195. Action Memorandum From the President’s Special Assistant for National Security Affairs (Kissinger) to President Nixon 1

SUBJECT

  • Actions Resulting from National Security Council Meeting of April 9, 1969
  • At Tab A is a list of actions indicated during the NSC meeting of April 9 on U.S. Trade Policy. The list of actions has been coordinated on an “Eyes Only” basis with the principals and has been agreed to by them. It will be retained for record purposes.
  • At Tab B is an NSSM reflecting your decision to continue our internal study of trade.2
  • At Tab C is an NSSM providing for further study of the proposal for generalized tariff preferences for less developed countries.3

Since the steps to implement the remaining actions contained in Tab A will be accomplished through the submission of a legislative program, preparation of which is under way, I do not believe a formal Decision Memorandum should be promulgated, especially since you will wish to retain some flexibility as to details of the legislative program.

Recommendation

Recommend approval of:4

1.
the list of actions at Tab A,
2.
the NSSM on the internal study of trade,
3.
the NSSM providing for further study of the proposal for generalized tariff preferences for less developed countries.

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Tab A5

Actions Resulting From the NSC Meeting on Trade, April 9, 1969

The President reiterated his commitment to free trade and decided that new trade legislation in 1969 should provide him with limited authority to reduce tariffs, should liberalize the escape clause, should liberalize the conditions required for adjustment assistance to businesses and workers dislocated by imports, and should eliminate the American Selling Price (ASP) method of valuation for imposing tariffs. The legislation is to be ready for submission this Spring.

The President also decided that a commission would be created to review the entire range of trade and production relationships among countries. The terms of reference for the commission should be considerably broader than for any such study in the past. It should report its findings and policy recommendations six to twelve months after its appointment. The President indicated that the commission should have a strong staff and a prominent chairman who was not unduly identified with a particular point of view. The formation of the commission should be announced this spring, perhaps in conjunction with the announcement of the new legislative package.

In discussing the position Secretary Stans would take in his upcoming trip to Europe, the President assented to his raising in low key with the Europeans the possibility of convening a meeting in June, under GATT auspices, to discuss the problems of world trade in synthetic and woolen textiles and methods of restraining the growth of such textile imports into the United States. Secretary Stans should emphasize the political difficulties a sharp growth in textile imports is causing in the United States, and the threat it poses to the liberal trade policy the Administration wants to pursue. The President indicated the desirability of drawing public attention to the strong sentiments for protection now prevailing in Congress, either through featured articles or through a publicized meeting of Congressmen with Secretary Stans.

As an indication of his desire to move in the direction of more liberal trade, the President authorized Secretary Stans to assure the Europeans, without publicity, of the intention of the Administration soon after his return to submit new interim trade legislation and to create a blue-ribbon commission to review the future of U.S. trade and production relations with its major trading partners.

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On the question of tariff preferences to developing countries, the President instructed Stans to indicate, when asked, that his Administration maintains an open-minded position although it will not be able to make any firm commitments until further study is completed. The scheme would appear to have a small effect on the U.S. but could mean a great deal in our political relations with the less developed countries. The Secretary should seek to avoid letting the Europeans reject the approach and should seek to keep it open.

The President also asked Secretary Stans to listen attentively to the European position on East-West trade and indicate that the U.S. is re-examining its position on the matter. His own disposition is that some of our present restrictions are outmoded but he wants to save any relaxation for possible bargaining with the Soviet Union in a broader political context.

The President indicated that the Administration should take greater cognizance of the problems of U.S. businessmen and their concerns abroad, even when ultimately they may have to be over-ridden by foreign policy considerations. The business community should be convinced that its interests are adequately represented by the Government.

  1. Source: National Security Council, Secretariat, Box 83, 4/9/69 NSC Meeting-US Trade Policy. Confidential.
  2. Not found, but presumably a draft of NSSM 49, Document 199.
  3. Not printed; it is a draft of NSSM 48, Document 198.
  4. The President initialed approval of all three recommendations.
  5. Confidential; Eyes Only. The text is virtually identical to that circulated under cover of an April 10 memorandum from Kissinger to Laird, Stans, Hardin, Rogers, Wheeler, Helms, Lincoln, Volcker, McCracken, and Gates. (National Archives, RG 59, S/S Files: Lot 71 D 175, April 9 NSC Meeting)