218. Telegram From the Mission to the European Community to the Department of State1

4124. Pass Treasury for Secretary Connally/White House. Pass Eberle. Subject: EC-US trade negotiations.

1.
Due to French opposition, the EC Council was unable at its meeting on December 11 to adopt a formal mandate to the Commission to begin trade negotiations with the United States. Instead, the Council adopted a “declaration of intent” (text not available) which stated that the Community should open negotiations with the US “as soon as possible.” The Counsel instructed the EC PermReps to prepare a formal mandate, and said that the Commission should report to the council on the results of the negotiations at the end of January.
2.
According to Commission Secretary General Noel, the mandate which the PermReps will prepare will require formal Council approval before negotiations can actually begin. This could be accomplished, however, by “written procedure,” which would not require a meeting of the Council. Noel, Commission Vice President Mansholt and other Community officials expressed doubt, however, that a mandate will be approved in time for negotiations to begin next week.
3.
The “declaration of intent” adopted by the Council also states that a realignment of parities should lead the Community to make a significant contribution to the solution of trade problems and the balance of payments problems of the United States. It says that the special characteristics of agricultural trade and the growing importance of non-tariff barriers open up opportunities for new initiatives, which could include adjustments in the GATT. It says that the Community is prepared to negotiate on the basis of mutual advantage and reciprocity.
4.
During the Council discussion, the EC Commission and all the member states except France strongly advocated immediate adoption of a formal negotiating mandate, on the basis of the commitment made by Italy’s Treasury Minister Ferrari-Aggradi at the Rome meeting of the Group of Ten. French Foreign Minister Schumann maintained that Ferrari-Aggradi’s statement had not been a Community commitment. He pointed out that the member states had only received proposals [Page 594]from the Commission on the day before the Council meeting, and said that serious matters of this kind required careful consideration. Schumann stressed that the Community should not put into effect any trade concessions in the United States before it was certain that the US could participate in a general realignment of parities (i.e., before Congress approved a change in the price of gold).
5.
While the other member states sought approval of a mandate at this meeting, most of them expressed the view that the US has been pressing too hard and that the belief that trade negotiations could produce results in the course of next week was beyond the realm of the possible.
Schaetzel
  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Subject Files, Box 356, Monetary Matters. Confidential. The copy of the telegram printed here does not have the list of posts to which the telegram may have been repeated. It is attached to a December 11 memorandum from Peterson to Kissinger entitled “Trade Negotiations Status—To Take With You to Azores Meeting.”