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SECRET
- 9 -
in Schedule C (developed countries) of the Foreign
Direct Investment Program has reduced American investment
in Spain to the detriment of the Spanish economy. They
argue that they should have been put into Schedule A
(less developed countries). They would undoubtedly be
satisfied with a reclassification into Schedule B
(countries heavily dependent on U.S. investment, such
as the U.K.). We believe the Spanish exaggerate the
economic effect of our program and that they desire
reclassification as much for psychological as for
economic reasons. It would give the Spanish Government
a concrete concession in the economic field which it
could publicize. We therefore propose to offer the
Spanish reclassification from Schedule C to Schedule B.
g. Spain-EC Negotiations
Our attitude toward Spain's negotiations for a
preferential trade arrangement with the European
Community will be an important factor in the base
negotiations. In accordance with NSDM 45, we will
oppose the Spanish-EC agreement as presently proposed,
but will indicate our acceptance of any arrangement
consistent with the GATT rules which Spain and the EC
might work out, such as one which provides a definite
SECRET
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"ocrText": "SECRET\n- 9 -\nin Schedule C (developed countries) of the Foreign\nDirect Investment Program has reduced American investment\nin Spain to the detriment of the Spanish economy. They\nargue that they should have been put into Schedule A\n(less developed countries). They would undoubtedly be\nsatisfied with a reclassification into Schedule B\n(countries heavily dependent on U.S. investment, such\nas the U.K.). We believe the Spanish exaggerate the\neconomic effect of our program and that they desire\nreclassification as much for psychological as for\neconomic reasons. It would give the Spanish Government\na concrete concession in the economic field which it\ncould publicize. We therefore propose to offer the\nSpanish reclassification from Schedule C to Schedule B.\ng. Spain-EC Negotiations\nOur attitude toward Spain's negotiations for a\npreferential trade arrangement with the European\nCommunity will be an important factor in the base\nnegotiations. In accordance with NSDM 45, we will\noppose the Spanish-EC agreement as presently proposed,\nbut will indicate our acceptance of any arrangement\nconsistent with the GATT rules which Spain and the EC\nmight work out, such as one which provides a definite\nSECRET"
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