195. EUROPEAN FREE TRADE ASSOCIATION ADDITIONAL ADVANCEMENT OF THE TIMETABLE FOR REDUCING AND ELIMINATING TARIFFS: Communiqué Issued at Geneva by the Ministerial Meeting of the Council of the EFTA, November 21, 1961 65

The EFTA Council met at Ministerial level in Geneva on the 20th and 21st November under the chairmanship of its Vice-Chairman, Mr. J. O. Krag, Danish Minister for Foreign Affairs. The Ministerial meeting was the first since the joint declaration of intention to take part in a single European market, issued at Geneva on 31st July."

Ministers took note of statements by Mr. Heath and Mr. Krag about the United Kingdom and Danish negotiations with the European Economic Community, and of the intention of the Austrian, Swiss and Swedish Governments to seek an appropriate form of Association with the Community. They also received reports on the positions of the Norwegian and Portuguese Governments."

Ministers expressed satisfaction with the steps taken or contemplated in this field and with the manner in which Member Governments were keeping each other informed. They will continue to consult on the action each Member State takes to implement the decision that each Member should seek an appropriate relationship with the European Economic Community.

Ministers decided that the next reduction in tariffs of 10% within EFTA, due according to the Stockholm Convention to take place on the 1st July 1963, should be advanced to 1962. This decision will be implemented by Denmark, Portugal, Sweden, Switzerland and the United Kingdom on the 1st March 1962, and by Austria and Norway not later than the 1st September 1962. The decision is subject to confirmation by the Danish Government.68

The next meeting of the Council at Ministerial level is expected to take place in Geneva in the second half of February 1962.

196. THE NEED FOR THE UNITED STATES TO BE IN A POSITION TO "NEGOTIATE" RATHER THAN "ASSOCIATE" WITH OR "JOIN" THE EUROPEAN ECONOMIC COMMUNITY: Reply Made by the President (Kennedy) to a Question Asked at a News Conference, November 29, 1961 (Excerpts) 69

I have not heard it proposed that the United States should become a member of the [European] Common Market or associated with the Common Market in the sense that the word is ordinarily used.

65

Text as printed in the EFTA Bulletin, vol. II, No. 12, Dec. 1961, p. 5.

66 Ante, doc. 187.

67

The proceedings of the meeting are summarized in the source text, pp. 5-6. This confirmation was notified to the Secretariat on 27th November. [Note in source text.] In connection with this paragraph of the communiqué the Secretary-General of the EFTA issued the following statement: "The fourth paragraph of the Communiqué records an important decision the Ministers took this morning. Acceleration has been a matter of discussion within EFTA for some months, and it has been decided on today for two main reasons. The first is that the Ministerial Council decided that there should be no slowing down in the impetus of the work in EFTA in creating its own integrated market. The second is that, in a situation when all members of EFTA are seeking, or [are] about to seek, arrangements with the E.E.C., with a view to taking part in a single European market, it behooves all members of EFTA to show that they are able to support all the tariff reductions to which the Community is committed." [Note in source text.]

The reply printed here is taken from p. 763 of Public Papers of the Presidents of the United States: John F. Kennedy, 1961.

What we are concerned about is that we have the power to negotiate with the Common Market to protect our export industry. Now, the Common Market will represent a tremendously important market for American production. It is one of our areas where we have concentrated most on in recent years. . . and represents a tremendous potential for us in the future, particularly when Great Britain joins it.... We want to, therefore, protect our export market.

We want to keep the ratio of exports to imports comparable to what it is today or perhaps even improve it, because, if we're not able to export substantially more than we import, we're going to either have to cut off all assistance to countries abroad or begin to withdraw our troops home.

We spend over $3 billion a year in keeping our bases and our troops abroad. That represents a $3 billion drain or potentially gold drain upon us. The only reason we've been able to afford that, of course, has been that we've had a balance of trade in our favor of around $5 billion.

Now, in addition, we are concerned that American companies who are locked out of the Common Market because of their high tariffs will feel that the only way that they can get into the market will be through investing in Western Europe, and, therefore, we will have capital leaving, which will cost jobs. Every time an American firm invests in Europe and builds its company there, it hires European workers and not American workers.

Now, we believe in the free flow of capital. We do not believe in capital exchange here. Therefore, we have to have the ability to negotiate with the Common Market so that American goods can enter the market and we will not have American capital jumping the wall in order to compete.

So that this is a matter of great importance to the American workers and industry and to the American economy, and it is. . . because of that reason, as well as our desire to associate as closely as we can to Europe, which is going to be such an important power and force, that we are considering what our trade program will be.

197. "THE E[UROPEAN] E[CONOMIC] C[OMMUNITY] WILL FALL SHORT IF IT MERELY TRANSFERS EUROPEAN PROTECTIONISM FROM THE NATIONAL TO THE CONTINENTAL LEVEL": Address by the President (Kennedy) Before the National Association of Manufacturers, New York City, December 6, 1961 (Excerpt) 70

This new "house of Europe" that we sought so long, under different administrations, is actually rising, and it means vast new changes in

70 White House press release; text as delivered (Department of State Bulletin, Dec. 25, 1961, pp. 1039–1047).

our outlook as well. With the accession of the United Kingdom and other European nations to the Common Market, they will have almost twice as many people as we do. It will cover nations whose economies have been growing twice as fast as ours, and it will represent an area with a purchasing power which some day will rival our own. It could be-it should be our most reliable and profitable customer. Its consumer demands are growing, particularly for the type of goods that we produce best, for American goods not previously sold and sometimes not even known in European markets today. It is an historic meeting of need and opportunity; at the very time that we urgently need to increase our exports, to protect our balance of payments, and to pay for our troops abroad, a vast new market is rising across the Atlantic.

