Wednesday, April 21, 1976, Morning SUMMARY OF DISCUSSION SESSION I-QUESTION AND ANSWER PERIOD Questions from the European Parliament Delegation: U.S. TRADE ACT AND PROTECTIONISM 1. Within the Community there is a perceptible growing anxiety about the initiatives taken in the United States to restrict the import of a certain number of products from the European Community. The legal basis for these initiatives is to be found in the new Trade Act of 1974. In toto, the value of $4.5 billion of export products from the Community is at stake. The most important of these products, which the United States Government has been investigating, are cars (representing in itself the value of $2.5 billion), rolled steel, speciality steels and shoes. Are the Congressmen aware that between one-fifth and a quarter of the Community exports to the United States are covered by different actions of a protectionist origin at various procedural stages under the Trade Act of 1974, and do they not think that this represents a danger which can provoke a snowball effect within the trade relations between the United States and the Community in particular, and on a world level in general? Mr. Gibbons replied that the United States is not looking for a trade war and, in fact, favours a steady reduction of barriers. After the U.S. International Trade Commission made adverse findings on imports of shoes and speciality steel from the European Community, the President chose to use trade adjustment assistance rather than trade restrictions. He voiced disagreement with the ITC on European speciality steel but stated some concern that in the case of rolled and carbon steel, the European Community's value-added tax rebate amounted to a substantial export subsidiary. This matter was now in the U.S. courts since the President made no findings of an export subsidy. STABILIZED EXCHANGE RATES 2. What contribution could the United States make to the stabilisation of exchange rates in order to avoid, in particular, the risk of a series of competitive devaluations? Would the United States be prepared, in this regard, to take steps to put an end to the lack of symmetry which characterises the present situation in regard to intervention on exchange markets and which places the burden of these operations almost exclusively on European countries? Would the Americans be prepared, for example, to intervene by accepting debts in foreign currencies? Mr. Stanton replied that most of the U.S. Delegation agreed with the U.S. Government's support of the present system of floating exchange rates. He explained that although the Executive Branch consulted with concerned Members of Congress on International Monetary Policy that Congress' role is mainly that of oversight and review. AMERICAN POLICY ON ANGOLA 3. Secretary of State Kissinger has stated that: "The United States will not accept further Cuban military interventions abroad". He has referred to the Soviet-backed Cuban operations in Angola as an "unacceptable precedent", and he has also stated that: "We cannot permit the Soviet Union or its surrogates to become the world's policeman". What do the Congressmen consider should be done to prevent Soviet and Cuban intervention elsewhere in Africa? How do they consider that the USA and Western Europe should insist that the Cubans evacuate Angola? Mr. Vander Jagt noted that Secretary Kissinger had made very strong statements on these matters and urged that the European Community should join with the U.S. in protesting armed intervention. Mr. Martin identifying himself as part of the "hard-line minority" insisted that moral persuasion was ineffective and that the U.S. should provide arms to all who were willing to resist Communist aggression. Mr. Ryan declared that the three to one vote in the House of Representatives against U.S. assistance to anti-Communist factions in Angola expresses the desire of the American people to select carefully the places where the United States will intervene. Although the vote rejected intervention in Angola it does not necessarily mean rejection of U.S. intervention in other situations should they develop. In such situations the positions and actions of European allies would be very important to the U.S. position and actions. DEMOCRACY AND U.S. FOREIGN POLICY 4. Do members of the American Delegation consider that a very large part of the prestige and even of the strength of U.S. foreign policy has been, traditionally, based on democratic principles, and do they believe that this should also continue to be the case today and in the future? What are their reactions concerning U.S. foreign policy, in recent years, concerning the countries surrounding the Mediterranean basin? Mr. Fraser criticised U.S. failure to speak out and take action in support of democratic governments. If Secretary Kissinger wanted to advise France and Italy against Communist participation in their governments, that was a quite separate matter from speaking out in support of democratic governments and did nothing to remedy the poor U.S. record on that point. Mr. Bordu (France) insisted that if France and Italy wanted democratic change then that change must not be denied if the democratic process were to be maintained. He said that the Communists, who would soon participate in the French and Italian governments, had not challenged any existing alliances. In view of Secretary Kissinger's complimentary statements regarding Social Democrats, he asked whether or not there was some kind of anti-Communist alliance between the U.S. and European Social Democrats. Mr. Fraser replied there is no reason to believe any such alliance existed, but that Americans were concerned as to whether the recent changes in French Communist Party doctrine were changes of expediency or not. He noted that democratic freedoms had disappeared in countries where the Communist party was in control. Although the U.S. had criticized the French Communist Party it should be noted also that Moscow had criticized the French Communists. CHANGE THROUGH FREE ELECTIONS Mr. Corona (Italy) said that if the French and Italians wanted change they had the right to make changes through free elections. Mr. Faure (France) declared that the shared concept of liberty was the most important tie binding the Atlantic alliance together. The nonCommunist left in France wanted freedom and if the Communists were to break the commitment to freedom then the coalition of Communist and non-Communist left forces would collapse since liberty must be the foundation of the Atlantic alliance. Mr. Corterier (Germany) observed that the Communist Party. made its greatest