Foreign Relations of the United States, 1969–1976, Volume XXXI, Foreign Economic Policy, 1973–1976

181. Letter From Secretary of Agriculture Butz to Secretary of the Treasury Shultz¹

Washington, August 22, 1973.

Dear George:

You are undoubtedly familiar with the debate concerning the U.S. position on agriculture in the Multilateral Trade Negotiations which has been going on for some months.² I understand that this debate was resolved in mid-June when most agencies agreed to go along with a compromise negotiating plan which would give first and primary emphasis to the reduction of the level of border protection, but would also provide for subjecting domestic programs to international discipline in order to insure that border commitments were not circumvented by domestic actions.

If you are required to discuss agriculture in any detail during the course of the Tokyo Ministerial meeting, I trust that you will continue to adhere to that position. For your information, the enclosed talking points are drawn from the scope paper prepared for the GATT Preparatory Committee meeting in July,³ and in my opinion accurately reflect the consensus arrived at among agencies then. I see no reason at this time to depart from a position which makes good sense for the long run because of the temporary pressures caused by the current world food supply situation. I think you know how strongly I feel about the importance of letting the marketplace do the job.

Sincerely,

Earl L. Butz

Attachment

Talking Points on Agriculture in the Multilateral Trade Negotiations

1. Agricultural and industrial negotiations should move forward together, and should insure that agricultural progress is substantial and meaningful in trade terms.

2. Such progress can be achieved only through increasingly greater market orientation for agriculture.

3. Consequently, we will be working toward a more open trading system involving substantial reductions in border protection and export aids.

4. In order to insure that after reductions in border protection are achieved they are not offset by domestic actions, an effort should be made to negotiate some kind of understanding or code which would provide a framework for consultations on management of transition to the long-term objectives.

5. Where governments must take action to meet adjustment and income problems due to trade expansion, it would be expected that they would agree to carry out such actions in a way which reduces or eliminates the impact of the measures upon farmers in other countries.

1. Source: National Archives, RG 56, Records of Secretary of the Treasury George P. Shultz, 1971–1974, Entry 166, Box 1, GPS Agriculture 1973. No classification marking.
2. As a result of the agency responses he had received concerning the Department of Agriculture’s paper on “Agriculture in Multilateral Trade Negotiations” (see Documents 162, 165, and 166), Flanigan wrote Rogers, Shultz, Dent, Butz, Brennan, Kissinger, Stein, Ash, and Eberle on May 7 of his belief that “we should examine in more detail possible U.S. negotiating objectives and strategies on agriculture for the coming GATT round. Accordingly, I have asked Dr. Gale Johnson to chair a series of meetings for the purpose of drawing up specific options for review and decision at a more senior level.” The weekly meetings were to begin May 16; no record of the meetings has been found. (Ibid., Nixon Presidential Materials, NSC Files, Box 219, Agency Files, Council on International Economic Policy (CIEP) 1973 (Vol II))
3. The GATT Preparatory Committee met in Geneva July 2–25.