79. Memorandum From the President’s Assistant for International Economic Affairs (Peterson) to the Members of the Council on International Economic Policy 1

MEMORANDUM FOR

  • The Secretary of State
  • The Secretary of Treasury
  • The Secretary of Defense
  • The Secretary of Agriculture
  • The Secretary of Commerce
  • The Secretary of Labor
  • The Ambassador-at-Large David M. Kennedy
  • The Director, Office of Management & Budget
  • The Chairman, Council of Economic Advisers
  • The Special Representative for Trade Negotiations
  • The Assistant to the President for Domestic Affairs
  • The Assistant to the President for National Security Affairs

SUBJECT

  • Council Work Program

The President has directed the implementation of the detailed work program for the Council on International Economic Policy, as reviewed at the September 7, 1971, CIEP meeting.2

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Within the next few days, we will be sending you a CIEP Study Memorandum with terms of reference of each project.

Timing of Legislative Proposals

Until significant progress is made on exchange rate realignment and negotiations related to the removal of the surtax, it may not be appropriate to submit important foreign economic and trade legislation. Presently, there is great uncertainty as to how long these negotiations will take. We are to work on the assumption that we should have in the President’s hand a comprehensive outline of positive legislative recommendations by year end. Also, we should have defensive or contingency legislative plans in case the Labor Union’s programs make major progress in Congress. Another consideration in this timing is the State of the Union Message. We are to assume further that the question of America’s position in the world economy will continue to be sufficiently important to warrant emphasis in that message. For these reasons, we are directed to adhere to the schedules as outlined in the work projects.

Work Program—Major Elements

1. Planning a series of major bilateral negotiating initiatives—Japan (already completed), Canada, and EC—as well as multilateral initiatives at the OECD, GATT, and UNCTAD.

2. Defining specific policies and programs on foreign investment policy (particularly technology transfer, expropriation, multinational corporations and stimulating foreign investment in the U.S.).

3. Major programs on adjustment assistance for impacted industries.

4. Intensified export promotion program (incentives, financing, East-West trade, trading companies, antitrust, etc.).

5. Trade legislation contingency plan (labor unions are pushing ahead vigorously).

6. U.S. competitiveness, growth and productivity in the 70s. (Attached are copies of the charts used during our Council meeting to refresh your memories on the specifics.)3 It turns out these programs are essentially domestic in nature since, without a strong domestic economy, it will be very difficult to have a strong, outward-looking foreign economic policy. This also emphasizes the importance of emphasizing concern with job effects of our programs, since concern over loss of jobs due to imports and foreign investments is obviously an increasingly important issue. On most of these points, the Council’s role will be to define and [Page 196]stimulate rather than to implement. Thus, we have and will continue to work very closely with the Domestic Council on most of these projects.

a.
Enhancing U.S. industrial technological position. (This is nearly ready for Presidential review.)
b.
Antitrust—( John Ehrlichman has work well along on this, though we have inputs to make on the international competitiveness aspects).
c.
Long-term energy and raw material position, including technological development of raw material substitutes.
d.
One hundred million jobs by the end of the next ten years—(U.S. manpower and educational policies).
e.
Projecting the future development of U.S. economy in this decade—including the kind of industrial manufacturing and employment base the U.S. is likely to have (in basic sectors—steel, automobiles, electronics, etc.), the U.S. wants to have, and what price we are willing to pay for it.

Other Programs

7. These include such subjects as the development of improved government information systems on international economic performance, and improved organizational structure.

Outside Consultants

8. Because of the importance and complexity of these subjects, and the unique value of outside experience and inputs on most of them, the President has asked that a special effort be made to attract the best outside talent from business and universities to work on the various projects. We request that, prior to naming any specific consultant, a list of proposed consultants be sent to my office.

There is of course opportunity provided for the working groups to suggest additional terms of reference for each project, as well as to suggest specific priorities for the projects.

I would appreciate your assigning your best people to this effort and emphasizing the importance of meeting these deadlines. With the President’s initiatives of August 15, we may well be in a unique position to put forward a positive foreign economic legislative program, something that seemed very unlikely even a few months ago.

Peter G. Peterson
  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Agency Files, Box 218, CIEP. Secret. Attached to an October 5 memorandum from Hormats to Kissinger summarizing the memorandum.
  2. Members of the CIEP were invited to the September 7 meeting under cover of an August 30 memorandum from Peterson informing them its purpose was to review the current status of the CIEP’s work program and to discuss priorities for the future. (Ibid.) The President chaired the meeting from 8:33 to 10:35 a.m. on September 7. (Ibid., White House Central Files, President’s Daily Diary) Attendees included Rogers, Samuels, Connally, Volcker, Laird, Hardin, Stans, Hodgson, Kennedy, Shultz, McCracken, Gilbert, Ehrlichman, Haig for Kissinger, Peterson, Allen, Hinton, Webster, and Hormats. See also Document 174.
  3. Several lists of items related to this topic are attached (none printed) but no charts were found.