BILDERBERG MEETINGS
CANNES CONFERENCE
29-31 March 1963 (Participant list has been moved to a separate file)
INTRODUCTION
The twelfth Bilderberg Meeting was held on 29, 30 and 31 March 1963 at the Hotel Martinez, Cannes (France) under the chairmanship of H.R.H. the Prince of the Netherlands.
Participants numbered ninety and represented the United States, Canada and fifteen
European countries together with various international organizations. They were drawn from
among political leaders (members of governments and parliamentarians) and leading figures in
business, journalism, the civil service (national and international), the liberal professions and
trade-union organizations.
In accordance with the rules of procedure adopted at each meeting, all participants spoke on
an absolutely personal basis without committing any government or organization to which
they might belong. In order to facilitate complete frankness, the discussions were confidential
and no representatives of the press were admitted. A short press release in which the
Chairman's was the only name mentioned was distributed beforehand but no further release
was issued at the conclusion of the meeting.
Three items were included on the Agenda:
I - The balance of power in the light of recent international developments.
II - Trade relations between the U.S.A. and Europe in the light of
the negotiations for Britain's entry into the Common Market. III -
Trade relations between the Western world and the developing
countries (tariffs, quotas, commodity arrangements, etc.). Ad. I This
item will cover changes in power relations—political, economic and
military— between the Communist and Western countries and inside
each group.
On account of developments subsequent to the preparation of this agenda (particularly the
collapse of the Brussels negotiations between Britain and the E.E.C.) and the close connexion
between this fact and items I and II, the Chairman asked participants:
- in dealing with item I to give preference to the subject of the political and military
relations existing between the Western allies without thereby excluding certain current
economic-political problems which have arisen as a result of the failure of the Brussels
discussions;
- in dealing with item II, to concentrate on future prospects, more especially in regard
to the "Kennedy Round" and certain specific problems such as the co-ordination of
agricultural policies.
Since certain participants were absent when the meeting opened, item III was dealt with first
although various participants returned to this item during the last session. The original order of
the various items has been adhered to in the present text.
In accordance with another of the Bilderberg Meetings' rules, aimed at preserving the
confidential nature of the discussions, none of the participants is mentioned by name in the
present report.
I. THE BALANCE OF POWER IN THE LIGHT OF RECENT INTERNATIONAL
DEVELOPMENTS
In the course of a preliminary note, H.R.H. the Prince of the Netherlands had suggested that
participants should concentrate more particularly on a consideration of the following
questions:
-What impact will the growing strength of Europe have on the relations between the U.S.
and Europe in world affairs: competition, cooperation or partnership? What are the conditions
for a partnership?
-Is the idea of a multilateral or multinational nuclear force an answer to the troubles of the
Alliance? What exactly does it mean? How is the problem of the ultimate political control of
such a force to be solved?
What is the relevance of this concept to the current general disarray of the alliance?
Participants particularly qualified to discuss the matter were also asked to give their views
on the recent Franco-German treaty and on its role within the Common Market and the
Atlantic Alliance.
A written note had previously been drawn up by an Italian participant who referred to its
main lines of argument in addressing the meeting.
The failure of the Russian bluff over Cuba, wrote this participant, demonstrated,
a) that there is a balance; at an extremely high level of destruction, between the military
potential of the United States and the USSR;
b) that Khrushchev recognises this fact and that, whatever he may say in public, he is
prepared to accept the consequences of this balance. There was therefore reason to hope that
"peaceful co-existence", without open hostility, would continue for some time. This balance,
argued the author of the note, was entirely based on the American deterrent independently of
other national forces. At the same time, the conflict was continuing on the ideological level
and it would be ill-advised for the moment to hope too much from the Russo-Chinese
disagreements, however deep, all the more since the lack of unity within the Western world
was also real and serious. The most important question in this connexion was that of American
leadership. For his own part, the author of the note was in favour of accepting such leadership
unreservedly: it was, he wrote, a fact of existence, if only because America spends four times
as much on arms as all the other members of NATO combined. It followed that American
leadership, based on the only real deterrent force against the USSR, constituted NATO's
cornerstone, notwithstanding European recovery on the economic level. True, arrangements
could and should be found to render that leadership as little burdensome as possible but to
reject it purely and simply could only create a dangerous neutralism, especially if it took the
form of a sort of "anti-colonialism" directed at America.
The author went on to discuss the circumstances surrounding the recent breakdown of
negotiations between the United Kingdom and the E.E.C. and expressed his bitter regret
concerning them. The breakdown, he said, was a blow from which European integration might
never recover. True, the French rejection was delivered in accordance with the provisions of
the Rome Treaty which calls for unanimity among governments of the Community as regards
the admission of new members but it ran counter to the only line of action which would enable
genuine European union to develop, namely compromise between the wishes of the various
European countries, each being merely a part of a greater whole. The author of the note
considered that what was still more serious was the fact that, at his press conference, General
de Gaulle should have let it be understood that the choice was not between Paris and London
but between Paris and Washington, on whose behalf Great Britain would have played the role
of "Trojan Horse" within the Common Market. In actual fact, he wrote, on the basis of their
attachment to NATO and their acceptance of American leadership, Italy and the Benelux
countries might equally well be considered as "Trojan Horses".
The author of the note concluded by emphasising that the Soviet threat remained as real as
ever and that, given Khrushchev's skill in exploiting divisions within the Western camp,
complete unity was more than ever essential.
Discussions on this item of the agenda revealed that the meeting could generally adhere to
the concepts advanced by the author of the note in respect of the need to remain loyal to
NATO and to accept American superiority as a fact; considerable divergences of opinion
became apparent, however, in regard to the application of those postulates now and in the
future. A large number of speakers took up the criticism of the policy of the present French
government which seemed, directly or indirectly, to have inspired the note. One of the French
speakers observed that many of his compatriots, like himself, only partially supported General
de Gaulle's European and Atlantic policy and, more especially, the methods sometimes
employed by the President of the Republic. Nonetheless, in his view, it would be a mistake not
to avoid any reprisals or controversial statements likely to harm French national prestige. If
pressure were considered necessary, it should be applied in the form of understanding and
friendship. Other French speakers argued on similar lines. A British speaker wished to
dissociate himself from certain criticisms levelled at the General whom he considered a great
man, a great Frenchman and even a great European.
The persistence of the Soviet threat emphasised in the note was raised by several
participants during the discussion. A British speaker, supported by a German participant,
defined the policy of the USSR as follows:
-not to maintain the existing balance but to tip the scales in favour of the USSR;
-for this purpose, to exploit every opportunity provided by the West. Khrushchev had
merely recognised that this needed time. At the present time, moreover, given the fact that the
situation in Cuba, the Middle East and Africa, not to mention China, was not very favourable
from his point of view, his primary objective remained the Western countries: Berlin was still
Khrushchev's main concern, especially if one bore in mind his apprehension regarding the
possible provision of nuclear weapons to the Federal Republic. The German speaker did not a
priori include Cuba in the list of Russian defeats; it was rather that Khrushchev had wanted to
avoid full-scale conflict in an area where the military conditions were particularly
unfavourable from his point of view. At the present time Khrushchev considered Cuba as a
political bridgehead. In the German speaker's opinion, the danger still lay in Berlin.
