Foreign Relations of the United States, 1969–1976, Volume II, Organization and Management of U.S. Foreign Policy, 1969–1972

374. Memorandum by President Nixon¹

Washington, January 18, 1971.

MEMORANDUM FOR

• The Secretary of State
• The Secretary of the Treasury
• The Secretary of Agriculture
• The Secretary of Commerce
• The Secretary of Labor
• The Director, Office of Management and Budget
• The Chairman, Council of Economic Advisers
• The Assistant to the President for National Security Affairs
• The Executive Director of the Domestic Council
• The Special Representative for Trade Negotiations

This memorandum establishes a Council on International Economic Policy. I will serve as Chairman with the addressees as Members.² In my absence, the Secretary of State will chair meetings of the Council.

The purposes of the Council are these:

1. Achieve consistency between domestic and foreign economic policy.

2. Provide a clear top level focus for the full range of international economic policy issues; deal with international economic policies—including trade, investment, balance of payments, finance—as a coherent whole; and consider the international economic aspects of essentially foreign policy issues, such as foreign aid and defense, under the general policy guidance of the National Security Council.³

3. Maintain close coordination with basic foreign policy objectives.

An Executive Director will be designated to help the Council in its operations.⁴ He will organize the general secretariat of the Council and be responsible for the staff work. He will have ready access to the President and will initiate projects and call upon staff resources from throughout the Government to augment his own small staff. In collaboration with the members of the Council or designated individuals at the senior political appointee level and pursuant to the directions of the President, his responsibilities will include:

• —Develop the agenda and supporting materials for Council meetings and review all papers going to the Council.
• —Help develop a sense of direction, strategy and relationship of the parts to the whole of this problem area.
• —Establish a work program, including topics, timing and identification of individual assignments and set up task groups on special topics.

An Operations Group will be established, similar to the present Under Secretaries Group but replacing the work of that Group insofar as international economic policy is concerned. Its responsibilities will include:

• —Follow up on decisions reached.
• —Coordination of actions of the Government where that is necessary.
• —Review of operating problems arising out of actions of other Governments or outstanding international economic developments.

The State Department will chair the Operations Group.

Standing or special subcommittees may be added from time to time. To the extent practical the Council shall bring within its structure those existing committees or groups presently dealing within the scope of the Council’s work as set forth above.⁵

Richard Nixon

1. Source: National Archives, Nixon Presidential Materials, White House Central Files, Subject Files, Box 3, Ex FG. No classification marking. The memorandum was released on January 19 and printed in Public Papers: Nixon, 1971, pp. 40–41.
2. On August 9, 1971, the President made the Secretary of Defense a member following extended discussions that are highlighted in Foreign Relations,1969–1976, volume III, Foreign Economic Policy, 1969–1972, International Monetary Policy, 1969–1972, Documents 49 and 61.
3. In a November 18, 1970 memorandum to Shultz, Kissinger stated that he fully concurred in the “basic thrust” of the draft directive setting up the CIEP but had “one substantive problem”—that “it be made clear that general policy guidance on defense and foreign aid will continue to be given by the National Security Council.” At Kissinger’s request the latter part of this paragraph was added. (National Archives, Nixon Presidential Materials, NSC Files, Agency Files, Box 218, Council on International Economic Policy (CIEP), Oct 70–31 Jul 71)
4. In February Nixon appointed Peter G. Peterson the first Executive Director with the title Assistant to the President for International Economic Affairs, a position he held until February 1972, when he replaced Stans as Secretary of Commerce. Flanigan succeeded Peterson as Executive Director. The possibility of moving Peterson to Commerce was considered as early as April 1971 so that Stans could become Chairman of the Finance Committee to Re-Elect the President. (The Haldeman Diaries: Multimedia Edition) The decision was made in mid-November, according to Haldeman’s diary, following a discussion on November 11 of the “Peterson problem and the fact that Peterson says a lot but concludes nothing.” The President “said he felt we should never have set up the Peterson deal to begin with. We should have just put an economic man in the NSC and set up a division there. He thinks that it’s essential now that we have to move Peterson out and put Flanigan in that role, and told me to talk with the Attorney General today about the necessity of doing that and getting Stans out quickly, so we can move Peterson to Commerce.” (Ibid.)
5. In CIEP Decision Memorandum No. 3, April 8, Nixon provided detailed direction for the operation of the CIEP and established a Review Group to review papers for submission to the Council and to assign action to the Operations Group. For text of the memorandum and further documentation on the organization and operation of the CIEP, see Foreign Relations, 1969–1976, volume III, Foreign Economic Policy; International Economic Policy, Document 61.

   Additional documentation is in the National Archives, Nixon Presidential Materials, NSC Files, Agency Files, Box 218–219, Council on International Economic Policy (CIEP). For a discussion of the respective responsibilities of the CIEP and NSC staffs, see Document 147.