European drive toward unity nor seriously impaired the value of the integration so far achieved through the EEC. Obviously, it is in the interest of the whole Free World that the EEC develop in an outwardlooking manner and that it not acquire autarchic characteristics. We propose to use our influence to this end.

Second, we shall seek to advance the arrangements for close economic cooperation with Europe through the OECD. We shall also continue to develop close cooperation in the monetary field through the IMF, the Committee of Ten," and Working Party Three of the OECD.

Third, we shall continue to work toward the strengthening of NATO and the development of adequate conventional forces in Europe. We see dangers in the proliferation of national nuclear deterrents but we recognize the desire of Europeans to play a full role in their own nuclear defense. We have, therefore, proposed the crea tion of a multilateral nuclear force, within NATO, 38 and we reached agreement with the British Government at Nassau for the mutual support of such a force.39 Ambassador Livingston Merchant is going to Europe next week for exploratory discussions.40

42

Fourth, we intend to utilize to the fullest the powers granted to the President under the Trade Expansion Act 1 in order to improve access to the European Common Market as well as other major world markets for products of United States farms and factories. Governor Herter intends to press liberalization of trade as rapidly as possible.*2 Since General de Gaulle's press conference on January 14," suggestions have been put forward for the United States to join in special commercial relations with one or another group of nations to form a trading bloc competitive with the European Common Market. We do not believe that this would be sound policy. For thirty years, the United States has consistently adhered to the most-favored-nation principle and to the expansion of trade on a nondiscriminatory basis. For us to enter into preferential trading relations with any nation or nations would mean discrimination against all other nations. Such a policy would be inconsistent with our position as the leader of the Free World.

You and Congressman [Henry S.] Reuss have raised the question of the adequacy of the powers provided by the Trade Expansion Act if it should develop that the UK does not become a member of the EEC prior to the opening of the Kennedy round of negotiations. You have introduced legislation that would so amend the Act that the scope of the so-called "predominant supplier" clause would be unaffected by the failure of the UK-EEC negotiations. The Adminis

37

See American Foreign Policy: Current Documents, 1962, pp. 251–253. 33 See ibid., 1960, p. 318.

30 See ibid., 1962, pp. 635-637.

40 See ante, doc. IV-4.

41

Text in American Foreign Policy: Current Documents, 1962, pp. 1383-1396 42 See ante, doc. IV-6.

43 Ante, doc. IV-42.

tration's position with respect to this proposed legislation was stated by the President at his press conference of February 7 when he said:

No, we hadn't planned to ask the Congress, because we do have the power, under the Trade Expansion bill, to reduce all other tariffs by 50 per cent, which is a substantial authority. We lack the zero authority.

On the other hand, it is going to take some months before these negotiations move ahead. It is possible there may be some reconsideration of the British application. I would be responsive and in favor of legislation of the kind that you described. It is not essential, but it would be available, and if the Congress shows any dispositions to favor it, I would support it.

Fifth, we propose to continue to develop techniques to improve the cooperation of the major industrialized powers in providing assistance to the less-developed countries. This does not mean the abandonment of national programs of assistance but rather their more effective coordination. At the same time, we shall try to assure a greater contribution to this common effort on the part of the European countries.

The broad lines I have described suggest the general directions of our policy. These policy goals have been and will continue to be pursued through a variety of instrumentalities and in a variety of forms. The veto of British accession to the EEC is not an insuperable obstacle to those policies. In 1954, the French Assembly turned down the European Defense Community Treaty, but the next few years were years of unprecedented progress towards European integration along other lines. The basic soundness of US policy was not affected.

44

So today we have sought to chart a course that corresponds to the requirements of United States interest-to pursue a positive line of policy rather than merely to react to, or to follow, the policies of other Governments. This seems to us the only posture befitting the leading nation of the Free World.

IV-51

EUROPEAN FREE TRADE ASSOCIATION MANDATE FOR A PROGRAM OF ACTION IN ALL FIELDS COVERED BY THE STOCKHOLM CONVENTION: Communiqué Issued at Geneva by the Ministerial Meeting of the EFTA Council, February 19, 1963 45

The Ministerial Council met in Geneva on 18th and 19th February under the Chairmanship of Mr. Corrêa de Oliveira, Portuguese Minister of State.

The Lord Privy Seal informed the Ministers of the circumstances in which the Members of the European Economic Community had been prevented from continuing the negotiation with the United Kingdom." Ministers took note of this and regretted the setback which this meant in achieving the economic integration of Europe. They reaffirmed their aim, as declared in the Preamble of the Stock

“See American Foreign Policy, 1950-1955: Basic Documents, pp. 1200–1201. EFTA Bulletin, vol. IV, No. 3, Mar. 1963, p. 4.

