CONFIDENTIAL AND GUARD
Administration themselves are likely to lose patience and move towards unilateral action. No move is likely before' the Japanese Prime Minister's visit but it could be made any time after that. Our objective, as I see it, remains to take whatever further action may be open to us to prevent such a move; because once the Administration or Congress became seriously committed to unilateral action it would become very much harder, if not impossible, to retrieve the situation with a compromise proposal.
5.
For the moment I agree that we can only await developments. Certainly as things have developed there now seems to be no scope for a high-level message until we have some reasonable alternative to put forward. It seems to me, however, that we should try to resolve as quickly as possible the present differences between curselves, Hong Kong and Japan on the kind of compromise we could envisage. (In my impression the E.E.C. are less concerned; certainly, to judge from the record of Peter Carey's talks in Brussels on 30 September, they seem rather badly informed about the American situation). I would judge that the mere initiation of a study in GATT would prove sufficient. GATT cuts no ice with those to whom the President is beholden in this context. They are apt to view the GATT as an institution in which innocent American boys get taken for a ride by foreigners. I think we must reckon on having to come up with something, whether in the GATT or other- wise, which will enable the President to convince himself, and at least plausibly to tell the Southern Republicans, that he has achieved some practical limitation of imports. We should, of course, aim to relate any limitation to cases of real damage and subject it to strict international discipline. I recognise the dangers of the selective bilateral approach referred to at the end of your paragraph 4, but do not see any easy way round accepting limitations on one or two reasonably justifiable items, even if this means finding a sacrificial lamb or two.
6.
As regards the channel of an eventual message, I remain convinced that only a direct approach to the President would stand any chance of being effective. There could be no certainty chat anything done through State Department, whatever the level, would get through. I do not think that we should be deterred by the expressions of annoyance over the Mildenhall memorandum (to which,· incidentally, a reply is being prepared) uttered by Nehmer and Chotiner in Geneva. They affect to believe that the Prime Minister decided against speaking to Mr. Nixon and that officials then went behind his back. We have no evidence that any real offence has been taken and I think we should treat the statements' in Genova as part of a deliberate gamo.
(E. A. Midgley)
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CONFIDENTIAL AND GUARD
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