363. Memorandum From Secretary of State Rogers to President Nixon 1

SUBJECT

  • Secretary Stans’ Proposal to Transfer Responsibility for Foreign Economic Affairs to Department of Commerce2

I

Secretary Stans’ proposal would divide responsibility for much of our foreign economic relations by transferring authority and functions [Page 789]from the Department of State to the Department of Commerce, both in Washington and in our missions abroad.

I strongly disagree.

There is a fundamental issue here. It concerns the ability of the Secretary of State to advise the President wisely on foreign policy and to conduct efficiently the nation’s foreign affairs.

The fragmentation of authority and responsibility for foreign relations can only impair the capacity of the Secretary of State. If each Department or agency with an interest in particular aspects of foreign affairs—and they are numerous—were to be vested with responsibility for these matters, the shaping and management of the nation’s foreign policy would be immensely more complicated and more cumbersome than is now the case.

II

Secretary Stans’ specific suggestion for Washington is to take from the Department of State the functions and personnel dealing with foreign economic policy, leaving to State responsibility for political and diplomatic relations.

But economics are politics. Elliot Richardson and I have noted over the past 15 months that the problems coming to us are more often than not economic issues. They are always complex and contentious. I could not operate without a qualified and specialized economic staff. I need experts who both understand the economics of an issue and are able to judge its merits in the light of our total foreign policy objectives; who can evaluate the economic consequences of a proposed course of action as well as the political-military fall out; who can initiate new economic policies or suggest modifications that will achieve the ends sought by other agencies and yet reduce the foreign policy costs or enhance the foreign policy gains of an action.

There is of course a well articulated structure, culminating in the National Security Council, for coordinating foreign economic policy among the Washington agencies. The Department of Commerce has a voice and role in the coordination process, where its skills, experience, and points of view are regularly and fully reflected. I do not believe that the existing system precludes or limits in any way consideration of Commerce positions on foreign policy issues.

III

Secretary Stans also would transfer from the Department of State to the Department of Commerce responsibility for the economic/commercial staffs in our missions overseas.

The function of these staffs is to advance our foreign economic policy interests and to promote the general and specific interests of American [Page 790]business abroad. They can carry out their many and varied activities—including representation, negotiation, business services, export promotion—most efficiently as an integrated staff under single management, responsible to the Ambassador, and through him serving the whole complex of Washington agencies to whom they look for backstopping and guidance.

In respect of the commercial work abroad, the Department of Commerce has an important supporting role, and officers concerned specifically with trade promotion are in some cases drawn directly from Commerce.

But the work of the economic/commercial staff covers the whole spectrum of our economic relations with the host country. To transfer authority over these staffs to the Department of Commerce would make the task of our Ambassadors far more difficult than it already is, and deprive the Secretary of State of effective leadership in the conduct of a major element in our foreign relations.

Even to break out a part of these integrated teams would materially affect their efficiency and morale. We have inherited too much fragmentation in the field already. I certainly do not favor further fragmentation.

IV

The organization of our economic/commercial sections has been looked at in detail a number of times in response to the wish of the Department of Commerce to have more direct control over trade promotion activities. On each occasion the judgment has been that an integrated organization, responding to and through the Ambassador, is more effective and efficient.

It is pertinent to note that nearly every other major trading country organizes its foreign service as we do. The British were an exception with an independent commercial service under the Board of Trade but they have given it up in favor of unification; and the Canadians, who have long been reputed to have the best commercial service of all the principal trading nations, are changing to a unified foreign service. In both cases, the decision to unify was taken because a separate commercial service not only brought organizational inefficiencies but also because its existence caused Ambassadors and senior diplomatic officers to give insufficient attention to business interests.

V

The comments I have had from the business community have been pretty uniformly complimentary about the improvement in the performance of the Foreign Service over the past few years. But I agree that there may be more to be done. I am proposing to have a group of [Page 791]businessmen take an outsider’s look at a representative sample of our embassies and consulates and to give us recommendations for changes in the structure or emphasis of our economic/commercial work abroad. Also, as a part of Deputy Under Secretary Macomber’s overall review of the Department and the Foreign Service, we are examining what should or might be done to create more attractive careers for our economic and commercial officers. The content of our review is indicated in the attached draft of a letter I propose to send to our Ambassadors on the trade promotion effort.3

William P. Rogers
  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Agency Files, Box 213, Dept of Commerce, Vol. I, 1970. No classification marking. Rogers sent a copy to Stans under cover of a May 15 memorandum in which he sought to “underscore the strong feelings I hold on the subject. Simply stated, I could not efficiently advise on and carry out this nation’s foreign policy if my authority and responsibility were fragmented in this manner you suggest.” (Ibid., RG 59, Central Files 1970–73, ORG 1 COM–STATE)
  2. Document 362.
  3. Attached but not printed.