Washington, 23-25 July 1962
Secret
The discussions revealed that the Americans have adopted positions of significance to us in two major respects:
(a) They have specifically recognised that they stand to derive advantages, not compensated by balancing concessions on their part, from such elimination of preferences in the United Kingdom as will follow the accession of Britain to the EEC. Further, they accept that this represents ‘valuable consideration’ in tariff negotiations or commodity discussions. They recognise that there is some obligation on them to make payment for unrequited concessions accruing to them.
(b) Whilst they have not, of course, shifted in their doctrinal objections to anything which smacks of the perpetuation of preferences, they have pretty faithfully conformed to the understanding reached in the Prime Minister’s visit1 that they would look at the situation on commodities of significance to them and to us pragmatically and not doctrinally.
Their present position basically reflects the above two points. On items in which they as well as we have significant interests they have sought to ‘tailor’ their thinking to take into account, as far as their self-interest allows, our interests. On commodities of concern to us, but not directly of concern to them, they are to a perhaps a surprising extent prepared to ‘tolerate’ (in the sense of not actively opposing) arrangements which we might be able to conclude on our own initiative and which, from a doctrinal point of view, are objectionable to them. With respect to the latter point, of course, they have not contracted out of what they regard as their ‘honest broker’ role in seeing fair play for third countries, and particularly the lesser developed countries, but have made it plain that within limits they do not wish to be their brothers’ keeper.
As will be apparent from the observations below, the proposals which they are contemplating putting forward to the principals to the Brussels negotiations and which they will support, whilst representing what I believe is a genuine effort on their part to help our cause, are very much proposals which, if achieved, would on balance promote their own self-interest and certainly not cut across their self-interest. In most cases, where they would promote their self-interest, they are proposals which the United States could not reasonably expect to gain if she were to seek to achieve them in a purely bilateral US/EEC negotiating forum. The US undoubtedly sees the approaching situation in Brussels (where in their view there is a ‘negative commitment to succeed’) as giving them an important and substantial negotiating lever, since an offer to ‘buy’ concessions on, for example, a common external tariff rate, is likely to have considerably greater chance of success if it can at the same time be represented as a means of ‘fixing up’ a Commonwealth problem and thereby removing one of the impediments, or at least potential sticking points to Britain’s entry. Her reasoning is that unless she is able to represent her proposals as meeting our problems, and represent solutions as being acceptable both to us and to the Americans, both of us have far less chance of succeeding in getting what we both want in our own self-interests. She is trying to be helpful to herself and to us to the extent that her own interests will either be positively served or at least not disserviced.
What this adds up to is that the American proposals (and this applies particularly to the CET items), although representing what the United States might be expected to seek anyway, can really be looked upon as perhaps supplementary measures which would help us. Or, in other words, what they are saying is that, if what they propose would be tolerable for us, they would endeavour to use their bargaining strength to get it, and that in their judgement there would be some chance of this if they were able to throw into the ring not only payment in the ordinary tariff bargaining sense (which they are prepared to make), but the additional and substantial bargaining point that the Community would, if it accepts America’s proposals, not have to worry further about fixing up Commonwealth interests on the particular item.
If the Americans are to move, with or without our blessing, time is obviously of the essence. The tasks of the Australian officers were to do no more than probe their thinking, test their expectation of success in their various proposals, underline the points of difficulty which would be presented for us if we were to agree to have substituted (or accept) for our present proposals the American approach on individual items, and try to test the weight of endeavour they would in fact be putting behind their support and their proposals, and the likelihood, they felt, of success attending their efforts. They are anxious to get our reactions by early next week because in their view (and ours) this appears to be as long as the matter can be left if their proposals and support can be effectively initiated.
In our discussions they placed some stress on the fact that some of their proposals (i.e. assurances that they would pay for certain tariff commitments) involved what amounted to undertakings to do things for which they would not have any authority until their trade legislation became law. Apart from other considerations this is, of course, a reason why no publicity can be given to any activities the Americans might undertake with or without our blessing.
The specific proposals and the considerations which these raise are best dealt with by examining CET and CAP items separately.
1 Document 186.
[NAA: A1209, 61/1203 PART I]