318. Memorandum From the Under Secretary of State for Economic Affairs (Mann) to President Johnson1
SUBJECT
- International Cocoa Conference
The United States is participating in another Conference beginning May 23 in an effort to negotiate an international cocoa agreement.2 Discussions and negotiations toward an agreement have been taking place off and on for the past ten years in various UN forums. The pressure comes mostly from Ghana, Nigeria, the Ivory Coast and Cameroon who account for 75% of world exports and whose economic development and political stability are bound up with cocoa. Brazil, the major producer in Latin America, also wants an agreement.
Since the U.S. accounts for one-third of world cocoa consumption, our participation is essential to any agreement. Our negotiating position, however, is complicated by two conflicting forces:
- a)
- The producers seek more from an agreement than we believe is either necessary or feasible. Unfortunately some consuming countries, led by France, are willing to go much further than we to satisfy them. We would wish to avoid being isolated at the conference or blamed for its failure;
- b)
- We want to work out something that could be acceptable to our cocoa industry. The industry is unenthusiastic in principle about any commodity agreement and it would oppose an agreement of the type which the producing countries, with the support of some European consumers, want. Their representatives will continue to work closely with us during the negotiations. We would have great difficulty with Congressional approval of an international agreement if the industry were opposed.
Among other specific problems, the U.S. may face a financial issue at the conference. We expect to be asked whether the U.S. would make or guarantee a short-term loan of perhaps $10 million to the cocoa organization so that it could begin operations before it accumulated its own funds. France, the Netherlands, the UK and Germany have already said [Page 779] they would consider such loans if all consuming countries participate. We have yet taken no position on this issue but will be under considerable pressure to do so.
We informed the Senate Foreign Relations Committee and the Senate Finance Committee of our participation at the conference3 and had informal discussions with Senators Smathers, Talmadge, and Carlson. We also discussed the negotiations with Chairman Mills and Congressman Curtis of the House Ways and Means Committee. They were all interested in the conference but expressed no firm view favoring or opposing an agreement pending a better idea of its content.
We will keep in close touch with the Congress and your staff as the negotiations go along.
- Source: Department of State, Central Files, INCO–COCOA 3. Confidential. Drafted by Edward R. Fried and Paul E. Callanan (E/OR) on May 20 and cleared by Bashkin (Commerce), Joseph A. Silberstein (ARA), Joseph Palmer (AF), and Solomon (E).↩
- Additional background on the calling of this conference and guidance to posts on the U.S. proposed negotiating position and objectives are in circular telegram 2239, May 14. (Ibid.)↩
- Identical letters to Senators Fulbright and Long, dated May 13, are ibid., INCO–COCOA 4.↩
- Printed from a copy that indicates Mann signed the original.↩