The uneasy situation currently prevailing within the Atlantic Alliance was generally
recognised and a very large number of speakers sought to analyse the causes and the
symptoms on both sides of the Atlantic. What are the features of the Atlantic crisis? Several
participants attempted to define them and to recommend steps to eliminate them.
The main elements brought out in the course of the discussion may be listed as follows
although the same discussion revealed that they were closely interconnected :
-the failure of the Brussels negotiations,
-the doubts sometimes expressed in Europe as to the United States' determination to use
their nuclear deterrent in support of their allies in the event of war;
-the lack of balance between United States' nuclear power and the forces of its European
partners and, as a result, the problems arising from American leadership;
-the French determination to create an independent nuclear force and the resulting
apprehension that "dissemination" and even "proliferation" of nuclear weapons might take
place;
-the divergences between the allies as to the formulas whereby the NATO Treaty might be
improved, if necessary, more especially as regards the supreme control of nuclear weapons.
Although the breakdown of the negotiations for Great Britain's entry into the European
Economic Community which followed on General de Gaulle's press conference of 14 January
1963 was more specifically the subject of item II of the Agenda, several participants raised the
matter as early as this stage of the discussions in connexion with the uneasy situation within
the Atlantic Alliance. Recent happenings in Brussels had caused extremely sharp
disappointment in the United States and the point was emphasised by several American participants
who considered that the Atlantic Alliance had suffered a blow, all the more serious in
that it was inflicted by allies. Several of the American speakers observed that Europeans
perhaps failed to appreciate to the full the radical break in the United States' former traditions
which that country's adherence to NATO represented. That adherence had now been accepted
by all sectors of American public opinion (including those who were previously the most
traditionally isolationist, e.g. the farm voters of the Middle West) and support for the
organization had taken on an almost religious character which made any blow administered to
it all the more serious. There was a great desire to achieve real unity with Europe, including
Great Britain, via the Trade Expansion Act. There was a danger that the Brussels failure would
render that long-term policy illusory and the French decision struck the American public as a
refusal to recognise any entity superior to the nation or even to recognise a greater common
denominator. The American public saw this as a return to isolationism, a European cartelism,
and was profoundly disturbed.
While all the European speakers discussing the failure of the Brussels negotiations
recognised its harmful consequences for the Atlantic Alliance, there were some who showed
themselves anxious to reduce the question to narrower proportions. A French speaker, for
instance, considered that two problems had been confused:
-a political problem in that the original purpose in creating "the Europe of the Six" had been
to enable Germany to recover its place in the concert of nations without at the same time
recovering all the elements of national sovereignty so that transfer of these to a higher
community became necessary. At the time, this policy had been opposed both by the British as
a whole and by General de Gaulle's supporters;
- an economic problem arising at the Atlantic level and which should not therefore be
presented in terms of Great Britain's adherence to the Common Market. There was, in this
speaker's view, no contradiction between a politically integrated Europe—even limited to six
members—and an Atlantic world co-operating closely in the military and economic fields.
A Belgian participant described the 14th of January as the free world's ' 'black Monday"
and, more specifically, felt that the method adopted by the French government was
inadmissible because of its unilateral nature. Emphasising the community quality of the
Europe to be built, implying a spirit of solidarity which went beyond individual nations, this
speaker advanced the view that French diplomacy no longer believed in this concept and
preferred to confront its partners with a fait accompli.
But a French participant belonging to the government majority group replied that the
cessation of European construction dated back rather to 17 April 1962 when the "Fouchet
Plan" was rejected, a plan which represented an initial stage in that it provided for periodical
meetings between governments, a clearly-defined organization covering defence and foreign
and cultural policy which may have been modest but which could have been the embryo of a
greater organization. The French attitude in January 1963, said the speaker, was solely due to
the fact that it was impossible for Great Britain to accept all the conditions of the Rome
Treaty. The building of Europe meant accepting one's share of the responsibilities and
burdens.
Addressing the meeting again towards the close of the discussion, the Belgian speaker
emphasised that, as a supporter of an integrated Europe rather than of a simple alliance, he
considered British participation in the European institutions vital since French opposition
made the former formula impossible.
A British participant, supported by various other speakers, considered the Brussels
breakdown to be the result of a combination of factors rather than of the French Government's
attitude alone and that the responsibility should not be attributed exclusively to the President
of the Republic. With the support of other speakers in the subsequent discussions (see item II
of the agenda), he argued that it was above all essential to avoid any policy calculated to
hinder Great Britain's association with Europe when the time came. A number of American
participants considered the contention that their determination to intervene on behalf of their
allies was any less than in the past to be utterly without foundation. In particular, they stressed
the extent of American forces in Europe and the importance of their country's financial
contribution to joint defence. Nearly 400.000 American troops were stationed in Europe, some
of them accompanied by their families, and this demonstrated the permanent nature of their
commitment, although the North Atlantic Treaty had been "sold" to the American public
without any implication that American ground forces would be stationed in Europe under it. In
this respect, actions had outstripped commitments, just as the United States had already
intervened in two world wars without having previously committed itself to do so. The
American attitude had always been governed by long-term considerations without regard to
the circumstances of the moment. Similarly, on the financial level, military expenditure had
continued to be extremely heavy; at the present time, 60 cents out of every dollar of public
funds went to defence. Must the United States go bankrupt, asked one speaker, in order to
convince its European friends? Many U.S. congressmen would be only too happy to see
Europe take over the defence of Europe, if only to save the three billion dollars which it cost to
maintain American troops on the Continent. In fact, however, not one American congressman,
even though all would one day have to seek re-election, queried the commitments entered into
with America's allies. An American speaker also commented that continued European
suspicion of American promises might eventually bring about a swing in United States public
opinion which would have regrettable consequences.
A French participant, supported by a Belgian participant, a German speaker and a British
participant, condemned all and every display of suspicion concerning American determination
to remain in Europe: to question that determination, he said, almost amounted to clearing the
way for such an eventuality.
Another French speaker occupying an independent position observed, however, that
allowance must be made for strategic evolution which, within a few years, might deprive the
presence of American troops in Europe of any meaning, especially if the concept of "fortress
America" which was already suggested by the present development of Polaris and Minuteman
missiles were to become a reality. The Soviet Union might be tempted to confront the West
with challenges which it would seem irrational to answer with nuclear methods and many
Frenchmen, and even other Europeans, feared that the United States might consider a threat to
the Europeans as not necessarily a threat to itself. This did not signify suspicion. Within such a
context, English and French efforts might be seen as an attempt to find a sort of "European
parachute" to be used in the event that the Alliance did not immediately operate.
Another French participant, already mentioned, and an advocate of the national strike
force, denied that he had the slightest doubt as to the deter mination of the present
American presidential team. But was it always possible, he asked, to foresee the future?
And should not the confidence which the Americans sought be reciprocal?
The disproportion between the contribution of the United States to joint defence and that
made by its partners was likewise recognised by a British participant as a source of uneasiness
on the European side; such a disproportion could not continue indefinitely. This point was
expanded on by the French participant just referred to: when NATO was conceived, he pointed
out, the imbalance was in accordance with reality because of America's monopoly in the
atomic field—a field which, however, had nothing like the importance which it now
possessed. Since then, Europe had achieved a spectacular "recovery" and the feeling was
developing that the Alliance must be "rebalanced" and Europe strengthened in close cooperation
with America. But the United States wanted to maintain its monopoly, not only as
regards manufacture of nuclear weapons but also as regards the decisions concerning them.
