159. Telegram From the Embassy in France to the Department of State1

29812. USEEC. USMTN. Pass STR electronically for Ambassadors Strauss and Wolff. Subj: France and MTN—Storm Signals.

1. Summary: With the end of the summer lull, we have begun receiving the expected signals of trouble brewing on the MTN. This is not surprising following French discomfiture over the Geneva memorandum of understanding2 and the Bonn Summit communiqué.3 During the past few days, French Ambassador de Laboulaye has talked with me and MinEcon has also reviewed the situation with Paye,4 Barre’s diplomatic advisor. (I would appreciate it if our friends could be protected, and details of this message not get back to French [Page 499] sources.) French policy on MTN seems to be rather tightly layed down by Giscard himself. I believe our best approach for the early fall is to keep in touch informally with the French; to proceed with business as usual in Geneva; and to take them on frontally only after we have created a situation in which Community pressures (hopefully with the FRG in the lead) can be brought to bear on them. The next Franco-German summit is September 14–15 and we hope that Schmidt will reiterate his support for a successful MTN. End summary.

2. François de Laboulaye has made the rounds prior to his return to Washington, D.C. He told me he had discussed the MTN at the Elysée and had had a long talk with Barre as well. He found both men personally very tough on this subject. His conclusion is that, as far as France is concerned, there is little chance of meeting the mid-December target for conclusion of the negotiations.5 The French are acutely sensitive to any suggestion that the Geneva memorandum of understanding represents even an implicit agreement or series of potential commitments that point to probable outcomes on the various subjects.

3. Laboulaye’s judgment is that the French will only let the Community conclude the negotiations once the French have obtained the various specific concessions they want. All of this will require time and much detailed haggling as they see it. They are aware of the problem with Congress about expiration of our waiver authority on countervailing duties. But this does not give them any real sense of urgency.

4. In a frank talk with us, Paye said that while Barre favors a vigorous defense of French interests in the MTN, the most important factor remains Giscard’s “extreme coolness” on the whole subject. Paye hinted that he himself has wondered about just why Giscard is so negative. He believes that Giscard reasons along the following lines: There will be little positive benefit for French trade interests from the MTN—especially in a world characterized by rapid and substantial fluctuations in exchange rate relationships. On the other hand Giscard is likely to have a lot of domestic difficulty, including but not limited to the agricultural lobby, if he agrees to the kinds of things we are asking. (Comment: From a recent talk I had with Chirac6 it is clear that the Gaullists are watching the government like a hawk on everything that looks like giving in to US pressure.) Paye thinks that an additional concern for Giscard is doubt about whether the administration can deliver the Congress on a final package.

5. We gave Paye the counter-arguments which he already knew and appeared at least partly to accept. We stressed the urgency of get [Page 500] ting on with the negotiations. In response to a direct question he denied that France will adopt a spoiling posture aimed at killing the MTN by pressing the Commission negotiators to drag the thing out. Like Laboulaye, however, he said that the French intend to fight over every point of interest to them and will not feel pressured by the December deadline.

6. Comment: While none of the foregoing is especially new or surprising, it does provide further confirmation that Giscard is personally controlling the French MTN negotiators. At the appropriate time, Barre and Deniau might be helpful in working matters out. But I believe that judgments about this can be made only as specific situations develop during the fall. Meanwhile I suggest the best course will be to proceed with business as usual in Geneva; to keep in touch with the French and maintain good personal relations on MTN matters; and to try to create a situation in which pressure from within the Community—especially Schmidt—can be brought into play before we have to lock horns with them directly. Schmidt and Giscard are to meet bilaterally on September 14–15 and we hope that the FRG can again make clear its commitment to a successful MTN. End Comment.

  1. Source: National Archives, RG 59, Central Foreign Policy File, D780366–0774. Confidential; Immediate; Limdis. Sent for information to Bonn, Brussels, and the Mission in Geneva.
  2. For information on the Geneva memorandum of understanding, see Document 144. Regarding French concerns, see footnote 4, Document 147.
  3. See footnote 5, Document 148.
  4. Jean-Claude Paye served as Barre’s counselor for international questions from 1976 until 1979. No record of meetings between Hartman and de Laboulaye or the Embassy’s Minister for Economic Affairs and Paye has been found.
  5. December 15, 1978, was the agreed upon deadline for completion of the MTN; see Document 153.
  6. Jacques Chirac was the Mayor of Paris from 1977 until 1995.