Foreign Relations of the United States, 1977–1980, Volume III, Foreign Economic Policy

179. Memorandum From the Special Representative for Trade Negotiations (Strauss) to President Carter¹

Washington, November 13, 1978

Pursuant to my telephone conversation with you,² this will advise that everywhere I went this past week, I found encouragement to complete the trade negotiations by the end of the year except for France.³ The French are negative and Giscard is specifically upset over our failure to extend the waiver of countervailing duties. In addition to the issue, he probably is using this as an excuse to delay the successful conclusion of the Tokyo Round which has been the goal of the French throughout the negotiations.

Schmidt had been with Giscard the week before and had talked with him by phone since that time. He confirmed the hard negative attitude of the French and specifically suggested that a call from you to Giscard would be particularly effective.⁴ He further suggested that if, in connection with the call, you were inclined to accept the invitation to join them in the meeting they are having shortly after the first of the year,⁵ it would be particularly flattering. If you do talk with him, please keep in mind that we have a December 15 closing deadline which we badly need for Congress. It will still take at least 7–8 months for a vote.

Chancellor Schmidt also specifically requested that I advise you directly that he personally would be appreciative if the percentage of German marketing of U.S. bonds abroad be kept cloudy.⁶ He advised that he was under considerable criticism directed toward his permitting German investment capital leave the country at a time when they are having their own problems.

I am leaving today for Geneva where we will spend the week with all nations represented. If the French don’t veto action, we can complete these negotiations on schedule.

1. Source: Carter Library, National Security Affairs, Brzezinski Material, Subject File, Box 63, Special Representative for Trade Negotiations (STR): 3/77–3/80. No classification marking. Carter initialed “C” at the top of the page.
2. Carter spoke with Strauss by telephone on November 11 from 6:08 until 6:13 p.m. (Carter Library, Presidential Materials, President’s Daily Diary)
3. Strauss met with European officials on November 9 and 10. Attached to this memorandum, but not printed, is an undated paper entitled “SUMMARY: Strauss Meeting with Barre.” Telegram 20886 from Bonn, November 10, reported on Strauss’ discussion with Lambsdorff, and telegram 20887 from Bonn, November 10, recounted Strauss’ meeting with Schmidt. (National Archives, RG 59, Central Foreign Policy File, D780465–0481 and D780465–0462, respectively) Telegram 37158 from Paris, November 10, reported on Strauss’ discussion with Barre. (National Archives, RG 59, Central Foreign Policy File, D780464–1198) Telegram 21460 from Brussels, November 10, reported on Strauss’ conversation with Jenkins, and telegram 7336 from Copenhagen, November 13, recounted Strauss’ meeting with Danish Prime Minister Anker Jorgensen. (National Archives, RG 59, Central Foreign Policy File, D780465–0709 and D780467–0256, respectively)
4. In a November 13 memorandum to Carter, Owen recommended that Carter telephone Giscard as “Schmidt is anxious for us to convince Giscard ‘that the failure to pass the waiver was an accident due to last-minute maneuvering in the Congress and was not a deliberate plan to pressure the EC.’” According to Owen, Carter’s call to Giscard “could be decisive.” Carter indicated his approval of Owen’s recommendation. (Carter Library, National Security Affairs, Brzezinski Material, Brzezinski Office File, Country Chron File, Box 12, France: 1978) Carter and Schmidt discussed Giscard and the MTN during a telephone conversation on November 20. (Carter Library, Plains File, President’s Personal Foreign Affairs File, Box 1, Germany, Federal Republic of, 9/77–1/80)
5. Carter, Giscard, Schmidt, and Callaghan met for informal discussions at Guadeloupe January 4–9, 1979.
6. Carter highlighted the section of this paragraph containing this sentence and wrote in the adjacent margin “Schultze.” In his November 13 memorandum to Carter (see footnote 4 above), Owen wrote that he would advise “Treasury of Schmidt’s point about bond sales.”