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7.
We think that our line of action should therefore be:-
(1) To keep in touch with the Japanese. We might repeat that
(as they will know from the Geneva meetings) disposed to favour the multilateral approach which they have mentioned. No doubt Cortazzi, to whom I am copying this letter, will continue to keep us fully informed of developments at Tokyo.
(ii) To keep in touch with the E.E.C. and see how they intend, at the resumed session of the C.T.C. in December, to clothe their proposal for a GATT Study. Our present thinking is that if such a Study is made wide in scope it will appear to the Americans as too patently a delaying tactic, and it will probably be best to direct it, at any rate in the first instance, to the situation in non-cotton textiles. However, we would wish at some stage to discuss this with the E.E.C., and we do not expect their thinking to develop quickly. Thus it is unlikely that there will be much advance until near the time of the resumed C.T.C. meeting. Desirable as from one point of view it might be to have something more concrete for the Americans to be considering before the time of Mr. Sato's visit to Washington, it is not realistic to expect this to be possible.
(iii) As regards the Americans, we assume that they will not act unilaterally nor allow Congress to have its head, at any rate until the C.T.C. has completed its next meeting. If this is correct, there
is little that we need or can do for the present. We can answer questions by saying that we are working on the idea of a GATT study put forward at Geneva by the E.E:C., and would be willing to see this further elaborated and discussed. If the Americans ask whether this means that we are now sympathetic to the idea of a GATT Conference, which we resisted so firmly when put forward by Stans during the summer, we shall have to blur our answer. The sort of GATT Study we have in mind does not, of course, mean anything so limited in time or so committed in appearance to producing results as a Conference. On the other hand we should not at this stage wish to give the Americans any grounds for rejecting the idea as unlikely to produce a practical outcome.
8. We would be very glad to have your comments on the situation as I have outlined it. If at a later stage it seemed desirable and appropriate to revert to the idea of a personal message, we should like your advice on the usefulness of preparing the way at a high level in the State Department.
9.
I am sending copies of this letter to Melville, Cortazzi', Christofas, Jordan and Gallagher.
You
Bill
CONFIDENTIAL,
W. Hughes
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