64. Memorandum From the Deputy Under Secretary of State for Economic Affairs (Dillon) to President Eisenhower0

SUBJECT

  • Trade Legislation and Foreign Policy

In connection with the dinner you are giving tonight,1 you may wish to recall the vital importance of the trade agreements legislation to our foreign policy, as outlined in your message to the Congress:2

1.
Trade is vital to the health and strength of the economies of our partners and allies, on which their political stability and military power heavily depend.
2.
The assured future of the trade agreements program is particularly essential if we are to meet the growing Soviet economic offensive, which is aimed at dividing the free nations and swinging as many of them as possible into the Communist orbit. This is a challenge to our whole way of life, and the question is whether our system of free competitive enterprise will meet it.
3.
The free nations will not meet this challenge successfully unless they continue to reduce the barriers which they impose on their own trade among themselves. Closed markets and foreign exchange shortages caused by trade barriers can force free nations into economic dependence on the Communist bloc.
4.
United States leadership in the task of progressively freeing international trade is imperative. You said, “We will fail (in meeting this challenge) if the United States should now abandon the task of building a world trading system from which all free world countries can gain strength and prosperity in a free economic society.”
5.
A 5-year extension, rather than the usual 3-year extension, is especially necessary because of the formation of the European Common Market, which the United States wholeheartedly supports. We need the full 5 years in order to carry out careful negotiations on the uniform tariff which is to be established by the new European Economic Community during the next several years. This will further American interests in the European Common Market area and elsewhere in the free world.
6.
Your message to the Congress concluded with the following statement, “The 5-year extension of the Trade Agreements Act with broadened authority to negotiate is essential to America’s vital interests. It will strengthen our economy which is the foundation of our national security. It will enhance the economic health and strength of the free world. It will provide a powerful force in waging total peace.”

Douglas Dillon
  1. Source: Eisenhower Library, Whitman File, DullesHerter Series. No classification marking. No drafter is indicated on the source text.
  2. Eisenhower hosted a dinner at the White House to seek support for the administration’s trade legislation. Randall’s account of the origin of and planning for this dinner is ibid., Randall Journals, CFEP, 1958, vol. VIII, 2/23–4/28/58, March 4 and March 10 entries. His account of the dinner itself, which was attended by government and business representatives, is ibid., March 11 entry.
  3. See Document 63.