204. Memorandum From the Special Representative for Trade Negotiations-Designate (Gilbert) to President Nixon1
- Minimum Trade Legislation Package
The drafting process for new trade legislation, the responsibility for which has been assigned to this office, is proceeding well. My participation in this process thus far, not having been aboard when the decision was made on the contents of a “bare minimum” package,2 leads me to urge the consideration and inclusion of three further matters.3 These are:
1. Authorization for NTB-Type Negotiations
In view of the fact that the United States has laid such great emphasis on the importance of nontariff barriers (NTBs) here at home, in Secretary Stans’ two missions, and in the GATT, I believe it would be a mistake not to seek some form of negotiating authority to deal with NTBs in this legislation. Any Administration proposals at this time which do not include some provisions in this area, moreover, will face Congressional criticism, there being many on the Hill who feel this is the principal area for future trade liberalization.
Failure to seek authority to negotiate or in some other way to begin to pave the way for future efforts would indicate both at home and abroad that we are less concerned about NTBs than our previous action and talk have indicated. Moreover, coming to grips with this problem rather than putting it off indefinitely would be a clear affirmation of your own determination to move ahead toward freer trade.
Finally, it is conceivable that a “minimum” package might be the only feasible trade legislation which could be obtained during the first term of your Administration. As such, it should be adequate to carry out your policies over this period.[Page 528]
As a practical matter, authority of some sort should also be easier to obtain in a package bill appealing to a wide variety of interests than as a separate bill. We could determine the specific form of authority to be sought only after consultation with Ways and Means Committee and Finance Committee leaders. It could involve, for example, legislative agreement that the Executive should negotiate for reduction or elimination of nontariff barriers on an ad referendum basis, or it could involve a delegation of power to enter into agreements subject to legislative veto. I have already mentioned to Chairman Mills and to Senators Long and Talmadge that this problem of legislative authority to negotiate on matters other than tariffs would eventually be a problem on which I would like to return to them for advice.
This issue, while posed in the NSC background paper on trade policy, was not in the end put before you when trade legislation was reviewed. I recommend that it be reconsidered and that I be authorized to consult with key Congressmen with a view of developing a legislative proposal.
2. Limitation on Use of Proposed Tariff-Cutting Authority
I find that your earlier decision on tariff-cutting authority is now generally interpreted that any new authority would be limited to providing compensation when required. I visualize the possibility that limited use of this authority for other purposes could prove to be invaluable, e.g., to round off reciprocity in an NTB negotiation. I, therefore, believe it would be wise to limit the use of the authority sought only by a provision that it was not to be employed as authority for a general, multilateral negotiation. I see no need to further limit your options in advance in this area.
I recommend that this limitation be clarified or reconsidered in the light of the above comments.
3. Authority to the President to Withhold MFN in Whole or in Part to a Country or Countries Which the President Found Had Failed Fully to Participate in a Reciprocal Negotiation
It has always troubled me that the President had no power to withhold MFN and that our trading partners knew this to be the case. I understand that the Japanese took advantage of this situation along toward the close of the Kennedy Round.
The exercise of the power by the President might require a GATT waiver and certainly would be exercised only with restraint but to leave the President’s hands tied so that he had no power to withhold MFN has seemed to be a mistake.[Page 529]
Incidentally, I believe that a provision of this sort would also add some political appeal to the legislative package.
I recommend that the inclusion of such a provision in the trade bill be considered by the NSC task force preparing the proposed legislation.
- Source: National Archives, Nixon Presidential Materials, NSC Files, Subject Files, Box 401, Trade General, Volume I. No classification marking.↩
- The decision was made at the April 9 NSC meeting; see Tab A to Document 195.↩
- Attached is a June 24 memorandum from Burns to the President that reads: “I have finally reviewed Carl Gilbert’s proposed additions to the pending trade legislation, and I find each of them desirable.”↩