CONFIDENTIAL
021401 MDHIAN 346
BE WELCOME TO CLINTON'S TEAM AND COULD BE USEFUL IN THIS REGARD.
GATT
5. BEFORE THE ELECTION SOME OF CLINTON'S ADVISERS WERE SAYING THAT THEY DID NOT WANT TO SEE AN AGREEMENT ON EC/U.S. AGRICULTURE BEFORE 3 NOVEMBER. CLINTON HIMSELF DISAVOWED THIS. WE HAVE EXPLAINED TO HIS TEAM THE URGENT NEED TO RESUME DISCUSSIONS IF WE ARE TO AVOID OILSEEDS RETALIATION LEADING INTO A MAJOR TRADE WAR. IN HIS STATEMENT THIS AFTERNOON, CLINTON STRESSED THE IMPORTANCE OF GETTING A GOOD AGREEMENT IN THE GATT. HIS ADVISERS HOPE THAT THERE MAY BE BETTER PROGRESS IN FURTHER U.S./EC CONTACTS BEFORE HE TAKES OVER. THEY ADDED THAT IF THERE WERE A CONTINUING DEADLOCK IN JANUARY, IT WOULD BE DIFFICULT TO SECURE RENEWAL OF THE EXISTING FAST-TRACK AUTHORITY WITHOUT ADD-ONS, INCLUDING SUPER-301.
IRAQ
6. CLINTON SAYS THAT HE IS CONCERNED TO MAINTAIN THE PRESSURE ON SADDAM HUSSEIN. HE WILL BE FULLY BRIEFED BY THE WHITE HOUSE AND WOULD BE CONSULTED IF SADDAM HUSSEIN LOOKED LIKE PROVOKING A CONFRONTATION BEFORE CLINTON TAKES OVER.
ARAB/ISRAEL
7. WE SHALL URGE THE CLINTON TEAM TO CONTINUE THE ARAB/ISRAEL PEACE PROCESS AND THEY WILL SEEK TO DO SO, THOUGH WITHOUT THE SAME DEGREE OF PERSONAL INVOLVEMENT BUSH AND BAKER HAVE SHOWN.
YUGOSLAVIA
8.
CLINTON HAS SHOWN SIGNS OF WANTING TO PURSUE AN ACTIVIST POLICY ON YUGOSLAVIA. HE HAS SUPPORTED THE NO-FLY ZONE. HE WILL WANT TO ACT MULTILATERALLY. HE WILL NOW BE BRIEFED ON THE MILITARY DIFFICULTIES.
TAXATION OF FOREIGN COMPANIES
9. WE HAVE HAD NUMEROUS EXCHANGES WITH CLINTON'S ECONOMIC ADVISERS ABOUT THIS. THEY SAY THAT CLINTON DOES NOT ENVISAGE NEW LEGISLATION BUT MORE EFFECTIVE ENFORCEMENT BY THE I.R.S. AND THAT THEY ARE AIMING MAINLY AT ILLEGITIMATE TRANSFER PRICING BY THE JAPANESE CAR MANUFACTURERS. BUT CLINTON'S DOMESTIC TEAM ARE UNRECONSTRUCTED ON THIS SUBJECT. THE IDEA THAT MORE MONEY CAN BE RAISED FROM FOREIGN CORPORATIONS FIGURED PROMINENTLY IN HIS T.V. CAMPAIGN. MORE WORK IS GOING TO HAVE TO BE DONE TO BRING HOME TO CLINTON'S PEOPLE THE DAMAGE UNCERTAINTY IN THIS AREA COULD DO TO INVESTMENT IN THE U.S. AND THE U.S. ECONOMY.
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