gains in countries where the governments had not made enough social reforms. In West Germany, social reform had made Communist advances impossible. Mr. Pisoni (Italy) said that although the U.S. should judge whether or not a government was an acceptable ally, it might be counter productive for the U.S. to voice alarm at this early stage-in fact such statements of alarm could actually serve the purpose of the forces that the U.S. opposed. Questions from the American Delegation: DEVELOPMENT AID POLICIES 1. Does the Community believe that a closer coordination of U.S. and EEC development aid policies is possible, and, if so, by which mechanisms? Mr. Kavanagh (Ireland) recommended that at a future meeting a full session be devoted to this subject. The European Community would consider it useful to cooperate more closely with the U.S. on development aid policies. The European Community and the USA should elaborate common guidelines particularly in regard to raw materials, energy, industrialization, and trade and aid for the poorest countries. It is regrettable that the goal of 0.7 percent of GNP for development aid was still not achieved and that most industrialized countries were well below that mark. U.S.-E.C. coordination at the Seventh Special Session of the U.N. General Assembly was reasonably productive but there was no question that coordination should be made more effective. The U.S. and E.C. should set up groups of experts for this purpose at the Paris Conference and the UNCTAD Conference in Nairobi. 73-026-76- -2 U.S. COMPLAINT ON TRADE 2. While the Members of the U.S. Delegation are sensitive to the fears of Europeans about a new round of protectionism, it is difficult for some U.S. Members to work against restrictive tendencies, especially when the Community, in the agricultural field, seems itself to set a bad example. To illustrate, why did the Community promulgate regulations effective on 1 April, which will severely damage American oilseed producers, by requiring that all animal feed be mixed with 5 percent nonfat milk which the Community has in surplus. This means that there will be a 5 percent reduction in U.S. oilseed exports. Even though this regulation is effective for only seven months, does it not violate GATT, and is it not a bad example to U.S. interests also seeking protection? Mr. Vetrone (Italy) explained that the European Community was faced with the problem of reducing a one million two hundred ton surplus of skim milk powder. The objective was to reduce the stockpile not to restrict imports of American soybeans. In order to reduce the surplus, the European Community has required that animal feed produced in the EC must contain a 2 percent volume, not 5 percent of skim milk powder. The reduction of the stockpile, so the European Community hoped, would have a less negative effect on U.S. soybean sales than the imposition of levies. Mr. Normanton (United Kingdom) raised the question of the Concorde supersonic airliner and suggested that the U.S. attitude toward purchasing the plane represented a non-tariff barrier to trade. Mr. Ryan replied that in his Congressional District, which included the San Francisco International Airport, people had an intense feeling against the significant increase in noise level that they anticipated if the Concorde were allowed to land. Mr. Badillo added that the American Congressional resistance to the Concorde was not against trade with Europe since Congress several years ago rejected government support for manufacturing an SST in the U.S. GOVERNMENT ROLE IN INDUSTRY 3. The pattern in Europe is for a generally higher government role in ownership and management of basic industries than true of the United States. Does this factor not restrict the ability and the desire of European governments to regulate MNEs, for example, and in general to deal evenhandedly with other countries on restrictive trade practices when government owned industries are involved? Mr. Corterier (Germany) reported that the record showed that government ownership and management of basic industries was actually decreasing in the European Community. It now stood at about 8 percent of industrial production. Wednesday, April 21, 1976, Afternoon SUMMARY OF DISCUSSION SESSION II-DEVELOPMENT OF EAST-WEST RELATIONS (Working Documents: Mr. Jahn, Mr. Johnson and Mr. Karth) 1 1 Mr. Johnson and Mr. Karth from the U.S. Congress introduced their papers "Is Détente Dead?" and Mr. Jahn (Germany) from the European Parliament introduced his paper "The European Scene in the Year After Helsinki". Responding to the three papers on détente, Mr. Bordu (France) said that the changes now underway in the world were irreversable. The concept of the cold war is outdated for the present stage of world history. The arms race is a negative factor for solution of the problems of world peace and a diversion from social reform. The opposition of the two systems of government is an obstacle to the fulfillment of human needs and must be remedied by those who governed. The world needed détente now because of great new demands on the world economy and the democratic thrust in the world based on interdependence. The problem of interdependence must be dealt with because integration had not yet proven itself to be possible. ROLE OF FRENCH COMMUNISTS French Communists would defend freedom in the same way whether they were addressing Moscow or West Germany, for example. Helsinki showed amazing success by reaching agreement among a large number of very different countries. The ensuing policy of governments did not directly reflect the agreements signed but French Communists strongly favoured full implementation of the Helsinki Agreements. Peaceful coexistence was essential; if the balance of power was a determinant of peaceful coexistence, then balance of power policies must strive to avoid the use of force. Mr. Fraser saw little merit in discussion of the overall term "détente" as such, since each of the specific acts taken together by the U.S. and the USSR should be considered sperarately. Mr. Corterier (West Germany) observed that in Germany, there has been only minimal concentration on "détente" as a term. Aside from the nuclear area, the process called détente seemed to mean efforts to resolve certain specific problems in Europe, like Berlin. In order to continue the process, an equilibrium between East and West must be maintained. The equilibrium was now jeopardized by a variety of crises in the West, not necessarily caused by the Soviet Union-such as economic problems, Portugal, the Greece-Turkey conflict, and lack of 1 See pp. 9, 16, and 19, respectively. |