America was especially apprehensive that it might be drawn into a conflict through error or
some rash action. Accordingly, said this speaker, everything proposed by America— a
multinational or even a multilateral force—seeks to convey the impression of a certain sharing
of responsibility while retaining the sovereign right "to press the button" and it was this
approach which France opposed. In addition, the speaker continued, it is not desirable that the
Alliance should seek to restrict the efforts of the Europeans to the "conventional" field by
allotting them, as it were, the role of "footsloggers". Finally, at the present time, the military
effort in the nuclear sector conditioned, so to speak, however regrettable this might be, the
development of an atomic industry—a field in which the lack of balance is also very
pronounced.
In reference to the United States' "over-kill capacity" which had previously been cited by a
German participant as the main element in preserving world peace, an American participant
emphasised that the best deterrent was the one which was "technically" capable of ensuring
victory and that it was vital to avoid under-estimating the capacity of the U.S.S.R., whether in
the nuclear or conventional field. In order to cover all objectives within the minimum space of
time, maximum capacity was essential. Arguing along similar lines, a Turkish participant
considered that this superiority constituted the best deterrent force available within the
Alliance and that, if this was a fact, it was erroneous to pretend that the United States thereby
imposed its will on its allies within NATO. This point was also taken up by a Belgian
participant who contended that if the Americans could be blamed for anything it was not
because they had not applied their leadership with sufficient consistency and force (criticism
of this leadership, a German participant observed, often reflected a Maurras-type nationalism)
since there was no example of the United States having sought within NATO to impose a
resolution with which the other member countries refused to associate themselves.
A British participant asked whether it was certain that Europe was ready to assume all its
responsibilities, more especially of a financial order, to establish a genuine balance with the
United States? At the present time, it would seem not.
Returning to the problem of the relation between nuclear forces and conventional forces in
NATO strategy which had been raised by a German participant, two speakers from that
country emphasised that "flexibility" in the choice of possible reprisals was essential. A
defence system which only had nuclear forces available would find itself in the position of a
policeman with nothing but a sub-machine gun to preserve order. It was up to the allied
powers to make their contribution in those complementary fields where inadequacies were
apparent. On the other hand, said one of these speakers, if we invest too much in conventional
arms (which is not the case at present in Europe) we run the risk of weakening the "credibility"
of our deterrent force.
While not denying that the Alliance was confronted with various problems, an American
participant contended that, on the basis of its practical operation, its balance-sheet was a
positive one and that substantial progress had been made since 1949. In discussing the
American nuclear monopoly, it should be remembered that this only applied to the possession
of such weapons. The speaker referred to the plans which had been drawn up to allow for the
use of nuclear and conventional weapons alike and pointed out that such plans had been made
by an integrated inter-allied team comprising virtually all member nations. Similarly, SHAPE,
an organization possessing a regional structure, received its orders from the "Standing Group"
which, in turn, was governed by the NATO "Military Committee" in which the political lines
were laid down by 15 nations. The military command merely applied these directives. The
plans, drawn up with great care in order to conform to those directives, were designed to meet
two primary considerations:
-to ensure adequate control, especially involving avoidance of premature use of atomic
weapons without orders from a higher level, this being a political element of key importance;-
to ensure, in the nuclearfield, an adequate and sufficiently rapid reprisal policy.
The danger of a proliferation of national nuclear weapons was raised by certain speakers in
connexion with the French government's decision to create an independent deterrent force.
A French participant, already mentioned several times and who set himself the task of
explaining the policy of the French government at this juncture, outiined and defended the
reasons underlying this decision. Apart from the considerations already mentioned above
(uncertainty as to the future, the American monopoly, the necessary development of a nuclear
industry), the French government considered that any nuclear force should be subject to a
political authority which, for the moment, is national in nature since only national States can
assume the crushing responsibility of using it. It might one day be possible to envisage a
supranational force but this was not a reality as of now. Nor did France wish to place its
defence (i.e., having regard to possible future developments, its whole destiny) in any other
hands but is own. In this respect, the French followed exactly the same reasoning as the
British. Why, asked the speaker, should something which was good for the British be bad for
the French? France, too, wished to be able to play a deterrent part. Another reason why a
nuclear force was necessary was that it enabled the smaller countries to "weigh more heavily
in the scales" as regards political and military affairs. It was impossible to speak of
dissemination in this connexion, said the speaker, since the French government could not, as
certain observations might have suggested, be compared to some sort of potentate or "Fuhrer"
threatening world peace. Such dissemination, moreover, had already begun and might progress
still further tomorrow without the United States being in a position to resist it. Furthermore,
the policy in question was one which had reached a point of no return and had already been
initiated by the leaders of the Fourth Republic.
The fact remained, said an American participant, that the proliferation of nuclear weapons
constituted a real danger since the possible launching of even one or two missiles could
unleash a nuclear holocaust. In this connexion, there was a tendency to think of nuclear
weapons as a mere extension of conventional weapons whereas the reprisals which the former
might provoke, could not be limited to a specific region but could immediately extend to the
whole Western world. This latter point was likewise emphasised by another American
participant.
A Netherlands participant stressed that the European countries could not wait and do
nothing but must take steps to promote the Atlantic partnership by strengthening Europe. But
how could action be taken if there was the permanent possibility of veto by a single nation?
The speaker insisted that Western defence could not be guaranteed by a juxtaposition of
national nuclear powers. The question was whether we were going to build an organization for
peace on national rivalry between sovereign states and therein lay the responsibility of our
generation.
A Belgian speaker, already quoted, regarded the French decision to acquire an independent
nuclear force as the real cause behind the breakdown of the Brussels negotiations (because of
the position adopted by Great Britain in the Bahamas) and expressed vigorous opposition to
that decision. The principles which had governed Western policy for fifteen years past were
being challenged and this seemed to be due to France's determination to possess an independent
nuclear force. What political hypothesis, he asked, was satisfied by the idea of a national
nuclear force? It was impossible any longer to imagine Russia launching an attack on
individual European countries. There could no longer be anything other than a world war in
which the United States would be involved on the first day, so that the fate of the world would
be decided primarily in Washington; individual national defence was no longer a possible
military position. On the other hand, said the speaker, the French force could not provide
France's allies in continental Europe with the guarantees offered by the United States
deterrent.
A British participant argued that the question was not whether France would have a nuclear
force or not but what that country would do with it. In the absence of increased consultation
within NATO, certain anxieties might develop. Again, while the dissemination of nuclear
weapons may have begun, that is not a reason for ceasing to oppose it, if only in order to
enable a genuine agreement on disarmament to be reached eventually. In this connexion, it
was noteworthy that the USSR had refrained from supplying nuclear weapons to its satellites.
A French participant observed that France wished its European allies to play the very role
which France herself refused to play vis-a-vis the United States. He considered, however, that
Britain, on its side, should become more "European".