See ante, docs. IV-42-47 and infra.

holm Convention," of working together to promote the creation of a large unified European market which would be outward-looking towards the rest of the world. For the present, however, the Association's task must be to provide a further stimulus to trade by pursuing the dismantlement of barriers between the Members. This was important not only in the interest of creating a wide and flourishing market among themselves but also in order to provide a strong base from which to play their full part in the development of multilateral trade throughout the world.

Accordingly, the Ministers agreed on the broad lines of EFTA's future development. They instructed the permanent representatives to prepare a programme of action to be put into effect after consideration and decision by a further Ministerial meeting." This mandate extends to all the fields of action covered by the Stockholm Convention, and includes in particular the revision of the remainder of the timetable for tariff reductions providing for the more rapid dismantlement of tariffs with their final elimination during 1966. Similarly the mandate covers the arrangements relating to trade in agricultural goods and fishery products, and co-operation between Member States on economic and technical matters.

Desiring to contribute to the liberalisation of international trade, the EFTA countries will support all practical proposals designed to increase world trade. They will participate actively in the tariff negotiations which are due to take place within the framework of the GATT.

The EFTA Council will meet again at Ministerial level on 9th and 10th May in Lisbon."

IV-52

THE STATE OF NEGOTIATIONS WITH THE UNITED KINGDOM ON ACCESSION TO THE EUROPEAN ECONOMIC COMMUNITY: Report From the Commission of the EEC to the European Parliament, Brussels, February 26, 1963 (Excerpt)50

One feature of the negotiations with the United Kingdom which stands out when an endeavour is made to draw up an impartial review of their results is their remarkable complexity.

51

The number of problems raised, the novelty of some of them (Commonwealth, British agriculture, EFTA) and the need to reconcile two sets of commitments as vast as those of the United Kingdom and those of the Treaty of Rome 52 obviously posed extremely delicate problems for both the United Kingdom and the Community. It is of no small significance that the negotiations in fact bore mainly on the most precise stipulations of the Treaty or those establishing automatic commitments, namely the customs union in its various aspects, and the first tangible manifestations of a common policy in the sphere in which the Community had so far taken definite measures, i.e. agriculture, together with its repercussions.

It may therefore not be inappropriate to conclude this report with an attempt at certain more general assessments.

"Text in American Foreign Policy: Current Documents, 1960, pp. 335–351. 49 See post, doc. IV-53.

49 See ibid.

50

European Economic Community, Commission, Report to the European Parliament on the State of the Negotiations With the United Kingdom (Brussels, Publishing Services of the European Communities, publication 8082, Feb. 26, 1963), pp. 109-112. A resolution adopted by the European Parliament, Feb. 6, 1963, invited the Commission of the EEC to submit this report; text ibid., p. 5. 51 European Free Trade Association; for the text of the Convention of Jan. 4, 1960 establishing EFTA, see American Foreign Policy: Current Documents, 1960, pp. 335–351.

62 Text ibid., 1957, pp. 426-518.

53

The method adopted in the negotiations was to deal one after the other with the points which had been raised by the United Kingdom Delegation. Where this method has been used in this report, it may at times have obscured the relative significance of the problems raised, the particular aspect some of these problems had assumed by the time the negotiations were suspended, and the links or inter-relationships that often existed between them.

Moreover, all the agreements reached were approved subject to the reservation that they were provisional and would, of course, have to be confirmed in the final general agreement.

1. A useful starting point would be to establish the relative importance of the problems considered. The negotiations tended to place on the same level questions of widely varying impact.

A review of the negotiations should offer a more discerning appraisal. Many points left in abeyance may be classified as of minor consequence. In the tariff field in particular, the tactical manoeuvring inseparable from negotiations had certainly delayed in many cases the settlement of secondary problems for which there was no reason to believe that a solution could not be found. Broadly speaking it may be said that the normal provisions of the Treaty and the decision-making powers of Community institutions could certainly have been accepted as providing the means of reaching a reasonable solution of many points referred to in this report which stem from minor or quite special economic problems.

On the other hand, it is important not to minimize certain questions which were still unanswered (apart from the problem of relations with the EFTA countries, the terms of which were rather special). With regard to temperate foodstuffs from the Commonwealth, although a solution had been put forward for cereals, its extension to certain other products might still have raised difficulties, even though the broad lines were already laid down.

