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May 30, 1975 - Ford, Kissinger, European Community Officials
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1553098
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May 30, 1975 - Ford, Kissinger, European Community Officials
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Memoranda of Conversations (Nixon and Ford Administrations)
Ford Administration Memoranda of Conversations
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File scanned from the National Security Adviser's Memoranda of Conversation Collection at the Gerald R. Ford Presidential Library
a
MEMORANDUM
THE WHITE HOUSE
WASHINGTON
SECRET/NODIS
MEMORANDUM OF CONVERSATION
PARTICIPANTS:
Francis-Xavier Ortoli, President, EC Commission
Sir Christopher John Soames, Vice President
for External Relations, EC Commission
Edmund Wellenstein, Director General for
External Relations
Philippe de Margerie, Chief de Cabinet
The President
Henry A. Kissinger, Secretary of State
Joseph Greenwald, U.S. Representative to the EC
Arthur Hartman, Assistant Secretary of State for
European Affairs
A. Denis Clift, Senior Staff Member, National
Security Council en
Jose de Sebra, Department of State Interpreter
DATE AND TIME:
May 30, 1975
5:58 - 6:35 p.m.
PLACE:
Ambassador Firestone's Residence
Brussels, Belgium
SUBJECT:
President's Meeting with EC Commission President
DECLASSIFIED
NSC MEMO, 11/24/98, STATE DEPT. GUIDELINES w3/9/04
Ortoli
Ortoli: I will speak in English, perhaps switching to French if some
explanation is needed. First, Mr. President, I want to say how very pleased
NARA. DATE 5/19/04
Sir Christopher Soames and I are to have this meeting with you. We believe
it is very important. We think that US-European relations are better now
than they have been for sometime -- particularly when we are working
together on economic matters.
E.O. 12958, SEC. 3.5
The Commission I head is a curious animal with responsibilities to propose
policy to the Ministers of the Community countries, to negotiate, and to
implement policy once the community decisions have been taken. Our main
responsibilities are in the trade field, and we had talks last week with
FORD
TOP SECRET- - XGDS (3)
SECRET/NODIS
GERALD
LIBRARY
CLASSIFIED BY: HENRY A. KISSINGER
BY
SECRET/NODIS
- 2 -
Mr. Dent and, today, with Mr. Robinson. Of course we also have important
responsibilities in the economic and monetary field, and we have major
responsibilities in agriculture, both internal to the Community and ext ernal
policy. Our external activities now are essentially with the Socialist and the
developing countries. In the agricultural field, the policy of the Community
-- the Community as such -- sometimes presses the policies of the member
states.
Our relations with the United States are very good now.
Kissinger: I heard the word: "Now" (laughter). Mr. President, I just
want Ortoli to know that these nuances don't go unnoticed.
Ortoli: There are some problems on which we disagree: I would like very
briefly to review our current problems.
President: Please. Go ahead.
Ortoli: The energy and raw materials. We met last week. We are trying
to organize to achieve common policy. We are also working with the United
States in the International Energy Agency.
President: Yes, and the work seems to be going very well.
Ortoli: In raw materials, our policy is sometimes in agreement with what
Mr. Kissinger proposed in Kansas City -- yes, similar to Mr. Kissinger's
proposal -- but in some things we go further.
Kissinger: You say you go further?
Ortoli: Yes.
Kissinger: Our Treasury Department would faint if we tried to go any
further.
Ortoli: Yes, we have to cope with that problem here, too.
President: We have a few points of difference in the United States as we
discovered in our review last week. I am pleased to know that we are
not the only ones with troubles.
SECRET/NODIS
SECRET/NODIS
- 3 -
Ortoli: As you know, we have developed a system in the convention on
stabilization of raw materials
Kissinger: I wanted to put a favorable reference into my speech, but
Treasury said no.
Ortoli:
we got agreement from the member states.
Soames: This is something we should take up on a world basis. Either
you can take a broad front of countries on a narrow front of problems --
for example, on agriculture -- or we can work with a narrow front of
countries on a broad front of problems.
