Mr. Jones has now approved my memorandum (Tab A) recommending the
employment of ten top-flight businessmen as regional export promotion
advisers at the FSR–1 grade, with the understanding that the cost would
be financed in the FY 1962 budget. You
will recall that this memorandum suggested that you would sound out
Secretary Hodges on this
subject. I now recommend that you do so at the earliest opportunity,
recognizing that this proposal may open up the whole subject of a
separate commercial foreign service under direction of the Department of
Commerce as recently recommended in a release of the Interstate and
Foreign Commerce Committee which Senator Magnuson authorized. A
statement on this subject is attached (Tab B).
The proposal for businessmen to serve as export promotion advisers is a
natural follow-up to the President’s message to Congress on Balance of
Payment and Gold. Since it requires reopening the FY 1962 budget for funding, I recommend
that we include also a request for funds to purchase market surveys in
foreign countries for American products. This activity is not now
provided for but should prove most useful to supplement the work of our
commercial staffs abroad. According to several despatches from the
field, such surveys are readily obtainable in some countries at a cost
considerably less than staffing our foreign service establishments for
increased activity in this field. The nature of these surveys would be
worked out by the Department of Commerce in consultation with various
industries or trade associations. This too is a logical follow-up to the
President’s request for vigorous action in the export promotion field. I
suggest you also make this proposal in your talk with Secretary
Hodges.
Recommendation: That you discuss the above two points with Secretary
Hodges.
Tab A
February 8,
1961
SUBJECT
Mr. Martin’s memorandum of
February 2, 1961 proposes the assignment of 10 FSR–1’s from the
business community to act as regional export promotion advisers to
our various Ambassadors.
I agree with the proposal in principle. However, it should be clearly
understood that there are no funds in sight at the present time to
proceed with such appointments. It may be that prospective
appointees would not be recruited, cleared and ready for entrance on
duty until near the end of the current fiscal year.
In this event, we would have to seek an increase in the 1962 ceiling
to fund them or provide for them within whatever funds are finally
appropriated.
In view of the President’s remarks on export promotion in his recent
Message to the Congress, I plan to seek an increase in the budget
ceiling.
Tab B
[Facsimile Page 3]
STATEMENT ON INTEGRATED COMMERCIAL ACTIVITIES IN THE
FOREIGN SERVICE
1. In the conduct of foreign affairs, a high percentage of the
problems are economic in nature and require staffing of our missions
abroad with officers competent in this field. The work done by these
officers is of direct concern and interest to American business.
Commercial work is now an integral part of economic and other
mission activities. Our Ambassadors must continue to direct the
economic work of our missions, including all but the most routine
commercial tasks.
2. Our improved trade position today is attributed in large part to
successful negotiating efforts by our missions to achieve relaxation
of foreign trade and exchange controls. A unified service
facilitates such team operations which require the participation of
diplomatic, economic and commercial officers. Thus, a unified
service, including commercial officers, is stronger than an
independent commercial service, since the Chief of Mission and key
officers are more fully informed at all times and better able to
place the full weight of the United States Diplomatic Mission behind
our commercial activities.
3. Commercial work is thus handled as a function of our missions with
different officers contributing to it. Designated commercial
officers by arbitrary definition are those who devote over one-half
of their time
[Typeset Page 1737]
to this work. Virtually all economic officers
and many consular officers spend part of their time on commercial
matters. Moreover, commercial work is further supported by permanent
staffs of competent commercial specialists native to the area. Only
by these
[Facsimile Page 4]
means is a truly world-wide commercial service possible without
great waste and expense.
4. As presently administered, the Departments of State and Commerce
work jointly in the recruitment, selection and placement of
commercial officers. The two Departments collaborate in planning and
instructing our missions on commercial and many general trade
matters. The present system avoids duplication of administrative
costs, representation, and reporting, which otherwise would obtain,
and provides clear lines of responsibility and authority in the
field.
5. Any shift of commercial work to another service would perforce
mean the loss of expertise built into the career foreign service
over the last twenty years. There are presently some three hundred
officers with identified skills in commercial work, and some three
hundred others who have backgrounds identified as desirable for
commercial specialization. A new commercial foreign service would
not be expected to attract more than a few volunteers from this
group. In any circumstance, the problem of recruiting competent
personnel for a new service would be formidable.
6. Functionally, a separate commercial service would mean either the
loss of economic and consular officers’ services or would require
continued dependence upon the Foreign Service for a large part of
the needs of the Department of Commerce and the American business
community. The alternative would be costly duplication of Embassy
economic staffs.
7. The urgent need to maintain a favorable trade balance dictates
that commercial work be strengthened by the most expeditious means
[Facsimile Page 5]
within the present organizational framework, rather than risk the
confusion and problems obviously inherent in setting up a new
service.
8. The Foreign Service is sufficiently flexible to accomplish all
that a separate commercial service could do, providing budgetary
resources are made available and reasonable priority is accorded the
commercial function. In addition to the present complement of
officers experienced in commercial work, new officers have been and
can be recruited from business, or from Department of Commerce
personnel, and trained for foreign assignment. Moreover, joint
operations in the commercial work by the Departments of State and
Commerce, and direct administration in the field by our Chiefs of
Mission, reflect with reasonable accuracy the respective
responsibilities of the two Departments in the foreign and domestic
fields.
