201. Memorandum of Conversation1

PARTICIPANTS

  • The President
  • Maurice H. Stans, Secretary of Commerce
  • Henry A. Kissinger
  • Carl Gilbert, Special Representative for Trade Negotiations
  • C. Fred Bergsten

SUBJECT

  • Report on Trade Mission to Europe

The President began the meeting by welcoming Mr. Gilbert to the Administration and asking whether he planned to accompany Secretary Stans on the forthcoming trade mission to the Far East. Mr. Gilbert replied that he was uncertain, given the need to remain in Washington to obtain Senate confirmation of his appointment. In view of this factor, and also to enable Mr. Gilbert to retain more running room in the future, the President decided that it would be better for him not to take this trip. (After the meeting, Secretary Stans asked Mr. Gilbert whether he could speed his hearings so that he could make the trip after all.)

Secretary Stans then reported on the European trip. Five major areas were discussed: the economic policy of the Nixon Administration; its trade policy; his “open table” proposal for examination of non-tariff barriers to trade; U.S. concern over agricultural protectionism in Europe; and textiles.

The Secretary reported that the Europeans greatly appreciated the fact that the trip had occurred and had made numerous favorable comments on the President’s own visit.2 The President affirmed his view that such contacts were highly desirable. Dr. Kissinger agreed.

The Secretary reported that the Europeans welcomed the U.S. commitment to freer trade. They stated that only the U.S. could take major initiatives in this area and stressed the need for the U.S. to repeal ASP. [Page 522]The Secretary also felt that progress had been made in conveying to the Europeans the depth of our political and economic concern over threats to our agricultural exports. Mr. Gilbert noted that the European Finance Ministers opposed the EEC farm policy, but the integrationists would not abandon it lightly in view of its effect on European unity. A discussion of agricultural problems ensued and the President reiterated his interest in rationalizing agricultural policy around the world. He noted that agriculture was our greatest domestic success and the Point IV program one of our greatest foreign policy failures. The Secretary reported that Prime Minister Wilson had told him that the proposed commercial arrangement between the UK and the EEC was dead.

On textiles, Secretary Stans explained in detail his proposal for a GATT meeting to consider a multilateral agreement and listed the nine arguments against that approach voiced in Europe.3 He reported that Belgium has since agreed “to support us” (sic: Belgium has agreed to a meeting but has made clear that it may oppose us on substance) and that he received sympathetic responses from the three Prime Ministers (in Germany, Italy, and the UK) with whom he discussed the subject. The President noted that Kiesinger should be responsive since textiles were really the only request we were making of Germany.

The President then noted that we should keep open the option of approaching the textile problem on a bilateral basis. Other items, including purely political ones, will have to be included if we are to achieve help in meeting our problem. Dr. Kissinger commented that, if the textile request were to be our only trade initiative, we would probably succeed only through bilateral approaches linking the issue to other non-trade matters. On the other hand, we might confine the negotiations to trade if textiles are subsumed in a broader U.S. trade initiative. Secretary Stans preferred the multilateral approach since it would provide us with a lever against countries which did not agree to bilateral restraints. Mr. Gilbert noted that the bilateral approach would enable other countries to claim compensation from the U.S., whereas no such compensation would be required under a multilateral arrangement and emphasized that the GATT organization wished to avoid deterioration into a debating society a la UNCTAD.

[Page 523]

The President decided that a full meeting of the NSC, attended by the members of the Cabinet Committee on Economic Policy,4 should be devoted to the trade issue before the mission to the Far East. He noted that foreign policy was basic to the over-all problem. Secretary Stans should report to the group on the European trip, and the meeting should then focus on Japan. The trade issue must be considered in the context of our over-all relations with Japan, which Dr. Kissinger noted are currently before the NSC. It was agreed that the NSC meeting on May 7 would be devoted to trade and that Okinawa would be considered on April 30.

The President also stated that, with the demise of de Gaulle, the U.S. should take the initiative on trade policy. The U.S. does have an obligation to lead and the French political change may push us toward doing so. We should see if Europe will unite now, as so many people have said would occur if only de Gaulle were not present.

Finally, Secretary Stans mentioned the desirability of reversing the recent decline in commercial personnel in our foreign posts. He also repeated his recommendation that the U.S. send the C 5-A to the Paris air show;5 the President directed Dr. Kissinger to look into the matter with the Defense Department.

  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Agency Files, Box 213, Commerce Volume I 1970. Confidential. Drafted by Bergsten. The meeting was held in the Oval Office from 4:36 to 5:15 p.m. (Ibid., White House Central Files, President’s Daily Diary) A copy of Secretary Stans’ written report to the President on his European trip were attached but are not printed. Bergsten forwarded the memorandum of conversation to Kissinger under cover of an April 29 memorandum. (Ibid.) Kissinger approved it and a copy was sent to the Department of State on May 9. (Ibid., RG 59, S/S Files: Lot 80 D 212, NSSM 16)
  2. The President traveled to Europe February 23-March 2. For talking papers prepared for his visit, see Foreign Relations, 1969-1976, vol. III, Documents 115 and 116.
  3. In an April 28 briefing memorandum to the President for this meeting, Kissinger called the President’s attention to this multilateral GATT proposal, which had attracted the most attention during Stans’ trip. “No country agreed to attend the proposed GATT meeting but none fully rejected the possibility. Several suggested alternative U.S. approaches; the European Commission asked for a detailed study justifying the existence of an economic problem, and the Germans proposed a GATT fact-finding study as a starter. All the Europeans stressed that our proposal would pit the U.S. and Europe against Japan and a few Asian LDCs, the political effects of which could be highly damaging.” (Ibid., Nixon Presidential Materials, NSC Files, Agency Files, Box 213, Commerce Volume I 1970)
  4. Regarding this Cabinet Committee, see Foreign Relations, 1969-1976, vol. III, Document 9.
  5. Kissinger flagged this “peripheral item” for the President in his April 28 briefing memorandum. While in Paris Stans sent a telegram to the President stressing the importance of getting the C5-A and the Boeing 747 to the Paris Air Show. (Telegram 5866 from Paris, April 24; ibid.) Kissinger told the President he supported Laird’s consistent disapproval of Ambassador Shriver’s request because, inter alia, the C5-A was not yet configured for overseas flights.