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

204. Memorandum for the Record¹

Washington, December 21, 1973.

SUBJECT

• Summary Minutes of CIEP Executive Committee Meeting, December 21, 1973

ATTENDEES

• List Attached²

[Omitted here is discussion of the multilateral textile agreement and the GATT Article XXIV:6 negotiations with the EC.]

III. Trade Bill

Mr. Flanigan identified the main issue as the extent to which we accept the changes in our bill made by the House as we move into our presentation in the Senate. He noted that Ambassador Pearce’s discussion paper³ identified three categories into which the extent to which we should press for changes in the House bill would fall. In addition to the items identified in that paper, Mr. Flanigan said that we should add tariff negotiating authority as a matter on which we might seek to get Senate support for the original Administration proposal. (Although it was not mentioned we would also seek Senate changes of the provisions in the House bill by which the Congress is seeking to legislate the way in which the President organizes his executive office.)

Ambassador Pearce identified two main areas as “must” changes: Title IV and the section in the House bill concerning countervailing duties. Mr. Flanigan said that he would amend the paper’s discussion on Title IV to read that we must either get an acceptable compromise out of the Senate on emigration policies or remove the Title entirely from the bill. Ambassador Pearce said he would review the tactical handling of this matter again in the interagency steering committee. As regards the way in which we handle countervailing duties and negotiating authority, Ambassador Pearce said that the main issue is how to protect adequate flexibility and avoid having the Senate move us even further away from an acceptable position. He regarded this as a tactical matter as we move through the Finance Committee mark-up process.

Moving to the next set of desirable changes, the Committee discussed our posture in the Senate as regards trade adjustment assistance. After some discussion, Secretary Shultz said that if we are going to have to accept a trade adjustment assistance program along the lines developed by the House, its financing would have to be improved as discussed in the Pearce paper, i.e., by limiting the federal financing to the difference between what workers would receive from state unemployment compensation programs and the additional levels provided for in the House. However, he said that we should still call the Finance Committee’s attention to our original proposal as a better way of dealing with the problem of employment dislocation caused by imports and do our best to convince the Committee that this would be a preferable alternative. Ambassador Pearce agreed to make such an effort.

Secretary Dent expressed his view that we need a much more highly organized effort to convince not only the Finance Committee but the Senate as a whole that Title IV is unacceptable and to work hard to get an acceptable compromise. Mr. Flanigan said that we are now developing a strategy on this which is broader than that indicated in Ambassador Pearce’s paper and that we will be discussing it further as we go along. With the amendments as discussed above, Secretary Shultz said that the Pearce paper was approved.

IV. GATT Trade Negotiating Committee

Ambassador Malmgren reported on the efforts we have been making in Geneva to get the work of the Trade Negotiating Committee under way. The main problem was the EC’s insistence that agricultural matters would only be discussed in a special agricultural committee and not in any other committee of the TNC. He noted that the EC Commission was trying to develop an acceptable compromise formula with us according to which the EC would make some kind of statement to the effect that, while the work would be generally separate, the final outcome would have to include agriculture as part of the overall balance in the negotiations. So far, the French have been the major obstacle and their problem is largely political rather than economic. He reported that the French are trying to work out some agreement at the ministerial level within the French Government and that we will have to see how that process develops. There will be another effort made at the TNC level in January to try to get the negotiations under way.

[Omitted here is discussion unrelated to the trade bill or the GATT Trade Negotiating Committee.]

Peter M. Flanigan

⁴
Executive Director

1. Source: National Archives, RG 429, Records of the Council on International Economic Policy, 1971–1977, Box 251, Records of Executive Committee Meetings, 1973–1974, 53179 PMF Executive Committee Meeting of CIEP on December 21, 1973 in Roosevelt Rm 12/13/73. Confidential. Drafted on December 28 by Morris.
2. According to the attached list, Shultz, Volcker, Brooks, Eberle, Malmgren, Pearce, STR staff member Herbert Propps, Dent, Fox, Butz, Goodman, Cooper, Dam, Casey, Renner, Stein, Bridgewater, Flanigan, Hinton, Morris, Jayne, Sternfeld, Niehuss, and CIEP staff member Richard Erb attended the meeting.
3. Document 202.
4. Printed from a copy that bears Flanigan’s typed signature.