Foreign Relations of the United States, 1969–1976, Volume III, Foreign Economic Policy; International Monetary Policy, 1969–1972

43. Memorandum From the Deputy Under Secretary of State for Economic Affairs (Samuels) to the President’s Assistant for National Security Affairs (Kissinger)¹

Washington, August 20, 1970.

SUBJECT

• USC Meeting on EC Enlargement

On August 12 the Under Secretaries Committee held its first meeting on the enlargement of the European Communities pursuant to the directives of NSDM 68.² As Chairman of the Committee for this meeting I would like to summarize for you the principal issues discussed:

1. Consultative Mechanism. I recounted to the Committee my recent talks with Commissioner Dahrendorf to establish a series of regular US-EC consultations. Dahrendorf and I tentatively agreed that these consultations should be held at least semi-annually and more frequently if necessary.³ An agenda for each consultation would be agreed in advance and there would be maximum continuity and follow-up. The first consultation is tentatively scheduled for mid-October in Washington and we will confirm precise dates shortly. The Under Secretaries Committee agreed to this procedure. It was also noted that to ensure maximum continuity it would be desirable, insofar as possible, for the same people on both sides to participate in each of these meetings.

2. Notification to Europeans of US Interests. Discussion on this subject centered on two issues: the substance of our initial notification and the form of notification.

As to the substance, a draft “talking points” paper had been circulated prior to the meeting, and some preliminary comments were made on it at the meeting. Several agencies took the view that the language in NSDM 68 (Para 1) supersedes other statements by the President on European policy—notably the President’s February message on foreign policy⁴—while State contended that all of the President’s statements to date are consistent and may be drawn upon to express US policy. Specifically the view was expressed that the policy of favoring broadening and strengthening the community has now been watered down to favoring only “expansion” of the membership of the Community. An inter-agency working group was instructed to develop further the substance of the initial communication of US interests to the Community.

As to the form of notification to the Commission, there was agreement that it should take place at an early date, probably at the first US-EC consultation in October. Communication would also be made to national governments through our embassies. There was discussion of the pros and cons as to whether the communication should be oral or written, but it was decided to wait until the substance was agreed before deciding this point.

3. Preferential Arrangements. A position paper on EC preferential arrangements with Morocco, Tunisia, Spain, and Israel had been circulated prior to the meeting. The thrust of the paper was:

a. These four arrangements as presently constituted are inconsistent with the GATT.

b. We should identify, as soon as possible, potential damage to specific American exports and try to set up a bilateral meeting with the European Communities to look at possible measures to reduce the anticipated injury.

c. We would not wish to push formal GATT consideration of the preferential agreements while the bilateral talks are in progress.

Several agencies, notably the Department of Agriculture, took issue with this approach. They suggested instead that we promptly notify the EC and (presumably) the four Mediterranean countries that we object to the principle of these arrangements as contrary to the GATT and, unless they have proposals to redress the present situation, we intend to raise this issue at the September 29 GATT Council meeting to reiterate American opposition to the principle of these agreements and to invoke GATT Article 28. This action could lead to requests by us for compensation or failing to get satisfaction, for authority to retaliate.

An inter-agency working group was instructed to look into the details of such a course of action and report back to the Committee.

4. Assessment of Specific Trade Interests. For use throughout the course of the enlargement negotiations, a technical working group was instructed to begin as soon as possible to assemble the detailed tariff and other technical information necessary to assess the effect on US interests of specific proposals as they are put forward at Brussels.

By and large the first Under Secretaries Committee meeting elicited a lively exchange on the above issues. In view of the September 29 GATT meeting and the first US-EC consultation in mid-October, it will likely be necessary to hold another meeting of the Under Secretaries Committee in early September.

Conclusion. In summary, it is clear that there is a deep-seated and widespread hostility toward the Community in several agencies of the Executive Branch. Political considerations are brushed aside as largely irrelevant, and attention is focused on short-term economic considerations in a manner out of proportion to our long-term interests. It would be desirable for US policy toward the Community to be made unmistakably clear to the heads of all the Executive Agencies, with the directive that this be conveyed clearly to their staffs.

NS

1. Source: National Archives, RG 59, S/S Files: Lot 73 D 288, Box 837, USC/NSC. Confidential.
2. See Document 42 and footnote 3 thereto. In preparation for the meeting, on August 7 Staff Director Arthur A. Hartman circulated to the Under Secretaries Committee several papers, including “Draft Talking Points To Be Used With Parties in EC Enlargement Negotiations.” (National Archives, RG 59, S/S Files: Lot 81 D 309, NSC-U/SM 73A)
3. In his August 5 Evening Report to the President, Secretary Rogers wrote that during the trade policy talks in Geneva, Deputy Under Secretary Samuels and EC Commissioner Dahrendorf had come to a verbal understanding on periodic talks on matters of mutual interest. Rogers thought the initial consultation would be in Washington between mid-October and mid-November, and Dahrendorf would head the EC delegation. He also pointed to a possible visit by Commission President Malfatti in early 1971 for an exchange of views with President Nixon. (Ibid., S/S Files: Lot 74 D 164)
4. U.S. Foreign Policy for the 1970’s: A New Strategy for Peace, A Report to Congress, February 19, 1970 (Washington: U.S. Government Printing Office, 1970). Also printed in Public Papers of the Presidents of the United States: Richard M. Nixon, 1970, pp. 116-190.