353. Memorandum From C. Fred Bergsten of the Operations Staff, National Security Council to the President’s Assistant for National Security Affairs (Kissinger)1

SUBJECT

  • Future of STR

The participants in today’s meeting on the future of STR 2 agreed to disagree. Secretary Stans’ bid to move it into Commerce was supported [Page 776]only by Peter Flanigan, essentially on the administrative ground of reducing the number of independent White House agencies.3 Budget supported State’s proposal that STR remain independent. Ellsworth and I took no position. Burns and McCracken did not make the meeting. Stans reported that Hardin and Labor were willing for Commerce to carry the trade ball for the U.S. Most of the outside groups have come out for continuation of an independent STR.

Ellsworth and the Budget Bureau will now prepare a memorandum for Presidential decision.4 The agencies agreed that the basic issue was whether trade policy should be conducted completely independent of the rest of our foreign policy (Stans’ position) or was intimately related to foreign policy (Richardson’s position, which I might add was presented quite effectively). Other important, but secondary, issues are:

1.
Budget’s view that the “leader agency” concept did not work in practice and hence argued for independent White House leadership.
2.
State’s view (which I share strongly) that foreign and domestic reaction to absorption of STR by Commerce would cast serious doubt on the President’s commitment to a liberal trade policy.
3.
State and Budget’s view that the legislative history, if not the law itself, made the shift highly dubious on Congressional grounds.
4.
Commerce and Flanigan’s view that the number of independent White House agencies should be reduced.

Recommendation

That you recommend to the President at the earliest opportunity that STR be continued as an independent office within the White House.

If he were to decide that it should be lodged in an existing agency, that you recommend that it be given to State.

  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Subject Files, Box 403, Office of the Special Trade Representative. Limited Official Use. Sent for action. Printed from an unsigned copy.
  2. See Documents 351 and 352.
  3. Richardson discussed the meeting with Rogers during a March 18 telephone conversation. According to Richardson, “everyone seemed to be against the move except Stans and PF.” (Notes of telephone conversation; Library of Congress, Manuscript Division, Richardson Papers, Box 104, Telcons)
  4. On March 19 Ellsworth sent the draft memorandum for Presidential decision to Richardson for his comments. (National Archives, RG 59, Executive Secretariat, General Files on NSC Matters, Box 16, NSC/Misc, March 1969) Richardson replied on March 22; see Document 355.