448. Memorandum from Schaetzel to Ball, October 61

[Facsimile Page 1]

SUBJECT

  • Comments on Howard Peterson’s Trade Legislation Proposals

Attached you will find a memorandum which sets forth Peterson’s preliminary ideas on the trade program. Before reacting to these you will of course want comments from E. You will find it helpful to look over the record of the afternoon Consultant’s meeting last Tuesday, and I call your attention to Ray Vernon’s notes which he prepared at my request.

A few observations on Ray’s notes—which apply as well to Peterson’s proposals:

First I think it needs to be carefully considered how one handles this whole business within the Government. It seems to me that Peterson’s essentially conservative notion of tactics ignores the atmosphere within which we must work in Washington, namely a constant process of chiseling away. The result of starting low, as Willard Thorp pointed out in the meeting, is that we would end up with a perfectly impossible proposition even before we present the matter to the Congress. I think this observation ought to be taken into account in reviewing the totality of Peterson’s proposal.

Related somewhat to this point is the danger implicit in Peterson’s retention of both the framework of the reciprocal trade agreements program and the peril point. It seems to me that the Congress and the protectionists are thus given an ideal opportunity to pump back into the legislation all the old and restrictive language, excising in the process the new ideas put forward. This is much what happened with the AID legislation.

You will also remember that when we were working over the [Facsimile Page 2] Stevenson and the various task force reports we thought there was tremendous advantage in putting forward something new which would force the enemy to fight on new ground and in the process establish new positions. I am very fearful that the Peterson approach, while attempting to garner whatever residual support exists for the [Typeset Page 1765] “known evil” as contrasted to the “unknown”, ignores the extent to which he elects terrain highly favorable to the enemy.

I also attach importance to the point that Ray makes, namely, that the Europeans will act adversely and strongly to anything that smacks of the peril point procedure.

Finally, it seems to me Ray’s proposal that we should go ahead with this bill and if it becomes subject to crippling amendment then we withdraw it is basically naive. The loss of governmental prestige, the sense of victory which the protectionists would have, discouragement abroad, would put us in an absolutely impossible position to go back after the 1962 election.

  1. Comments on Petersen’s trade legislation proposals. Confidential. 2 pp. Department of State, Central Files, 411.0041/10–661.