Another French participant who did not wish to exclude the possibility of a revision of
NATO in an atmosphere of confidence, emphasised that the main danger of French nuclear
armament (apart from its effect on the country's economy and currency) 1 ay in the breach of
free world solidarity. Such solidarity must be maintained at all levels if we wanted to defend
Western civilization. A German and an Italian participant spoke along similar lines and
stressed the highly alarming nature of the present situation. The latter also expressed his
concern at a certain anti-Americanism, a certain desire for neutralism, certain notions of a
direct compromise with Russia which could be attributed to the President of the French
Republic. France's partners, said this speaker, must not be forced to choose between Paris and
Washington. During the discussion, speakers analysed at length the factors in the present crisis
but at the same time they sought solutions which would make it possible to face upto the
situation and bring about a smoother operation of the Atlantic Alliance. The problem of the
Alliance was set forth by a German participant as that of "national security through collective
defence" as opposed to "collective security through national defence". Efforts to achieve
integration should not only be continued but extended still further: in fact, NATO was only an
improved military coalition. It was paradoxical that we should have an integrated operational
command but, on the other hand, should not have such integration in the logistic sector. The
same applied to the manufacture of weapons where research, testing and production were
uselessly split up, this being equally harmful in regard to the quality and cost alike. The
speaker wondered how the desire to possess national nuclear forces could be explained: was it
a ques-tion of prestige or of a wish to wield more influence or of suspicion of the United
States—a suspicion which, in the speaker's view, was unjustified. After stressing Germany's
determination to hold aloof from national nuclear weapons, the same speaker expressed the
view that national sovereignty had become out-moded and that the concept of a "European
Third Force" was unrealistic. In actual fact, he said, two concepts present themselves:
-an Atlantic Community based on two elements, i.e. America, on the one hand, and, on the
other, Europe as the "second pillar"; this was a highly desirable formula but pre-supposed an
integrated Europe with a central authority controlling nuclear weapons—a situation which
required time to achieve;
-an integrated Atlantic society with common institutions. Here again, time was needed but
an effort must be made forthwith to achieve a common policy instead of merely issuing
communiques alluding to a "common denominator".
The French speaker already referred to as the defender of the French government's policies
cited the superiority of American power and the solidity of the Atlantic pact as factors
essential to the equilibrium of the international situation but he likewise cited the regional
nature of the Atlantic Pact and the fact that it concentrated too strictly on the military aspect as
examples of its present weaknesses. If confronted with global aggression, he argued, the
NATO powers must be able to devise a global strategy and similarly reach agreement on
questions outside the Alliance's regional framework, e.g. the Congo, New Guinea or the Near
East. Moreover, in order to obtain stronger support from public opinion, it would be desirable
for the Pact to concern itself with the economic and cultural fields as well. The same speaker
was opposed to the American nuclear monopoly and the lack of balance in the Alliance and
stressed that the French deterrent was not aimed at destroying the Pact nor at creating a
"European Third Force". Neither neutralism nor anti-Americanism was involved nor was
there any desire on the part of France to see a Europe independent of the Community. France
could only benefit from co-ordinating its action with that of its allies, more especially as
regards the distribution of strategic objectives and roles. On the other hand, France did not
wish to see its strength submerged in a denationalized entity and it was for this reason that
France did not support the concept of a multilateral force as suggested at Nassau, a force
which would be deprived of nuclear warheads, provision of which would depend on American
goodwill.
Replying to the previous speaker, an American
participant set out his country's aims as follows: -to
encourage a strong Europe and hence to encourage
its economic and political
integration;
-to create and strengthen arrangements facilitating increased Atlantic co-operation.
The nuclear defence of the West is indivisible: the defence of Europe is vital to the United
States, the defence of Europe depends on the American deterrent. Because of this, the United
States commitment was of a permanent nature, as demonstrated by the presence of thousands
of Americans based in Europe. Having expressed these convictions, the speaker went on to say
that it was necessary to take joint action to maintain the stability of our economies, to
strengthen our military potential and to increase our assistance to new nations, more especially
to keep them out of the grasp of the East. In discussing the difficult problem of the control of
atomic weapons, a difficulty arose which had already been mentioned by a German
participant: technology had gone so much further than had the traditional arrangements
between sovereign states that it was important to find new institutional methods for exercising
our power over the terrible weapons available to us. There were three possibilities in regard to
that power of control:
-leave things as they were, relying on the United States in the hope that the situation would
not change. This implied an increased dependence of the free world on the United States and
did not take account of the present British potential nor of the future French potential;
-let things follow their course, more especially as regards the French force and its influence
on the latent desire of certain other countries to possess their own nuclear force, with the
consequent danger of proliferation already mentioned; to consider NATO as an atomic power
in its own right and hence establish, at any rate among certain of its member countries, joint
possession of certain nuclear devices with power of decision being held on an equal footing.
The speaker considered this solution as the only one possible, given that Europe had not yet
reached a stage where it could speak with a single voice, and such was the line of the present
proposal for a multilateral force which represented an effort, however imperfect, to utilize
national potentials and enable all the countries concerned, even if they had no nuclear potential
of their own, to participate in their own defence in this field.
To make a choice in favour of a multilateral force was not, the speaker went on to say, an
easy matter since the objection to "several fingers on the trigger" still remained (and this
applied to an Atlantic and a European force alike, so long as the latter failed to delegate power
to one person) but that objection applied still more cogently to a juxtaposition of national
forces with "several fingers on several triggers" and a consequent increase in the dangers of an
"accident". Again, the creation of a multilateral force would enable the United States' partners
to share America's experience in the management of such a force and the speaker expressed
the hope that in these circumstances the various countries would not insist any longer on the
possession of a nuclear force.
A British participant analysed in similar terms the various possible formulas for emerging
from the present situation which he described as one dominated by "psycho-pathological"
elements: a critical lack of confidence on both sides of the Atlantic, a profound anxiety
resulting from the fact that the Soviet capacity to retaliate to an American atomic attack would
lessen the credibility of the American deterrent.
Three possibilities were open to us: -each ally to possess its own
nuclear force: such a formula, said the speaker, was irrational and
a cause of division within the Alliance;
-a multinational force from which each member could withdraw if need be. This solution
was likewise unacceptable since it involved discrimination in favour of those members of the
Alliance with a lead in the technical field which, the speaker reminded his audience, included
the means of delivery;
-a multilateral force but this would only be genuinely multilateral and retain all its
"credibility" if it excluded any possibility of a United States veto on its use. This would not be
easy in practice, if only because such a concession would involve the danger of increasing the
United States liabilities out of all proportion to its interest in the joint defence of Europe.
The best practical solution would therefore consist in giving the European members greater
say in the use of the deterrent by increasing their knowledge in this field and intensifying joint
consultation. To achieve this, said the speaker, institutional arrangements were not enough and
mutual confidence was a vital element. Interdependence must operate in both directions. A
Turkish participant devoted most of his statement to this psychological aspect of co-operation
between allies and expressed relative optimism. He suggested three approaches to prevent
current problems from becoming harmful to NATO:
-elimination of any factors contributing to the "dramatization" of these problems;
-making allowance for the pride and susceptibilities of all parties;
-ensuring as far as possible that the various problems do not influence each other.