If, however, the United States is to enjoy this opportunity, it must have the means to persuade the Common Market to reduce external tariffs to a level which permits our products to enter on a truly competitive basis. That is why a trade policy adequate to deal with a large number of small states is no longer adequate. For almost 30 years the Reciprocal Trade Agreements Act 1 has strengthened our foreign trade policy. But today the approaches and procedures provided for in that act are totally irrelevant to the problems and opportunities that we confront. Its vitality is gone-a fresh approach is essential-and the longer we postpone its replacement, the more painful that step will be when it finally happens.

For this is no longer a matter of local economic interests but of high national policy. We can no longer haggle over item-by-item reductions with our principal trading partners but must adjust our trading tools to keep pace with world trading patterns and the EEC [European Economic Community] cannot bargain effectively on an item-by-item basis.

I am proposing, in short, a new American trade initiative which will make it possible for the economic potential of these two great markets to be harnessed together in a team capable of pulling the full weight of our common military, economic, and political aspirations. And I do not underrate at all the difficulties that we will have in developing this initiative.

I am not proposing-nor is it either necessary or desirable-that we join the Common Market, alter our concepts of political sovereignty, establish a "rich man's" trading community, abandon our traditional most-favored-nation policy, create an Atlantic free-trade area, or impair in any way our close economic ties with Canada, Japan, and the rest of the free world. And this, of course, is a problem of the greatest importance to us also. We do not want Japan left out of this great market, or Latin America, which has depended so much on the European markets it may find it now increasingly difficult because of competition from Africa to sell in Europe-which could mean serious trouble for them and therefore for us in the long run, both political as well as economic.

"Of June 12, 1934; 48 Stat. 943.

I am not proposing-nor is it either necessary or desirable--that in setting new policies on imports we do away altogether with our traditional safeguards and institutions. I believe we can provide more meaningful concepts of injury and relief and far speedier proceedings. We can use tariffs to cushion adjustment instead of using them only to shut off competition. And the Federal Government can aid that process of adjustment through a program I shall discuss further tomorrow --not a welfare program, or a permanent subsidy, but a means of permitting the traditional American forces of adaptability and initiative to substitute progress for injury.

For, obviously, our imports will also increase-not as much as our exports, but they will increase. And we need those imports if other nations are to have the money to buy our exports and the incentive to lower their own tariff barriers. Because nobody is going to lower their barriers unless the United States makes a bargain with them which they feel to be in their own economic interest. We need those imports to give our consumers a wider choice of goods at competitive prices. We need those imports to give our industries and Defense Establishment the raw materials they require at prices they can afford-and to keep a healthy pressure on our own producers and workers to improve efficiency, develop better products, and avoid the inflation that could price us out of markets vital to our own prosperity.

Finally, let me make it clear that I am not proposing a unilateral lowering of our trade barriers. What I am proposing is a joint step on both sides of the Atlantic, aimed at benefiting not only the exporters of the countries concerned but the economies of all of the countries of the free world. Led by the two great Common Markets of the Atlantic, trade barriers in all the industrial nations must be brought down. Surely it will be said that the bold vision which produced the EEC will fall short if it merely transfers European protectionism from the national to the continental level.

C. The Intergovernmental Committee for European Migration

MIGRATION FROM EUROPE IN 1961: Report of the Adviser on Refugee and Migration Affairs (Warren), Department of State, on the Seventeenth Session of the Executive Committee and the Fourteenth Session of the Council of the ICEM, Geneva, May 3-17 and 11-17, 1961 1

72 In an address at Miami, Fla., before the AFL-CIO convention; text in the Department of State Bulletin, Dec. 25, 1961, pp. 1047–1052.

1 Department of State Bulletin, Oct. 2, 1961, pp. 565–569.

THE 1961-1962 PROGRAM FOR EUROPEAN MIGRATION: Report of the Adviser on Refugee and Migration Affairs (Warren), Department of State, on the Eighteenth Session of the Executive Committee and the Fifteenth Session of the Council of the ICEM, Geneva, October 16-20 and 23-27, 1961 2

D. The Problems of Germany and Berlin

[NOTE: Because, for 1961, the problems of Germany and Berlin constituted the most significant ones to which President Kennedy and Chairman Khrushchev addressed themselves at Vienna and the most significant ones in post-Vienna Soviet-American relations, the documents which would otherwise have been carried in this section (a feature of the 1956-1959 annual volumes) are printed in section C of Part VI, "The Soviet Union."]

E. Relations With Certain Countries of the Area

FINLAND

198. FINNISH-UNITED STATES EXCHANGE OF "VIEWS WITH REGARD TO CURRENT INTERNATIONAL DEVELOPMENTS": Joint Communiqué Issued at Washington by the President of the United States (Kennedy) and the President of Finland (Kekkonen), October 17, 1961 1

1

The President of Finland and Mrs. Urho K. Kekkonen were guests yesterday of President and Mrs. Kennedy at a White House luncheon. Following the luncheon the two presidents exchanged views with regard to current international developments.

President Kennedy paid tribute to the many common ties between Finland and the United States and the democratic ideals the two nations share. Regarding Finland's position on the world scene the American President took account of Finland's treaty commitments and

2

* Hectographed copies made by the Office of International Conferences, Department of State.

1 White House press release dated Oct. 17, 1961 (text as printed in the Department of State Bulletin, Nov. 6, 1961, p. 761). President Kekkonen made an official visit to the United States, Oct. 16-Nov. 2, 1961, staying in Washington, D.C., Oct. 16-18 and in New York City, Oct. 18-20, visiting thereafter, Westchester County, N.Y., the State of Conn., Detroit, Mich., Duluth, Minn., Los Angeles, Calif., and Honolulu, Hawaii.