Kissinger: What you can't do is to do nothing.
President: How far along are you?
Soames: We already have an understanding with the Africans.
Ortoli: Yes, 46 countries. We are now proposing to proceed with a similar
understanding -- a similar system -- for the whole world. We will be working
to table this by the 11th of June.
Soames: The idea is not to hold up the price of raw materials artificially
but rather a system of guarantees, to guarantee that the poorest countries
will have a certain level of receipts
you would take it up at the end
of the year.
Kissinger: It would be a substitute for aid.
Greenwald: Yes, basically it would be program aid.
Ortoli: We will be having more contacts to explain the concepts further.
Soames: It's not enough to say indexation. Indexation is nonsense.
President: It sounds like our old farm subsidy program.
Kissinger: It's a payment one makes one way or another anyway you look at
it. If you make it aid, they'll raise raw materials prices anyway.
SECRET/NODIS
LIBRARY
SECRET/NODIS
- 4 -
President: Under this system, you would add up your receipts.
Soames: It's important to note, as we did in our talks with Robinson today,
that while we should be agreeing on the objectives, we shouldn't be coming
out with the same ideas and same positions. We shouldn't look as if we're
ganging up on them.
Kissinger: That's right, specific solutions are not so important to us
at this moment.
Ortoli: What we are doing is one way to state the problem. Tactically,
it's an answer; it's good tactics.
Kissinger: We'd be isolated if we didn't respond.
Soames: This is one important point on which we have to work together.
Ortoli: The other point that I wish to touch on, Mr. President, is that of
the economic and monetary problems of the Free World.
The way in which we solve inflation is bigger -- more important -- than the
problem of energy and raw materials. This is my personal opinion.
If we have good, strong economies, this is most important, most important
for Europe. If we don't succeed, there will be social, economic and political
problems -- I hope not in the United States -- but certainly in Europe.
People will ask: Is the system good? We have to work together. I don't
want to discuss specifics today, but it is most important to have a common
view. I spoke to Helmut Schmidt about it last week.
To be frank, this problem places a big responsibility on the United States -- I
say this in the sense of the US-European relationship, not U.S. leadership.
If the dollar is not strong, we will suffer. If you do not have a good
economy, we will suffer. America in its internal policy must take a deeper
view of the influence it exerts in our world. However, I would add that we
are on the way, we have had good meetings. We have not achieved an,
(Ortoli pauses seeking correct word, interpreter assists)
yes, we have not
achieved an intimacy for our policy. You will have to excuse my English.
Kissinger: That was very eloquent.
SECRET/NODIS
SECRET/NODIS
- 5 -
Soames: Yes, I believe he is better in English than in French.
President: My Administration believes strongly in a strong EC, and I
believe strongly in close relations between the EC and the United States.
If there are problems, or if problems arise, I want my Administration to
work closely with the Community in their resolution.
We have had a successful two days in the NATO meetings here. There was
a good spirit in the meetings, a good affirmation of the Alliance purposes
and objectives.
Economic conditions here and in the United States are bothersome to all of
us. I recognize that a continuing recessionary period could have an impact
on us and on political life in the United States. And, I am realistic, I
appreciate that the impact would be worldwide. My judgment, based on
the information I have been receiving from our experts, as well as my
own intuition and so on, is that we have gone through a rapid change from
inflation to unemployment. Last fall, inflation was running at 12-14 percent,
a level not anticipated by the experts, resulting from increases in crude
oil and in food.
Last fall, we had an economic summit. We brought in 20 experts -- liberals,
conservatives and middle of the road -- and not one forecast that we would
go 80 quickly from inflation to unemployment. Neither was this anticipated
here in Europe. The consensus now among the experts is that we have
bottomed out. Two months ago, there were few optimistic indicators; now
there are many more optimistic indicators. Yesterday, we had good news
from the Department of Commerce. It puts out a review of twelve indicators
every month, and there was a 4.2 plus, this following a .1 or .2 plus last
month. This was the most sizeable jump in years -- all pluses but one which was
not indicated, but I think this indicator would also have been a plus. We have
made significant progress on inflation from 12 percent to our best estimate
of around five percent later this year. Now, even that is too high.
