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 EUROPEAN] 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.

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

1

79 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

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

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

'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.

expressed American understanding for the reasons why Finland follows a policy of neutrality. He stated the United States will scrupulously respect Finland's chosen course. President Kennedy emphasized that all nations must avoid interference in the affairs of Finland. President Kekkonen expressed his appreciation for the long-standing friendship between Finland and the United States, and for the understanding shown in the United States for Finland. Asserting that the purpose of Finland's foreign policy is to safeguard the security and independence of the nation, the Finnish President reaffirmed his country's intention to remain neutral while maintaining the confidence and friendship of all nations.

Presidents Kennedy and Kekkonen discussed recent world events. They agreed it was essential for both countries to support the United Nations as firmly as ever, since that body offers all men their greatest hope for achievement of the noble causes envisioned in the Charter.

2

Presidents Kennedy and Kekkonen discussed economic and cultural relations. The outlook for European economic development and the implications for other countries of possible enlargement of the European Common Market were reviewed. There was agreement between the presidents that current exchanges of students, teachers, leaders in various fields, and cultural and artistic presentations should be fostered. Exchanges of this nature were commended as a fundamental aid in developing understanding of each other's problems as well as consolidating existing friendship between the peoples of the United States and Finland.

Presidents Kennedy and Kekkonen expressed their mutual hopes that peace and justice would prevail in the world. All nations, large and small, have a grave responsibility toward civilization in that they must constantly search for a formula to bring true and universal peace, said the two presidents. Only a sustained effort in pursuit of this great objective, using all available human talents and resources of nations, can assure progress toward realization of this goal, one of man's oldest and most basic desires.

FRANCE

[NOTE: See also the subsections, "Algeria" and "Tunisia," in Section A, "North Africa," of Part VIII, "Africa."]

[ANNOUNCEMENT OF THE PRESIDENT'S "MODIFIED" STATE VISIT TO FRANCE, Read to Correspondents by the President's Press Secretary (Salinger), Palm Beach, Florida, April 3, 1961-Post, doc. 224]

* See ante, docs. 180–197.