17. Memorandum From the President’s Special Assistant for Science and Technology (Hornig) to President Johnson1

Attached is a final report of the interagency committee on the “technological gap” between the U.S. and Western Europe2 which you created in November 1966 under my chairmanship (NSAM 357). Your action was taken after the “gap” issue had been raised with you by several European leaders, e.g., Prime Ministers Wilson and Harmel and Italian Foreign Minister Fanfani.

The committee report has the agreement of the participating agencies (State, Defense, Commerce, NASA, AEC, CEA). There are no major differences of view for you to resolve, and the agencies are prepared to undertake the follow-up actions.

In brief, the report proposes that the U.S. Government continue to follow the “low-key” strategy recommended in our preliminary report a year ago. It concludes that there is little that the U.S. can or should do by way of major initiatives or direct assistance, since the only long-range “cure” lies in actions which must be taken by Europeans themselves.

This strategy has already paid off handsomely. During the past year much of the mystique (and political and emotional heat) has gone out [Page 38] of the “gap”, largely as the result of studies carried out in the OECD and NATO and in the European Communities.

There is now widespread agreement among Europeans that the “gap” is principally a lag in the utilization of technological know-how due to a number of factors—education, management, markets, etc., as well as technology. This was evident at the OECD Ministers of Science meeting which I attended on March 11 and 12. European attention appears to be shifting from “gaps” to creating the conditions needed to relate technological developments to progress.

While the committee report recognizes that the big steps needed to improve European industrial performance can only be taken in Europe, it urges that the U.S. make a positive response to European concerns—to deter the possible adoption of restrictive measures against American firms in Europe and to maximize the economic benefits to the U.S. from the transfer of technology.

To implement the foregoing strategy, the report proposes a number of steps (Attachment A):

  • —mutual reduction of non-tariff barriers to the flow of technology-intensive products;
  • —improving the administration of our trade and financial controls on the flow of technology to Western Europe, and developing a better understanding among COCOM members of the technological issues involved in their controls;
  • —a study by the Cabinet Committee on Balance of Payments to define the role of American direct investment in Western Europe in relation to U.S. economic and foreign policy goals;
  • —developing international principles concerning the rights and responsibilities of foreign subsidiaries;
  • —expanding Western European direct investments in the U.S.;
  • —cooperating with Western European countries on government-financed development and procurement;
  • —intensifying U.S./Western European educational exchange programs in selected areas, particularly industrial management;
  • —promoting the exchange of scientific and technical information, international patent cooperation and the development of common commercial standards;
  • —encouraging further U.S.-European technological cooperation on governmental programs of common interest such as pollution, transportation and urban problems.

The Committee further recommends: (a) that the report be transmitted to our Ambassadors in Western Europe for comment and for advice regarding the desirability of public release of an edited version, and (b) that the report and recommendations be submitted to the Senior Interdepartmental Group (SIG) for follow-up action.

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Accordingly, I recommend that you approve these two recommendations and that the agencies be informed that they may proceed along the lines agreed in the report.

Refer report and recommendations to the SIG for follow-up: Yes__No__4

Donald F. Hornig 3
  1. Source: Johnson Library, Papers of Donald F. Hornig, Box 6. Confidential. Drafted by Beckler.
  2. Attachment A, not attached. The final technology gap committee report as distributed to posts is in circular airgram 8702, June 14. (National Archives and Records Administration, RG 59, Records of the Department of State, Central Files, 1967–69, SCI 1–1 EURW–US)
  3. Neither option is checked, but see Document 18.
  4. Printed from a copy that bears this typed signature.