Again, even though some measure of agreement had been reached as to the final stage regarding British agriculture, it would be a mistake to underestimate the importance for the Community of effective transitional arrangements ensuring the progressive integration of the economies of the Member States and the final establishment of a single market.

The Six themselves were still not agreed on the interpretation of the financial regulation, which can be looked upon as a very important element in the system for agriculture.

2. In this context, it is not uninteresting to note that what was needed for a solution was in some cases mainly a move from the British Government, but that there were also cases in which the issue turned upon proposals to be drawn up by the Six themselves.

To take the example of zero duties," the United Kingdom Delegation had during the last meetings put forward a compromise proposal for one important product. But the negotiations had never officially touched on certain other products," which were among the most important, because the Six had not yet been able to reach a common standpoint on them which could accommodate the diverging interests of the Member States or take into account the differing importance they attributed to given cases. Here was a problem of considerable economic interest.

See ibid., 1961, pp. 521–527.

Reference to the proposal of Aug. 5, made by the Commission of the EEC at the 10th Ministerial Meeting of the member states of the EEC and the United Kingdom, Brussels, Aug. 1-5, 1963; see EEC Commission Report, op. cit., pp. 62-63.

Reference to a list of 26 industrial products for which the United Kingdom was not able to accept the rates laid down in the common customs tariff of the EEC, and for which it requested a zero duty in the common customs tariff; see ibid., pp. 21-29.

Reference to aluminum which the U.K. Representative (Heath) offered to remove from the zero duties list at the 16th Ministerial Meeting with the member states of the EEC, Brussels, Jan. 14–18, 1963; see ibid., p. 25.

Reference to lead, zinc, and aluminum; see pp. 23–28 of the source text.

Doc. IV-52

Although there was still a chance that British proposals for agriculture would be forthcoming which would have due regard for the criticisms or misgivings expressed by the Six, an overall view was still lacking because the Community had reached no decision on certain important products (dairy produce, beef, sugar and rice)."

Similarly, with regard to the financial regulation," the negotiations with Great Britain and particularly the views expressed at the outset on the British side had re-opened among the Six themselves difficulties of interpretation which they had not yet succeeded in overcoming when the negotiations were suspended." 3. This brings us to reflect in more general terms upon the real difficulties in the negotiations. The question was not only one of reconciling British systems and commitments with the letter of the Treaty of Rome; it was rather one of reconciling them with a Community in the full surge of development. The British application for membership involved an obligation to accept not only the Treaty but the substantial advances made since the Treaty was signed. It was on these advances that discussion was sometimes most difficult. But the fact that in certain fields the content of the Treaty was still in a preliminary stage, and that, broadly speaking, the implementation of its various aspects was in an intermediary phase, may also be considered as having made matters more difficult for the negotiators. The problem was one of reconciling with Community arrangements the action taken to adjust the British system whilst paying due heed both to Great Britain's vital interests and to a Community system which itself lay largely in the future.

The Commission endeavoured throughout to work for a solution of Great Britain's specific problems by taking a long view and making use of the time factor. In many cases the right solutions could only be solutions which anticipated the future progress of the Community, for example in procedural matters, and which had at the same time the effect of leading the enlarged Community, probably sooner than originally intended, to start working out common policies. The negotiations with the United Kingdom, because they brought these problems to the fore and in some cases considerably increased their scale, compelled the Community, then, to come to grips with them sooner than it otherwise would have done. This process brought with it greater awareness of the responsibilities an enlarged Community would bear in the world. Because of the United Kingdom's almost world-wide responsibilities, the questions raised by the United Kingdom Delegation also made it vital for the Community to define without delay the main policy lines of such a large and powerful Common Market with regard to matters which, once Britain was a member, would have had a direct and crucial impact on the overall balance of the free world.

IV-53

EUROPEAN FREE TRADE ASSOCIATION DECISION TO ELIMINATE TARIFFS ON INDUSTRIAL PRODUCTS BY DECEMBER 31, 1966: Communiqué Issued at Lisbon by the Ministerial Meeting of the EFTA Council, May 11, 1963 61

The Ministerial Council of the European Free Trade Association met in Lisbon on 9th, 10th and 11th May under the Chairmanship of Mr. Corrêa de Oliveira, Portuguese Minister of State.

58

See EEC Commission Report, op. cit., pp. 82-84 and post, doc. IV-67.

59 Reference to Regulation No. 25 on Financing the Common Agricultural Policy, adopted by the Council of the EEC, Apr. 4, 1962; text in Journal officiel des Communautés européennes, 5e année, No. 30, Apr. 20, 1962, pp. 991/62– 993/62.