As a number of other participants had already emphasised, it was certain that NATO must
evolve. There had already been a considerable degree of evolution since it was set up: Greece
and Turkey, followed by Germany, had joined its ranks. International problems which it was
once considered impossible even to touch on in the NATO Council were now the subject of
detailed examination. Much remained to be done and, in world affairs, members would have to
achieve a certain harmony if absolute solidarity proved impossible. In this connexion, it was
noteworthy that the machinery for consultation was gradually being perfected. In short,
repeated the speaker, NATO's shortcomings should not be dramatized by being represented as
utter incapacities.
This relative optimism was not shared by a Belgian participant, already quoted several
times, who recalled the recent American proposals to give a worldwide character to
consultation within NATO, to set up an atomic committee in NATO and, finally, to institute
multilateral, multinational or interallied nuclear forces. Such proposals, he contended, had
been received by Europe with hesitation and contradictory reactions. True, the proposals had
varied but the United States awaited a gesture from Europe indicating that there was a
readiness to accept them.
The European countries' great desire to be associated with nuclear strategy (a desire which
was met by the American proposal for a NATO force) and their anxiety to avoid being
excluded from research concerning atomic energy and delivery systems were entirely
legitimate but the methods of satisfying such aspirations should be discussed within the
framework of NATO and it was reasonable to fear that no such discussion would take place
until agreement was reached on the key principle of the indivisibility of free world defence.
And it was France's voice above all which was awaited in vain in the international institutions.
In a subsequent statement, the same speaker returned to the question of consultations within
NATO. Such consultation, he observed, was valueless when it merely consisted of one country
informing its allies of a decision which had already been taken—and doing so only a short
time before informing the public at large. What was important was to decide whether
consultation could or should lead to a joint decision. Views on this point varied. Was France
ready, asked the speaker, to accept a system allowing such decisions to be reached even when
it found itself in a minority? The speaker listed the following guiding lines: reaffirmation of
honest collaboration with the Anglo-Saxon-world and, in particular, America; the indivisible
nature of defence; discussion of different problems within NATO; loyalty to the Alliance and
the European Community as originally conceived.
A French participant who had occupied a high position in a previous French government
discussed the psychological and institutional aspects of the problems confronting the alliance,
problems of "growth" involved in adapting to new situations, sometimes complicated by the
inertia with which certain legitimate claims had long been received. In consequence,
governments must show imagination.
For example, it was normal that 200 million Europeans should wish to take part more
effectively in the direction of world affairs and that America's allies should wish to extend
their research and their activity in the nuclear field since the Atlantic Pact had never been
described as implying an American nuclear monopoly: France and England would never have
accepted such an arrangement. Atlantic institutions must accordingly be adapted to those
aspirations. Given the immense danger involved in the dissemination of atomic knowledge and
weapons, would not the United States, asked the speaker, show its leadership in discussing
with its allies ways of limiting that dissemination and of adapting national programmes to the
demands of the Alliance? In this connexion, the present proposal for a multilateral force gave
a certain impression of improvisation which was not reassuring. A serious and considered
analysis in these fields would dispel many anxieties and suspicions, even if no final solution
were immediately forthcoming. Naturally, an open-minded attitude on the part of the United
States in these fields should find its counterpart on the other side of the Atlantic: Europeans
should agree to carry a greater share of the joint burden, including assistance to development,
outside any form of "European nationalism" and not in such a way that the ambitions of any
country could be camouflaged under the European label.
It was for this reason, the speaker concluded, that the future of the Alliance required
European integration combined with sufficiently developed institutions so that the nuclear
powers of Europe would be, so to speak, trustees for the rest while the Alliance, instead of
being a treaty between the United States and fourteen of fifteen separate countries, would be a
treaty between the United States of America and the United States of Europe. The need for a
united Europe as the "second pillar" of the Atlantic Alliance, put forward by a German
speaker, was raised by several other speakers during the discussion. "Two keys are better than
five fingers", said a German participant in this connexion and the speaker emphasised the
importance of Great Britain and the Scandinavian countries adhering to Europe. An
opportunity for this to take place, said a British participant, was missed in January 1963 and
the creation of an adequate institutional framework was thereby prevented but perhaps a fresh
initiative might be launched although a French participant thought it would be preferable that
this be done by France's European partners rather than by the United States or Great Britain.
Any such initiative, said this speaker, should be aimed at an "equal association" between the
United States and Europe taking in the nuclear sector. If there was a determination on the
European side to make the necessary effort, more especially the financial effort, then the
climate in the American Congress would be more favourable to this idea. By way of corollary,
it would be up to the United States to waive its power of veto and up to France and the United
Kingdom to make the gesture of assigning their nuclear forces to Europe. Such a formula, the
speaker contended, would involve fewer problems than might be thought since, in the event of
nuclear attack, retaliation would be automatic and in the case of attack on a lesser scale there
would be time to consult, even if only very rapidly.
Another French participant suggested that additional consideration be given to the "time
factor" in examining formulas enabling NATO to be recast on the same basis as the economic
partnership at present contemplated, in the light of the possible evolution of defence
technology. It was essential to turn towards European structures of an original kind which
would simultaneously include a close harmony between Great Britain and France and an
association of the other countries which would assume a share of the joint financial burden but
also a share of the manufacturing activities, possibly those which were less specifically
nuclear.
A Belgian and an American participant spoke against the idea of a "directorate" of the three
nuclear powers—the United States, Great Britain and France —within NATO since, as the
former put it, the other European members of the Alliance could not accept such an
arrangement. The American speaker also argued that it was contrary to the spirit of the Rome
Treaty that a given country should appoint itself spokesman for Europe. In addition, said this
speaker, the funeral oration for the multilateral force had been delivered somewhat too
quickly. As regards the future, we must reserve judgement. We were in a period of
pragmatism, there was no perfect solution and we would have to rely on what we had to
achieve satisfactory arrangements. Referring to the lack of balance between the world role of
the United States and that of its allies, the same speaker likewise advanced the view that the
end of the colonial era would enable the European powers to forge new links, new
relationships, with certain young nations. Not only did the United States not hinder such a
trend, he asserted, but actively favoured it since that country desired neither to see dangerous
vacuums nor to wield world domination.
As requested by the Chairman, certain participants from the two countries concerned
discussed the recent Franco-German Treaty. According to a German speaker, that treaty
represented the final and fortunate conclusion of a long period of hostility. As such, it should
be welcomed by all members of NATO, all the more so since it could exercise a stabilizing
influence when certain divisions, such as those concerning Great Britain's entry into the Common
Market, had been overcome. A French speaker went further in replying to a compatriot
who had suggested that the treaty could not be applied in practice—a fact for which he was
grateful. According to the former, the treaty could be the beginning of a certain organization of
Europe, all the more acceptable in that it in no way hindered the possibility of subsequent
action, that it was not exclusive, that it did not set up a closed club, that it respected existing
alliances and left a measure of freedom to the contracting parties.
Another French speaker, however, even though he had worked for many years past in the
interests of a Franco-German rapprochement, expressed opposition to the treaty which he
regarded as the adoption on a bilateral level of the "Fouchet Plan" which France's partners had
rejected. Moreover, he said, the treaty introduced within Six-Power Europe a threat to smaller
countries, more specifically in that it provided for certain decisions to be reached between
Germany and France, thereby tampering with the operation of the Community.
Another German participant voiced his approval of the treaty's provisions so long as they
were applied within the framework of Atlantic and European solidarity. Any doubt in this
regard should be removed when the time came to ratify the treaty by including precise legal
references.
