Foreign Relations of the United States, 1958–1960, Foreign Economic Policy, Volume IV

25. Minutes of the 95th Meeting of the Council on Foreign Economic Policy⁰

November 19, 1959.¹

[Here follows a list of 18 persons, including Randall, Samuel C. Waugh, President and Chairman of the Export-Import Bank; Robert Amory, Deputy Director (Intelligence), Central Intelligence Agency; and Paul H. Cullen, Secretary of the Council on Foreign Economic Policy.]

1. The draft minutes of the meeting of October 8, 1959 were approved.

II. 1. Dr. Don Paarlberg, Special Assistant to the President, briefed the Council on Foreign Economic Policy on the foreign economic policy issues now facing the United States as the result of the recent deficit balance of payments situation.²

2. Dr. Paarlberg stated that the competitive situation of exports of the United States has been deteriorating while at the same time our imports are increasing, thus sharply reducing our favorable balance of trade. This represents a threat to our whole economy and reduces substantially our capability for providing economic assistance to the underdeveloped countries. Dr. Paarlberg said that because of the deficit in the balance of payments, there was now a need to recast our foreign economic policy, and that while he did not think that we should embark on a policy of protectionism, there were certain things which we might consider doing. He suggested that the U.S. should examine the desirability of:

a. Focusing, in the forthcoming GATT negotiations, on the elimination of restrictions against dollar exports rather than further reductions of U.S. tariffs.

b. Making more use of the escape clause.

c. Providing economic assistance in the form of goods rather than dollars.

d. Asking our NATO allies to shoulder a greater share of the costs of economic development in the underdeveloped countries and for the military effort of the Free World.

e. Strengthening public and private efforts to expand our exports.

f. Resisting legislative changes in the trade field on the grounds that the present legislation is sound and will permit adjustments that are necessary to meet the new situation which confronts the U.S.

3. Under Secretary of State Dillon stated that in connection with balance of payments problems, interested agencies had already agreed that economic development loans provided by the U.S. should, to the extent possible, be tied to U.S. procurement. This affects all DLF projects and certain International Cooperation Administration economic development projects which are in the process of being turned over to the DLF. Mr. Dillon stated that while this policy may not have an immediate effect on our balance of payments situation, it would have a salutary effect later. In addition, it may stimulate Western World countries to provide more economic development for the underdeveloped countries than they are now doing. Mr. Dillon stated that there was no intention at this time of extending this policy to ICA procurement other than indicated above.

4. Under Secretary of Commerce Ray said that the Secretary of Commerce had just appointed a top level task group consisting of Messrs. Ray—Chairman, Randall, Dillon, Baird, Saulnier, and Waugh to advise the Government on what it should do to increase exports, and that the Departments of Commerce, State and Treasury are now studying specifics for expanding exports.

Paul H. Cullen
Lt. Col., USA
Secretary

0. Source: Eisenhower Library, CFEP Chairman Records, Papers Series, CFEP Minutes 1959. Confidential.
1. The meeting took place in the Executive Office Building.
2. A paper in outline form by Paarlberg headed “Foreign Economic Policy Issues,” which was the basis of his briefing, was circulated to the Council with a covering memorandum of November 10 from Cullen. (Department of State, E–CFEP Files: Lot 61 D 282A, Foreign Economic Policy Issues)