Preface

Structure and Scope of the Foreign Relations Series

This volume is part of a subseries of volumes of the Foreign Relations series that documents the most important issues in the foreign policy of the administration of Jimmy Carter. This volume covers U.S. foreign economic policy from 1977 to 1980, focusing on international monetary policy, trade policy, economic summitry, North-South economic relations, and commodity policy. Readers interested in U.S. energy policy and the implications of the 1979 oil crisis should consult Foreign Relations, 1969–1976, volume XXXVII, Energy Crisis, 1974–1980. For U.S. economic relations with a specific country or region, readers should consult the relevant geographically-focused volume in the Foreign Relations Carter subseries. Additional documentation on foreign aid and human rights, as well as world hunger, may be found in Foreign Relations, 1977–1980, volume II, Human Rights and Humanitarian Affairs. The political aspects of North-South relations are covered in Foreign Relations, 1977–1980, volume XXV, United Nations; Law of the Sea. Finally, for the organization of the foreign economic policymaking process, readers should consult Foreign Relations, 1977–1980, volume XXVIII, Organization and Management of Foreign Policy.

Focus of Research and Principles of Selection for Foreign Relations, 1977–1980, Volume III

During Jimmy Carter’s four-year tenure as president, the United States was beset by a host of economic troubles: in addition to the high rates of inflation and oil shortages for which the late 1970s are perhaps best remembered, the United States experienced persistent trade deficits and a steep decline in the value of the dollar. The volume examines the Carter administration’s efforts to grapple with these challenges through its international trade and monetary policies and its involvement in the Group of Seven (G–7) summit. In crafting his policies in this area, Carter relied upon advice from policymakers such as Special Representative for Economic Summits Henry Owen, Secretaries of the Treasury W. Michael Blumenthal and G. William Miller, Special Representative for Trade Negotiations Robert Strauss, President’s Assistant for National Security Affairs Zbigniew Brzezinski, and Secretary of State Cyrus Vance, as well as advisers such as President’s Assistant for Domestic Affairs and Policy Stuart Eizenstat and Council of Economic Advisers Chairman Charles Shultze. In the realm of trade policy, the volume documents the effort, led by Strauss, to bring the Tokyo Round [Page X] of trade negotiations launched in September 1973 to a successful conclusion and to secure congressional approval of the resulting agreements; it also documents the administration’s attempt to increase sales abroad through an export promotion initiative, as well as its effort to convince the Japanese government to open its domestic market wider to U.S. exports. In addition to seeking out new markets abroad, the Carter White House helped domestic producers facing import competition at home in sectors such as steel, shoes, and textiles. A major issue faced by the administration in the international monetary realm was the recurring downward market pressure on the U.S. dollar; here, the volume documents the administration’s attempts to arrest the dollar’s decline through domestic and international measures, including cooperation with West Germany, Japan, and Switzerland. The volume also documents the evolution of the G–7 summit, whose origins are covered in Foreign Relations, 1969–1976, volume XXXI, Foreign Economic Policy, 1973–1976. During the four years that Carter was in the Oval Office the G–7 summit was institutionalized; it also served as a forum in which members not only discussed economic policies, but coordinated them, most notably at the 1978 summit in Bonn.

One theme that emerges from these documents is the increasing importance of West Germany and Japan as both economic partners and economic rivals of the United States. Whereas in the previous Foreign Relations foreign economic policy volume it was the U.S.-French relationship that took center stage, in this volume the sheer number of documents pertaining to relations with West Germany and Japan speak to the extent to which relations with Bonn and Tokyo absorbed the energies of Washington officials (although France does not disappear, as Paris’ cooperation was essential to the successful conclusion of the Tokyo Round). A related theme is the changing nature of the United States’ role in the world economy, a change apparent in, for example, Washington’s vigorous efforts to convince Bonn and Tokyo to adopt expansionary economic policies in order to spur global growth, as well as its approach to issues such as the dollar pricing of oil, the role of Special Drawing Rights in the International Monetary Fund (IMF), and the creation of an IMF substitution account. Finally, there is the issue of confidence. Long before Carter’s July 15, 1979, “malaise” speech, in which he spoke not only of energy policy but the country’s “crisis of confidence,” policymakers worried about the economic implications of the national and international mood: a May 6, 1977, memorandum from Brzezinski to Carter on the eve of the London G–7 summit, for example, was entitled “Confidence is the Theme.”

During the 1976 presidential campaign, Carter promised to adopt a new approach to U.S. relations with the developing world. The volume documents his administration’s efforts in this regard, examining [Page XI] its approach to North-South economic relations and commodity policy. It covers the issues of foreign aid and the United States’ involvement in the various development-focused international financial institutions; it also documents the creation of a new entity, the Common Fund, a mechanism designed to stabilize the prices of primary commodities in order to help encourage less developed country (LDC) income stability. Also included are documents covering the problems of world hunger and the U.S. position on LDC debt relief, as well as the administration’s LDC technology transfer initiative. A theme that emerges from these documents is the politics of U.S.–LDC economic relations, seen in, for example, the way in which its relationship with the Soviet Union affected the United States’ policies towards LDCs and in U.S. efforts to leverage the provision of foreign aid to secure greater respect for human rights.

Like all recent Foreign Relations volumes, the emphasis of this volume is on policy formulation, rather than the implementation of policy or day-to-day diplomacy. As in other volumes in the Carter subseries, the National Security Council and the Department of State play important roles in the policymaking process; in this volume, however, they are joined by the Department of the Treasury, the Office of the Special Representative for Trade Negotiations, and, on certain issues, the Chairman of the Council of Economic Advisers and the President’s Assistant for Domestic Affairs and Policy. Policymaking on foreign economic issues was firmly centered in Washington; as such, internal memoranda, records of discussions among U.S. policymakers and between U.S. and foreign officials, and correspondence with foreign leaders comprise the bulk of the documents in the volume, while very few telegrams are printed.

Acknowledgements

The editor wishes to acknowledge the assistance of officials at the Jimmy Carter Library, especially Ceri McCarron, Brittany Parris, and James Yancey. Thanks are also due to Nancy Smith, the former Director of the Presidential Materials Staff at the National Archives and Records Administration, and to the Central Intelligence Agency for arranging access to the Carter Library materials scanned for the Remote Archive Capture project. The Historical Staff of the Central Intelligence Agency were helpful in arranging full access to the files of the Central Intelligence Agency. The editor also thanks the staff at the National Archives and Records Administration facility in College Park, Maryland, particularly the now-retired Herbert Rawlings Milton, for their valuable assistance. Finally, thanks go to Veronica Marco and Steve Milline at the Department of the Treasury for arranging access to the files of Secretaries of the Treasury W. Michael Blumenthal and G. William Miller.

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The editor collected and selected the documentation and edited the volume under the supervision of Erin Mahan, then Chief of the Division of Arms Control, Asia, and Africa, and Edward C. Keefer, then General Editor of the Foreign Relations series. The volume was reviewed by Adam Howard, then Chief of the Division of Middle East and Africa. Dean Weatherhead coordinated the declassification review under the supervision of Susan C. Weetman and Carl Ashley, successive Chiefs of the Declassification and Publishing Division. Rita Baker and Stephanie Eckroth did the copy and technical editing. Do Mi Stauber prepared the index.