230. Telegram 4301 From the Embassy in the United Kingdom to the Department of State1

Subject: Reflections on USUK Relations and EC Renegotiation.

1. Summary: The Labor Government apparently wants to revive something closely akin to Britain’s erstwhile “special relationship” with the United States. We can only welcome this and should seize the opportunities it affords to further our policy objectives in a wide range of fields. At the same time, we should encourage Britain to view its ties with the US as complementary to, not a substitute for, its ties with the EC. If Britain remains in the Community, it would be a force for closer USEC cooperation. Its withdrawal, though, could set in motion an unravelling of the entire structure of Atlantic cooperation. If the renegotiation on which the UK is now embarked shows signs of breaking down, the USG may have to go beyond simply voicing continued support for EC survival. We believe we should speak out clearly to the British Government, and particularly to Callaghan, to underscore our basic commitment to a strong Europe of which Britain is a part. End Summary

2. Although British officials have not as yet started to speak of a “special relationship” with the US, the words and actions of the Labor Government during its first month in office strongly suggest that it hopes to restore USUK relations as closely as possible to what they were in the decade after World War II. Our contacts in the FCO tell us that one of Callaghan’s first acts as Foreign Secretary was to pass down word that the highest priority was to be given to close relations with the US. Callaghan reaffirmed this privately and publicly on repeated occasions over the past month. Sources close to Callaghan have made a point of telling us that he likes and respects Dr. Kissinger and expects to get on well with him.

3. We have reported various deliberate gestures by the new government to be more helpful towards US forces stationed in UK (London [Typeset Page 738] 4161 NOTAL). Ivor Richard, new UK PermRep to the UN, has told Ambassador Scali that he is under specific instructions to work as closely as possible with USUN (USUN 1093 NOTAL). On the critical question of defense spending, Lord Goronwy-Roberts, the government’s Defense spokesman in the House of Lords, said on April 3 that Britain’s defense effort should not be out of line with that of other European allies (the standard party line), but added the important qualification that the requirements of NATO would have first call. On the same day, in answer to a question in the Commons, Callaghan said in effect that there would be no problem about the retention of the US Polaris base in Scotland and expansion of base facilities in the Indian Ocean.

4. These are only straws and it is still early days, but clearly such a pronounced disposition to cooperate should be a useful adjunct to our diplomacy in many areas. The most critical area, however, is US-European relations, and here the British effort to renegotiate the terms of its EC membership presents complications.

5. The new British Government has made clear its desire to promote close consultation and cooperation between the EC and the US. It could be a powerful force for shaping USEC partnership, and we have an obvious interest in seeing it remain an active member of the EC. We also have an interest in preventing a withdrawal that could precipitate a general unravelling of West European relationships, involving the partial or total disintegration of the EC, the revival of rivalries between NATO members, the growth of Nordic neutralism, and various other developments inimical to the preservation of a strong Western Alliance. A special relationship with an introspective Britain, cast adrift from Europe and operating from a contracting economic and military base, would be of dubious value to the United States.

6. Whether or not Britain ultimately withdraws from the EC will depend in large measure on its political will to do so. Callaghan has said and his closest advisers reiterate that he does not want to see Britain withdraw from the EC. He does wish to renegotiate the terms and get satisfaction on the issues which he spelled out this week in Luxembourg. He reportedly does not wish to press so hard that the UK in effect would be forced out of the EC because it is not able to attain its goals.

7. Assuming that Britain’s partners are prepared to make some concessions, it will be up to the Labor Government to decide whether the concessions are sufficient to justify recommending their acceptance to the British electorate. At that point, the long postponed showdown between the pro- and anti-marketeers in the cabinet will come to a head, and Callaghan—the self-proclaimed agnostic—will clearly be the pivotal figure in making the final decision. Well before that day comes, the US should fully and frankly discuss with Callaghan and his prin[Typeset Page 739]cipal advisers US interest in European unity and a strong community to which Britain belongs and which aims at a positive, dynamic, and cooperative relationship with the United States. While the strongest theme of Callaghan’s foreign policy is friendship with the US, he reportedly does not look on this underlying consideration as involving a choice between the US and the EC. Both can be achieved, in Callaghan’s judgment, and are mutually supporting. But Callaghan’s views on US-European relationships are still in a formative stage, and a number of his closest advisers have pointedly suggested to us that it is of utmost importance for the US to spell out to him soon its views on the future of US-European relations. This is a suggestion that the Embassy strongly endorses. As Callaghan moves closer to the time of decision, he will be weighing many conflicting domestic and international considerations, and our conceptions of a vital US-European relationship in which Britain plays a major role might well tip the balance for him.

  1. Summary: The Embassy forwarded its thoughts on U.S.–UK relations and EC renegotiation.

    Source: National Archives, RG 59, Central Foreign Policy Files, 1974, [no film number]. Secret; Immediate; Exdis. Sent for information to Bonn, Brussels, Copenhagen, Dublin, The Hague, Luxembourg, Paris, Rome, the Mission to the EC, the Mission to NATO, and the Mission to the OECD. As a result of the February 28 UK general election, Heath’s majority Conservative government was replaced by a minority Labour government led by Harold Wilson on March 4. On March 28, Kissinger met with Callaghan and Wilson in London; memoranda of conversation on their talks are ibid., Records of Secretary of State Henry Kissinger, Entry 5403, Box 7, Nodis Memcons, Mar. 1974, Folder 5.