II. TRADE RELATIONS BETWEEN THE U.S.A. AND EUROPE IN THE LIGHT OF THE
NEGOTIATIONS FOR BRITAIN'S ENTRY INTO THE COMMON MARKET
In preparation for discussion of this item on the agenda, a note emanating from a British
source and presented in th
1
e form of a questionnaire had been distributed to participants, as
well as an American note which replied in part to this questionnaire.
The British note comprised six questions:
1. Will the United States Government go ahead with the Kennedy Round? What are the
obstacles to rapid advance
(a) in the U.S.?
(b) in Europe?
1 Will the United States administration reinstate the Douglas amendment? If not, does
this mean that the whole concept of abolishing tariffs on industrial products over a wide area is
to be dropped and the only proposal will be the reduction of tariffs over a period of years?
2 What reciprocity in the agricultural field does the United States expect from the
E.E.C.? What degree of freedom for entry of agricultural products does it regard as a precondition
of any reduction of industrial tariffs? If the E.E.C. makes a concession in this field,
will the United States pay for it by making additional reductions in the industrial field? Does
the United States consider that there is the slightest chance of France agreeing to a more
liberal import policy for agricultural products?
3 What happens if the E.E.C. adopts a wholly negative attitude? Does this mean that all
tariff reduction then comes to a halt or would the U.S. be prepared to go ahead on a tariff
reducing scheme with those countries that were prepared to co-operate?
4 In the meantime will United States tariff policy be on a basis that is consistent with the
general objective of reducing tariffs? We have had recent examples to the contrary in the cases
of a number of products and others are being threatened.
5 What effect has the breakdown of Brussels had on the U.S. attitude towards trade in
peaceful goods with the Soviet block?
The American note was primarily concerned with the failure of the Brussels
negotiations and indicated that this raised four main questions, concerning
respectively: -President Kennedy's willingness and ability to implement the Atlantic
trade partnership which was the aim of the Trade Expansion Act;
-the extent of European interest in liberalization of trade with the United States;
-trade in agricultural products, particularly those products
which are subject to the Community's variable import levy
system; -possible alternatives to an Atlantic trade partnership.
The note recalled that the United Kingdom's exclusion from the
European Community
rendered ineffective President Kennedy's authority under the Trade Expansion Act to cut
certain tariffs out completely.1 The only remaining possibility was a 50% reduction, a fact
which reduced the American Administration's negotiating possibilities and prospects. The
essential purpose of the Act was to achieve a genuine Atlantic trade partnership, thereby preventing
a division of the Western world into antagonistic blocs.
On this basis, the programme enjoyed broad national and congressional support. In present
circumstances, any substantial liberalization of trade with the European Community seemed to
Americans less valuable and less feasible. It followed that approaches would be more cautious
and matter-of-fact; additionally, the Administration would be less centrally concerned with the
Community and more interested in Great Britain, Canada and possibly Japan.
1. The Act provided for such a possibility in respect of industrial products where the exports of
theUnited States and the European Community combined accounted for 80% or more of total free
world exports.
There was evidence of a lack of interest on the part of the European Community in dramatic
tariff reductions. This might be explained by adjustments which had already taken place
between members of the Community and by reluctance to invite a new wave of competition
from powerful, aggressive American firms. There were also Europeans who saw such
reductions as a threat to European integration. The Community could therefore be expected to
approach the Kennedy Round with a certain reticence.
In the case of agricultural products, the chances of liberalization were even poorer. This was
the more serious because the Administration was under heavy domestic pressure in this field
and might be impelled to make concessions on this point a condition of any major reduction of
its industrial tariffs. The principle difficulty arose in connexion with commodities whose
prices were supported in the Community and hence involved a variable tariff known as an
import levy, designed to keep those prices higher than the world price. These support prices
would therefore be a critical factor and the Community had so far shown little disposition to
be flexible on this point.
Great Britain had expressed great interest in the Kennedy Round, all the more so since
Britain's exclusion from the Common Market had led that country to look for other export
opportunities. But the provisions of both the Trade Expansion Act and the GATT would
prohibit the United States from granting tariff concessions to Great Britain without also
applying them to the Community. Should negotiations with the Community prove
unproductive, the advantages of the Kennedy Round to Britain would be correspondingly
small.
These concerns had led certain circles to suggest that the United States should enter into a
preferential trade liberalization arrangement with Britain, other EFTA countries and Canada.
But such an arrangement would be illegal under the Trade Expansion Act —and would also
violate the GATT unless it took the form of a free trade area. Moreover, this formula would
further divide the Western Alliance and drive the Community towards protectionism.
Spokesmen for the Community had frequently stressed that it was open in nature. Only if the
Community were to turn decisively away from that policy would so radical a departure from
the policy of Atlantic trade partnership be justified. At the present time, a policy of partnership
was still the best, though its implementation had become more difficult.
In the course of the discussion, a number of speakers referred to the failure of the Brussels
negotiations in January 1963, a subject already touched on during the exchange of views
concerning the first item of the agenda. A Netherlands participant and a British speaker
emphasised the unexpectedness of that failure, the former quoting a passage from Professor
Hallstein's statement of 15 February ("The truth is that negotiations had entered a difficult
phase which required that the British should also make certain concessions but there was still a
reasonable chance of reaching agreement") while the latter speaker recalled the warm
welcome extended to Great Britain by the delegations of the Community countries during the
conversations and the assurances received from France by the British negotiators only a short
time before General de Gaulle's press conference. Several speakers sought to list the
conflicting viewpoints which finally caused or at any rate contributed to the breakdown. In this
connexion, a British speaker countered the argument advanced earlier by a French speaker,
according to which it was up to Great Britain to accept the Rome Treaty outright without
requiring any substantial alteration and that the reasons for the French government's attitude
should be looked for there and nowhere else. It must be admitted, said the British speaker, that
Great Britain's economic strength involved fundamental problems affecting the
Commonwealth, the European Free Trade Association, the United States and the Afro-Asian
world. Recognising these problems which were of a global nature and allowing for them in the
conditions of membership meant acceptance of an enormous expansion of the Common
Market which pre-supposed major changes in the balance of power and policy within the
Community itself and the consequences and sacrifices involved on both sides had likewise to
be accepted. On a more formal level, said the speaker, there were only a few pages of
principles embodied in the Rome Treaty, the bulk of which (especially in the annexed
protocols) consisted of waivers of those principles in order to satisfy the legitimate concerns of
one or another of the member countries. It was therefore equally possible to do likewise in
respect of Great Britain without violating the spirit of the Treaty.
A similar point of view was expressed by another British participant who outlined the
attitude adopted by the British government in the Brussels negotiations. He declined to admit
that the failure could be attributed to the British attitude and he pointed out that his country's
requests did not go beyond the provisions of the Treaty (article 237 of which provided for
negotiation on the conditions of membership for new members). On 14 January, agreement
had already been reached on a number of arrangements. It was the Commonwealth preference
system which was regarded by some as discriminatory but it was precisely by succeeding in
reconciling that consideration with the Rome Treaty's provisions concerning certain
underdeveloped countries that a move might have been made towards a satisfactory solution of
development problems at world level.
