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international law. Discussions on freedom of movement and freedom of access were likely to result in agreement. There was also a need to agree on confidence-building measures. The USSR is still arguing over the depth of land area to be covered in notification of military manoeuvres and would also like notification to be voluntary, whereas other countries wish it to be compulsory. Nevertheless, in his view, it was reasonably apparent that the final conference will take place this summer. This timetable has obvious psychological importance in relation to the holding of the 25th Communist Party Congress next February. There are gounds for thinking that Brezhnev regards the culmination of the. CSCE and the signing of a treaty on peace and co-operation in Europe as the summation of his term of office. The treaty would also have a psychological effect in the countries of Eastern Europe where the people would see it as a document enshrining certain rights of human contacts and access.
6.
Mr Callaghan said that British policy was aimed at securing a follow-up in, say, two years' time, to review progress. The USSR was obviously not keen on this proposal.
The British Economy
7. As a final point, Mr Callaghan said he was becoming unhappily aware that Britain's foreign policy is being weakened by what is happening in this country and particularly by the state of the economy. The effect of such factors as the present rate of inflation, the cutback in defence, our rate of borrowing overseas and our falling productivity, is to decrease our influence abroad and to make other countries less inclined to listen to our arguments, however good they may be.
8. Mr Jones declined to comment in detail on Mr Callaghan's last point except to say that all trade unionists were working hard to see if the movement could contribute to finding a solution to these problems, which were not all created by trade union members or by union wage claims.
This
9. On the question of British membership of the EEC, his reaction was that the British people had decided the matter and we must all accept the result of the referendum and make the best of it. Neither the TUC's General Council nor the International Committee had met formally since the referendum so no formal decisions had yet been taken by the TUC on EEC issues. Nevertheless he personally had no doubt that the TUC would now take part in SEC business through the institutions on which it had the right of representation. did not mean that the British trade union movement would enter on its EEC commitments with starry eyes. As Mr Callaghan had said, there were many problems and taking part in the Economic and Social Committee would involve the TUC in much time and work. Doubtless from time to time it would be necessary for the TUC to consult with the Government about policy on the business of that Committee. In his view, there was also a clear need to make the institutions more effective in influencing Community policies.
/ 10. Mr Murray
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