Office of the Historian

333. Memorandum From the President’s Deputy Special Assistant for National Security Affairs (Bator) to President Johnson1

Washington, March 8, 1967, 5 p.m.

SUBJECT

  • Trade Policy

At Tab A, Secretary Rusk sketches a post-Kennedy Round trade policy—assuming that things turn out well in Geneva.2 The work was done by a small committee consisting of Bill Roth, Tony Solomon, Sandy Trowbridge and myself. It has been approved by Rusk, Connor (before he left) and the appropriate Assistant Secretaries of Agriculture, Labor and Treasury.

The basic recommended strategy is that we not go for major trade legislation until 1969. Rather, we would:

  • —Seek a simple two-year extension of the TEA (now scheduled to expire in June). This would not give us much new tariff-cutting authority, but it would allow us to do the necessary housekeeping and keep the trade agreements program alive.
  • —Establish a blue-ribbon public committee to help Roth (and his successor) develop recommendations for the next big trade bill, to be proposed in 1969.

Neither of these steps requires immediate Presidential action (you have already tentatively approved the TEA extension). But it would be most useful at the Latin American Summit and elsewhere if we could mention some of the policy ideas we would propose to take up with the [Page 885] blue-ribbon committee. It makes no sense to talk in public about these ideas, however, until we have some notion of how they would be greeted on the Hill.

Therefore, Rusk recommends that you authorize quiet soundings with key people on the Hill about the steps summarized below. If we could get positive reactions, you would have a sweetner at Punta Del Este, and we would be less vulnerable to the barrage of complaints we now get from the less-developed countries about trade policy. If the Congress reacted badly, we would know to move slowly.

New Policy Directions

The major initiatives recommended are as follows:

  • —Major new trade legislation in 1969 authorizing us to propose phased reduction and elimination of all trade barriers throughout the industrialized world. (Full elimination would take a long time—perhaps 10–15 years.)
  • —A “head start” advanced cut for poor countries. (We would keep an escape clause in case of serious damage to domestic producers.)
  • —Insistence, as a condition of the elimination of trade barriers, that some rich countries give up the regional preferential treatment they now receive from their former colonies, etc.
  • —More liberal adjustment assistance for domestic industry affected by changes in import patterns.

These steps are designated to head off the present trend toward special trade arrangements which exclude us and threaten future U.S. exports. They would provide a liberal trade alternative which makes more economic and political sense for all nations. They would also include special benefits for the poor countries who feel that current trade arrangements are designed only to keep them poor.

You may want a fuller discussion of this strategy before authorizing talks on the Hill. If so, I could spell out the proposals for you in more detail, and/or set up a small meeting of the relevant people. In either case, we need to move as soon as possible if you are to have this in your pocket for the Summit. (At Tab B is a sample of the points you might make at Punta Del Este if we can be ready by then.)3

FMB

Tell Rusk and Roth to go ahead with quiet talks on the Hill4

Set up meeting

Speak to me

  1. Source: Johnson Library, National Security File, Name File, Bator Memoranda, Box 1–2. Confidential.↩
  2. Document 330.↩
  3. Not printed.↩
  4. This option is checked, and the handwritten notation “fully with large representative number—L” was written next to it by President Johnson.↩