A French and a Netherlands speaker, both of whom favoured a satisfactory arrangement
with Great Britain, nonetheless emphasised the importance of leaving the principles embodied
in the Rome Treaty intact and, more especially, of continuing the integration process of which
that Treaty was a beginning.
A French participant recognised the world-wide nature of the problems raised by Great
Britain's entry (the monetary problem of the pound sterling, the problem of aid, the problem of
agricultural products) which the Community had not hitherto been able to deal with as a whole
and which it would not have been able to solve either if Great Britain had entered the Common
Market. He considered that the negotiations between the United Kingdom and the Community
represented a sort of bet that they would be solved, a bet made hazardous by the narrow
framework chosen. In actual fact, solutions could only be found in a broader context and the
question was therefore, having missed out one stage, to deal directly with the major
broadening process which we must all face in unison.
Several statements by American participants revealed the extent to which the Brussels
failure had interfered with Washington's plans to strengthen the Western world via economic
measures. An American participant emphasised how the United States government, in spite of
the protectionist forces in the country, had decided after prolonged hesitation on a liberal
policy, partly from conviction but also because it considered this essential in the struggle
against communism, in order to expand markets, assist underdeveloped countries and, finally,
in the interest of the United States. Another American speaker outlined the steps taken by his
government since the war in order to achieve close Atlantic co-operation: he cited the
Marshall Plan and the support given to European integration on a supranational basis and
covering the United Kingdom. Such a system would likewise protect the interests of the
smaller European countries and make co-operation with the United States possible on an equal
footing, the United States not being in a position to enter a system of unification such as was
planned for Europe. Finally, there would be no question of American "leadership", a term
which called up the notion of domination. The speaker remarked that the "Six" had made a
considerable contribution towards strengthening themselves individually and collectively but
that the attitude of the United Kingdom towards integration combined with that country's
exclusion from the Common Market as the result of the nationalistic ambitions of a single state
had precipitated the crisis, the European partner having defaulted. The speaker strongly
stressed his country's desire to see Western Europe eventually form a greater unit,
notwithstanding the present setbacks, a unit which alone could enable the problems discussed
to-day to be settled on the basis of a genuine partnership.
In this connexion, an American participant furnished a number of chronological indications
concerning the possible development of the Kennedy Round, making due allowance for the
provisions of the Trade Expansion Act. The President would first have to publish a list of
those articles concerning which he intended to negotiate. The Tariff Commission would have
six months following such publication in which to hear from all interested parties and to
determine the economic effect of the proposed reductions. Following this hearing, certain
articles might be struck off the original list. Since the initial publication of the articles should
occur towards 1 August 1963, negotiation in the strict sense of the word could not begin
before spring 1964. The same participant and other American speakers provided some
clarification concerning the aims pursued by the Government of the United States in initiating
the Kennedy Round. There was no question of the government seeking to impose its views, as
implied by certain newspapers which under estimated the negotiating capacity of the other
GATT members. It was not even a question of a discussion involving a "winner" and a "loser":
the aim was to open up greater trade possibilities within the context of long-term expansion. In
the same way, observed a French and an Italian participant, it would be a mistake to talk of
"successes" or "failures" in connexion with the difficulties which would inevitably arise.
Another American speaker, however, pointed out that consideration must be given to the
climate prevailing within the United States when the Trade Expansion Act entered into force.
The protectionist elements had declined and many businessmen had become extremely liberal
but there was still persistent unemployment, which might be structural, in certain areas. It
followed that a lowering of customs barriers which would increase that unemployment without
increasing exports would be badly received. If, in addition, a foreign government were to
adopt public positions of a somewhat arbitrary nature towards American proposals, not only
would the task confronting Mr. Herter, the negotiator appointed by the President, which was
already crushing, be made even heavier, but the protectionist faction in Congress might even
bring about amendments to the Act. A British participant alluded to a certain bitterness in his
country following on events in Brussels which had occasioned an increase in nationalism
calculated to have an unfavourable influence on his country's position vis-a-vis the
negotiations contemplated by President Kennedy.
Among the specific problems raised by the Kennedy Round and the E.E.C. policy, a number
of speakers referred to the question of agricultural products and all of them recognized that it
was of a particularly delicate nature.
Particular attention was paid to the insistence—which, according to the press, was the
responsibility of the French government—on making arrangements concerning the
Community's agricultural policy before any negotiation took place within the framework of
the Kennedy Round. Some speakers regretted the absolute nature of this requirement but a
Netherlands participant considered that the attitude was not illogical so long as it did not
conceal a wish for protectionism or resistance to progress. A British participant argued that
it would be regrettable if the arrangements to be made in this sector should assume a
restrictive aspect because of the vast needs to be satisfied in the underdeveloped countries
where malnutrition prevailed but it was nonetheless true, said a French speaker, that we
were at present confronted with a limited number of financially solvent outlets. An
international participant reminded the meeting that GATT had so far been virtually unable
to do anything to free trade in connexion with agricultural products because the national
governments possessed a whole arsenal of protectionist measures. For its part, the United
States insisted that agricultural products be included in the Kennedy Round since
negotiation on industrial goods alone involved the risk of a lack of compensatory
concessions, more especially from the viewpoint of American farmers.
Since, however, the problems involved were so acute, a number of speakers felt that
negotiation merely aimed at further freeing of trade would be unable to furnish a solution.
What was needed was to achieve a genuine joint policy in this field centered not only on
agricultural prices as such but also and above all on the production levels considered desirable.
In this connexion, a French participant, supported by another French speaker, recommended
that the steps taken at the national level to implement this policy should seek to improve the
prospects of the agriculturalists concerned (individual assistance) rather than maintain an
artificial production level at all costs. Another French participant commented that the policies
so far followed by the various governments were distinguished by a certain contempt for
economic laws which was not unconnected with the extensive disarray to be observed at the
present time, e.g. the agriculturalist's right to produce things which nobody wanted— if the
demand was lacking, the price was raised! The adoption of a joint policy at Atlantic level
might offer a means of reversing this trend.
Agricultural policy, although not that policy alone, raised the question of whether the
Community intended to follow a protectionist policy withdrawn in itself or, on the contrary, a
policy open to the outside world. Such "openess" was strongly queried by a British participant
already quoted who took the view that, in the present context, a protectionist minority,
represented by the French government, exercised a right of veto against a more liberal
majority. This veto, said the speaker, might be taken far enough to result in the failure of the
Kennedy Round and this would mean either the collapse of the Community or the terrible need
for the other countries to seek a change in the GATT provisions whereby they could grant
reciprocal concessions without benefit to the Community. The question of whether we were
moving towards a continental Europe or whether Europe genuinely aspired to partnership with
America was raised by a Netherlands speaker and a senior international civil servant who,
without thereby denying that difficulties might well arise on the European side, emphasised
that it was equally up to the United States to effect a considerable revision of certain
regulations at present governing its trade policy and which were not related to tariffs and
quotas strictly speaking. In this regard, an American participant stressed that his country was
prepared to study equally the thorny problem of "non-tariff barriers". But the important thing
was that these should be clearly identified; similar barriers likewise existed on the EEC side.
This question might initially be dealt with, among others, by the preparatory inter-ministerial
meeting planned within the framework of GATT for May 1963.
