66. Typescript of Telegram From the President’s Assistant for International Economic Affairs (Peterson) to Secretary of State Rogers in Lisbon1

Eyes Only for Secretary William P. Rogers From Peter G. Peterson. The President has approved the OECD objectives paper submitted by Secretary Rogers on May 29 with the following modifications:2

1.
Under “Our Main Objectives” a new paragraph would be added:

We would seek bluntly and in a hard hitting manner3 in Secretary Rogers’ statement and in other ways to promote better awareness and understanding of the relationship of our military expenditures to our economic and balance of payments position. We would thereby endeavor to begin working toward bringing all of our OECD partners to focus attention on the degree to which defense expenditures made for the mutual benefit are to be taken into account in the OECD’s examination of a member’s economic and balance of payments position. (FYI: The President wants the line taken by Secretary Connally in Munich to be followed by all U.S. representatives.)4

2.
The Section on perspectives on international trade would be clarified by deleting the existing subparagraph (pages 8-9) which contains a reference to “fiscal, monetary and investment matters”5 and by inserting subparagraphs under “The US Views” along the following lines:

The purpose of the group should be to explore trade issues, including tariffs and tariff discrimination, non-tariff barriers, and agricultural policies in the light of the new conditions of the 70’s. The group should seek to develop action program guidelines and to foster the political will to deal with trade problems of common concern, bearing in mind the importance of this activity for non-OECD member countries.

Establishment of the Group would in no way limit the U.S. Government, or any other Government, from pursuing its trade interests and rights in other ways, either bilaterally or multilaterally, including proposing trade or other initiatives in whatever forum considered appropriate.

The U.S. would interpret “trade related matters” narrowly. In particular, the group would be expected to avoid duplication of the fiscal and monetary policy work of the IMF, the Group of Ten, EPC, and WP-3.6

3.
The Assistant to the President for International Economic Affairs will review positions to be taken by the U.S. Representative on the Special Trade Group.
4.
With respect to generalized preferences (page 11) it should be borne in mind that the reverse preference issue is currently being reconsidered within the CIEP.
  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Agency Files, Box 218, CIEP. Confidential; Exdis; Immediate. Drafted by Hinton and initialed by Peterson, Kissinger, and Haig, who also wrote at the top, “LDX’ed to State.” The telegram is a revision of Tab C to Document 65, pursuant to the President’s instructions; see footnote 3 below. No telegraphic text of Peterson’s message was found. The Secretary was in Lisbon attending the NATO Ministerial meeting.
  2. See footnote 2, Document 65.
  3. The expression “bluntly and in a hard hitting manner” was inserted according to the President’s instruction as set out in the June 5 memorandum from Huntsman to Peterson; see footnote 1, Document 65.
  4. According to Huntsman’s June 5 memorandum, the President was referring to Connally’s May 28 speech at the American Bankers Conference in Munich. See Document 155.
  5. The deleted language reads: “The Group should develop guidelines for an action program covering a wide gamut of policy issues posed by the new conditions of the ‘70’s, including tariffs and tariff discrimination, non-tariff barriers, and agricultural policies, as well as related fiscal, monetary and investment matters, [Page 161]bearing in mind the importance of this activity for non-OECD member countries.”
  6. Telegram 9846 from USOECD, June 9, contained Secretary Rogers’ report to the President on the June 7 OECD Ministerial meeting, which he had chaired. Rogers reported that the Group “was given a gratifyingly warm reception” despite U.S. statements that the United States would use it as a forum to seek reductions in agricultural protection and to deal with increased trade discrimination that would result from European Community enlargement. Rogers cited an American news agency’s calling the agreement on the Special Group “a major diplomatic victory for the Nixon Administration.” (National Archives, Nixon Presidential Materials, NSC Files, Country Files—Europe, Box 678, France Volume VIII 4/71-12/71)