Foreign Relations of the United States, 1969–1976, Volume IV, Foreign Assistance, International Development, Trade Policies, 1969–1972

118. Memorandum From the Administrator of the Agency for International Development (Hannah) to Secretary of State Rogers¹

Washington, June 18, 1969.

SUBJECT

• Additionality

Two actions are being taken to implement the President’s decision of June 13, 1969 that additionality requirements should be eliminated from our economic assistance programs.²

1. The Assistant Secretary and U.S. Coordinator of the Alliance for Progress, Mr. Meyer, is making the following statement in his address to the Inter-American Economic and Social Council:³

“I should like to announce that we have already decided upon action in one area that happens to be subject to immediate action by the Executive Branch. The President has authorized me to say that, effective immediately, the present practice of applying so-called “additionality” requirements to U.S. economic assistance programs will be discontinued. This action represents the earnest desire of the President and his Administration to improve the effectiveness of our assistance in doing what it is supposed to do: promote development.”

2. I have drafted the following Policy Determination to send to all A.I.D. overseas missions announcing the President’s decision and defining the specific changes in A.I.D. procedures to put it into effect:

Policy Determination: Elimination of “Additionality” Requirements

The President has directed that “additionality” requirements be eliminated from our economic assistance programs.

“Additionality” measures are conditions attached to some types of A.I.D. assistance which narrowly restrict commodities eligible for A.I.D.-financing and require imposition of discriminatory or regressive exchange, import or credit arrangements for the purpose of ensuring that A.I.D.-financed exports are without exception additional to U.S. commercial sales.

A.I.D. will henceforth:

1. Make eligible for procurement a broad range of U.S. goods important to the development of the aid-receiving country, in accordance with existing A.I.D. procurement regulations governing commodity eligibility, which will continue in force.

2. Refrain from seeking discriminatory tariff, credit, exchange and import controls, government-controlled procurement, or other special arrangements for the purpose of attaining additionality of exports beyond the requirements and effects of A.I.D.’s regular tying and procurement procedures.

3. Consider adjustment of existing obligations whose additionality requirements are creating serious difficulties.

John A. Hannah

1. Source: National Archives, RG 59, S/S Files: Lot 83 D 305, NSDM 10. Confidential. Copies were sent to Kissinger and Kennedy.
2. See Document 116.
3. See footnote 2, Document 116.