.

A possible constructive action which was discussed generally in every country was a “code of corporate good citizenship” which might be generated informally or through international agreement. It would (1) be a guide to good citizenship of international corporations in host countries and (2) protect corporations against discrimination if they complied.

It was my general impression that in all of the six countries visited (plus NATO, OECD and EEC) there was real appreciation of the concern by the U.S. for their problem and the search for constructive action. The Ambassadors all felt that the visit had created a great deal of good will.

The conclusions from this trip, as well as the results of the studies undertaken here, will be incorporated in the report of our Technological Gap Committee which we hope to submit to you on September 1st.

Donald F. Hornig ⁵

1. Source: Johnson Library, Papers of Donald F. Hornig, Box 4. Secret. Drafted by Daniel F. Margolies, Beckler, and Hornig.
2. In a May 18 memorandum to the President, Hornig raised the idea of a mission to Europe to discuss technology gap issues. (Ibid.) He explained that since November 1966, when he had been named to chair the interagency committee studying the problem, the Europeans had been expecting a visit, an idea that was supported by the State Department. Prior to his departure on June 21, Hornig updated the President’s Special Assistant, Marvin Watson, on the issues and included a request: “Since it is a tight rope walk, I would very much like to meet very briefly with the President to get his point of view so I can take a stance which coincides with his outlook.” (Memorandum from Hornig to Watson, June 21; ibid., National Security File, Agency File, Office of Science and Technology, Vol. 1 (1967)) No record that Hornig spoke with the President prior to his departure has been found.
3. Hornig’s discussions in Germany are detailed in telegram 162 from Bonn, July 6. (National Archives and Records Administration, RG 59, Records of the Department of State, Central Files, 1967–69, ORG 7 OST)
4. The meetings in France are summarized in telegram 3 from Paris, July 1. (Ibid., SCI 1–1 EURW–US) The London visit is reported in airgram A–454 from London, August 2. (Ibid., ORG 7 OST)
5. Printed from a copy that bears this typed signature.