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

210. Action Memorandum From the Assistant Secretary of State for African Affairs (Newsom) to the Deputy Under Secretary of State for Economic Affairs (Samuels)¹

Washington, September 20, 1969.

SUBJECT

• Tariff Preferences for Less Developed Countries

Discussion:

The revised draft memorandum on tariff preferences,² in our view, conceals difficult problems this proposal will raise for us in our relations with most of the forty LDCs in Africa. This approach surprises us because Mr. Westerfield raised these issues in the Under Secretary’s meeting on September 4 and understood that the proposal would reflect our views.³ We received the revised draft only a few minutes before the meeting and advised E by telephone that we had reservations and would give you a memorandum explaining them.

Serious problems for U.S. relations with most African countries would result if we set as conditions for a generalized scheme the elimination of special preferences and reverse preferences.

The 25 African countries which enjoy or have negotiated special preferences with the EC would resist fiercely any generalized preference scheme which was conditioned on the abandonment of special preferences. As post-colonial countries whose export crops were built up on the basis of preferences in the metropole, they still depend on preferential access to Europe, although the level of EC preferences has been dropping. In addition, 18 of these countries receive substantial aid from the EC as such (over $918 million is to be provided between now and 1975). These are real advantages which no conceivable generalized system can match, since most African products would not be covered by a generalized scheme. The Africans would almost certainly also regard as unacceptable a U.S. requirement that to qualify for generalized preferences they would have to abandon reverse preferences. They consider these reverse preferences as the price they pay for preferences in the EC, and if compelled to choose between upsetting the special preferences on tropical products and qualifying for generalized preferences on goods which they do not produce they would opt for the former, and resent being forced to do so. The difficult policy problems of special preferences and reverse preferences have no apparent ready solution, but possibly with time and imagination formulas can be worked out which would protect our interests in Africa without impairing the elaboration of a forthcoming generalized preferences scheme.

Recommendation:

We believe that the President should be aware of the problems for Africa when he considers recommendations for generalized preferences, and to that end we propose the following two changes in the draft memorandum.

[Omitted here are two specific drafting suggestions geared to insertions or deletions in the September 18 draft memorandum to the President.]

1. Source: National Archives, RG 59, S/S Files: Lot 80 D 212, NSSM 48. Limited Official Use. Drafted by W.H. Drew (AF/I) on September 19. Copies were sent to Witman (AF/I) and Trezise. Newsom sent a longer version of this memorandum to Samuels on December 17. (Ibid., S/S Files: Lot 83 D 305, NSDM 29)
2. Reference is to a September 18 draft of Richardson’s October 8 memorandum to the President; see footnote 1, Document 214.
3. See also Document 193.