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

84. Position Paper Prepared in the Department of State⁰

CFEP 574/2

October 17, 1958.

POSITION PAPER FOR UNITED STATES DELEGATION ON LEAD AND ZINC STUDY GROUP

The Delegation should make clear at the beginning of the meeting and as often thereafter as may be necessary to prevent misunderstanding that the United States considers that the discussions are exploratory and that U.S. participation therein does not imply any commitment on its part to support any particular formula or to participate in an international commodity agreement for lead and zinc. In this connection, the Delegation should make clear that any proposals made during the exploratory discussions would in any case, as far as the United States is concerned, have to be submitted to the appropriate policy making officials (Council on Foreign Economic Policy) for consideration on their merits.

The Delegation should suggest that a better balance in world production and consumption of lead and zinc is desirable and might best be achieved during the next year or so by undertaking among exporting countries, in consultation with importing countries, to reduce the level of exports of lead and zinc and the ores of these metals. If this type of arrangement is unacceptable to other countries, the Delegation may, subject to the instructions set out in the preceding paragraph discuss such alternative proposals for correcting the present imbalance between the supply and demand as may be made by others.

The United States Delegation should not participate in the drafting of any commodity agreement nor should it present any drafts of its own. If a draft or drafts should be presented by others, the Delegation may discuss it provided it is made clear that discussion is not to be interpreted as United States approval.

Should the discussions reveal majority sentiment in favor of the establishment of a study group under the aegis of the United Nations to facilitate international discussion of the problem of international trade in lead and zinc, the United States Delegation may vote in favor of the establishment of such a group, provided it makes clear that the United States Government reserves the right to withdraw from the study group whenever in the judgment of this Government the study group has ceased to serve a useful purpose.

In the course of the discussions, other Delegations may inquire as to the interpretation placed by the United States on the references which have been made to an “equitable sharing of the burden of readjustment”. In reply to any such inquiries, the Delegation should state that the concept behind those reference is that the lead and zinc mining industry in this country reduced production by about 25 per cent in early 1958 in an effort to remedy the imbalance. Furthermore, the United States considers that the import quotas already constitute an equitable sharing of the burden.

Other Delegations may inquire whether the United States is in principle prepared at this time to increase the level of permissible imports of lead and zinc into this country. The Delegation should respond to any such inquiries in the negative, pointing out that any increased imports into the United States market at this time would result in price declines which would serve neither the interests of the United States industry nor the interests of the foreign suppliers in this market. At the same time, the Delegation should make clear that in the judgment of the United States any multilateral arrangement should have as its objective an appropriate balance between the supply and demand in all markets and therefore any such arrangement should have the flexibility needed to adjust to changed conditions.

The Delegation should make clear, if the question arises, that the United States is not prepared to contribute to any buffer stock arrangement.

0. Source: Washington National Records Center, RG 59, CFEP Files: FRC 62 A 624, International Lead and Zinc Problems—CFEP 574. Official Use Only. There is no drafting information on the source text. Attached to it, however, is a memorandum from Cullen to the Council on Foreign Economic Policy which states the paper was drafted in the Department of State.