Due allowance should also be made for certain inequalities in the relative opportunities for
industrial producers on either side of the Atlantic. Three of these barriers were particularly
stressed by a French participant, supported by another French speaker, namely:
-The greater size of American firms capable of giving them a greater trading strength than
that of their European competitors. It was true that mergers and regroupings took place within
the Common Market but some time was still needed before genuine balance would exist in this
connexion.
-The exceptional assistance provided to certain advanced American industries (e.g. in the
realm of space research) by the massive orders placed by the United States government,
whereas there was no corresponding support for the same industries in Europe. This point was
also made by a Belgian participant.
-The unevenness of American tariffs, some of which reached extremely high rates, much
higher than those of the Common Market. This was the cause of the demand for a lowering of
the level of such tariffs before negotiations began on equality of reductions to be granted by
both sides.
In this regard, a Belgian participant suggested that recourse be had to certain techniques
already employed by OEEC which aimed at avoiding purely national protective clauses or, at
any rate, that certain rules be created to govern their application, on the recommendation of
special committees set up for the purpose. Even if the Kennedy Round succeeded, it was
important not to rest content with that since, as the French speaker had emphasised,
protectionism could re-emerge in a thousand forms. Whether in connexion with agricultural
questions, non-tariff barriers or any other problem, the negotiation of the Kennedy Round
would be facilitated if it were possible for the European Community "to speak with one
voice". The Rome Treaty provided that up to 1 January 1966 decisions concerning the trade
treaties must be reached unanimously by the six contracting parties. After that date, which
marked the end of the transition period, a specific majority would be sufficient. Considerable
interest was therefore aroused by the suggestion of an international participant that the date
should be brought forward to 1 January 1965, the year 1964 being devoted to a technical
survey of the various elements involved in the negotiations. Possibly, this participant
suggested, a "counterpart" acceptable to the governments of the "Six" could be provided in
return for such a speeding-up, namely an undertaking to reach agreement on a joint
agricultural policy prior to the same date.
The effect of the Kennedy Round on the economy of underdeveloped countries was raised
by several speakers (the general problems in such countries being discussed within the context
of item III), all of whom emphasised that the arrangements to be made should not hinder those
countries' export capacity. An Italian speaker suggested that there should be a "co-ordination
of deficits" among the Western countries vis-a-vis the underdeveloped countries so that, while
avoiding any form of monetary nationalism, there could be a fair distribution of the sacrifices
made necessary in opening wider markets to their products.
Two Canadian participants provided several indications concerning their country's position.
The breakdown of the Brussels discussions did not directly affect Canada, given the
apprehension aroused in that country by the prospect of Great Britain's entry into the Common
Market. The failure might, however, be considered regrettable if it marked the end of a
liberalization process to which Canada had, as it were, adhered in advance in that its industry
was already subject to United States competition without tariff protection. In this connexion,
the success of the Trade Expansion Act could be considered advantageous if it led to an
expansion of world trade in which Canada had a substantial share.
One of these participants likewise raised the question of East-West trade. He favoured a
certain flexibility in this field since the contacts resulting from such trade might prove
profitable to the Western cause.
A Swiss participant stressed both the importance and the limitations of the Kennedy Round
by putting it in the context of the economic progress accomplished since the war—more
precisely since the Havana Conference—which had led to increased interdependence of the
Western economies. Paradoxically, that success might have played a part in the difficulties
now hindering further advance. But the impetus already acquired should be maintained and,
specifically, failure of the Kennedy Round would inevitably involve a weakening of GATT.
At the same time, it must be borne in mind that the success of the Trade Expansion Act would
not replace expansion of the Common Market; the European Free Trade Association could
continue to play a useful role to the extent that it did not constitute a rival bloc to the
Community.
A participant from an international organization pointed out that it must also be remembered
that low tariffs, while important, were not enough by themselves to bring about economic
expansion. National policies were more important, especially in the promotion of orderly
development. Co-ordination of those policies and mutual assistance measures (especially in
respect of fluctuations in the balance of payments, a point also discussed by a British
participant) were therefore essential. In this connexion, the West already possessed an
admirable instrument in OECD.
In the course of the discussion, a number of speakers dwelt on the global nature of the
problems requiring solution, the approaches to be adopted and the goals to be reached as
well as on the importance of the attitude taken by the general public towards the new
choices to be made.
As a British participant emphasised, it was a question of improving the trade structure
throughout the whole free world. It was essential, therefore, as of now, that the European
Community, Great Britain and the United States should avoid any steps calculated to
endanger subsequent negotiations. It was essential to combat any signs of protectionism
which were often the economic reflection of a rebirth of nationalism. This attitude should
take concrete form, suggested a Netherlands participant, through the adoption of a joint code
of good behaviour in regard to international trade which would formally reject subsidies,
dumping, cartels, etc. Moreover, as a French, an Italian and a Netherlands participant
emphasised, joint lines of action should be laid down, whether it was a question of
agricultural products, assistance to underdeveloped countries, financial conditions ensuring a
balanced expansion or a number of other fields.
Another English speaker stated that he agreed unreservedly with the solutions
recommended by his compatriot but he pointed out that, in order to reach the goals set,
adequate impetus was required and bilateral discussions must take place with the members
of the Common Market in order to reach a final multilateral arrangement with its members.
That was what the British government sought but it was obviously up to the members of the
Common Market to decide.
All this implied, however, not only new institutions and a new distribution of the burden but
also perhaps a new outlook, a new way of thinking in terms of association, in short a profound
alteration in men's minds. Such a change could not take place overnight and this was likewise
stressed by a number of other participants who, on the whole, showed cautious optimism
concerning the future. There would certainly be several "rounds", sometimes involving sharp
discussions, before final success was achieved. The essential thing was to overcome present
bitterness, however legitimate, and not to represent the difficulties which would inevitably
arise as so many final failures.
III. TRADE RELATIONS BETWEEN THE WESTERN WORLD AND THE DEVELOPING
COUNTRIES (TARIFFS, QUOTAS, COMMODITY ARRANGEMENTS,
ETC.)
Prior to discussion of this point, all participants had received a questionnaire specially
drawn up for the meeting by an Indian rapporteur, as well as a note prepared by a German
participant on the basis of this questionnaire.
The Indian questionnaire comprised the following main headings and questions:
A. THE IMPORTANCE OF ECONOMIC DEVELOPMENT IN THE LESS-DEVELOPED COUNT
RIES TO THE MAINTENANCE OF HIGH LEVELS OF ECONOMIC ACTIVITY IN THE
INDUSTRIALIZED COUNTRIES.
1) What are the categories of goods on which the increase in developing
countries' import requirements will be concentrated? 2) What
repercussions is this increase in requirements likely to have on industrial
production in the highly industrialized countries?
B. HOW CAN LESS-DEVELOPED COUNTRIES BE ASSISTED TO MEET THEIR IMPORT
REQUIREMENTS?
Through what means can less-developed countries be helped to finance these growing
requirements? What role should be assigned:
a) to an increase in earnings of the less-developed countries from their exports?
b) to long-term financial assistance or credits?
c) to private foreign investment?
d) to outright transfers and grants?
C. THE ROLE OF LARGER EXPORTS FROM LESS-DEVELOPED COUNTRIES TO IN
DUSTRIALIZED COUNTRIES.
1) What can be done to arrest the trend towards a decline in commodity prices?
2) What can be done to enable less-developed countries to expand the vol