Ortoli and Soames: If only we could have it.
President:
In the meantime, there has been a high rise in unemployment
from five percent to nine percent. And, with that very high rate, we're
under pressureto overstimulate the economy both fiscally and monetarily.
We feel this would be no more than a quick cure which would lead to a much
more serious problem 18 months from now. The Federal Reserve Board,
FORD
&
SECRET/NODIS
GERALD
SECRET/NODIS
- 6 -
which is our central bank, has committed itself to move from a five to
seven and one-half percent increase in the supply of money. This will
sustain economic growth without the pitfalls of inflation.
We have had an encouraging sign in unemployment for the first time in
five months. We had a 250, 000 increase in employment. This is not great
but it is a change. In the last month there has also been an increase in
the hours worked. Employers are working their employees longer hours.
There has been a change for the better in the productivity of the U.S.
work force. Our recession revolved around -- statisticians say -- the
most rapid inventory liquidation in the history of the United States. With
the heavy burden of the inventory liquidated we now have a better balance
between the producer and the consumer. Now, we'll start a steady rate of
improvement in the health of the economy. The unemployment is still
a disappointment, but there is always a lag here. As employers begin
to work people longer hours, we think the economic climate in the third
and fourth quarter of the year will be on the upswing.
We won't be neglectful of your interests. At the same time, we won't give
way to people who want to overstimulate.
Ortoli: What we have to do is to anticipate, to end the recession and to have
five or six good years for our economies -- we really need them.
Kissinger: The problem is that we don't have a good theory to produce
these good years.
Ortoli: You can't have a good theory without cooperation.
President: I agree; if we don't cooperate, no success will be possible.
Soames: You know, we very nearly had a war.
President: I know.
Soames: We had to go very far.
President: We appreciated your cooperation.
Soames: Cheese is a funny thing to go to war about.
SECRET/NODIS
SECRET/NODIS
- 7 -
Soames: For political reasons, we went too far. It did damage. The
countervailing duty problem must be tackled in the Multilateral Trade
Negotiations.
Meanwhile, please, no more political commitments, canned hams, float
glass, who knows what next.
Please don't misread the action we took the last time.
President: Don't you want us to move on automobiles (laughter). Seriously,
I am from the biggest car manufacturing state and I think the U.S. industry
ought to be competitive.
Soames: But I wasn't thinking about automobiles.
Hartman: You scared him.
Soames: No, more mundane things -- canned hams -- we couldn't take the
same evading action.
Ortoli: We had a very hard time with this in the Commission.
President: We appreciate what you did. It was a difficult situation. We
had considerable pressure in our government. I remember, a one week
extension, and then a few more weeks. You were most helpful and I
appreciate the position.
However, I can't make any promises.
Ortoli: (As meeting concludes) I will have to say some words to the press.
I will say we discussed US-EC cooperation, economic prospects, and had a
general talk about energy and raw materials.
President: Fine, Let me walk you to your car.
MEMORANDUM
NATIONAL SECURITY COUNCIL
3850X
SEGRET/NODIS
ACTION
June 4, 1975
MEMORANDUM FOR
GENERAL Mr. ENERAI Clift an SCOWCROFT
FROM:
SUBJECT:
President's Meeting with Ortoli --
Memorandum of Conversation
The memorandum of conversation at Tab A covers the President's
meeting with EC Commission President Ortoli on May 30, 1975 in
Brussels, Belgium.
RECOMMENDATION
That you approve the memcon at Tab A for forwarding to the President's
files.
APPROVE Bo
DISAPPROVE
SECRET/NODIS
DECLASCIFIED
E.O. 12968, SEC. 3.5
NSC MEMO, 11/24/98, STATE DEPT. GUIDELINES,
BY the
, NARA, DATE 5/19/24
LD
R
FORD