217. Memorandum From the President’s Assistant for National Security Affairs (Kissinger) to the President’s Assistant (Harlow)1
- Timing on Submission of the Trade Bill
In my memorandum of October 8 to the President on the trade bill,2 I said that after his decision on substance you wished to consult with Congress on timing.
I understand that you wish to delay submission until after the New Jersey gubernatorial election because of the effect on the chemical industry of our asking for elimination of ASP.3 I cannot of course make a judgment on that election, but I urge early Presidential submission of the bill for the following reasons:
- We have not gotten far on textile restraints. Much of the foreign opposition lies in fear that textiles is only the beginning of our restraint efforts and that other products will soon follow. The bill and the message will dispel that as no diplomatic statements can, and will thus make a major contribution to getting a textile agreement. In addition, the message will make crystal clear that the President is serious on textiles. Sato meets the President in November and our best chance to line up the Japanese is between now and then.
- Business is angry over foreign non-tariff barriers. This Administration must show that it takes this issue seriously. The message does that. More important to the timing issue, we have now brought GATT consideration to a head. If at the October 20 GATT meeting on NTB’s we cannot show that the U.S. intends to move on this, momentum will be lost and our position will lose all credibility.
- The ASP agreement will lapse unless we get foreign concurrence before January 1 for its further extension. If the bill is not submitted well before that time—and we are already within three months of the deadline—our arguments for getting this extension will be weak, since it will not look as though the Administration is serious. This is the most serious U.S. trade barrier in foreign eyes and would seriously hurt our overall foreign policy, especially in Europe. A collapse of ASP will also wreck our NTB efforts.
- Early this spring, Secretary Stans promised European leaders that the President would be submitting a bill soon. The President instructed the Secretary to do so at the NSC meeting on trade. Our credibility with the European Governments is thus at stake. Continued delay is also allowing European protectionists to argue effectively that this country is lapsing into protectionism so Europe may as well move in the same direction. We must reverse that direction soon, or moves and counter moves in trade will jeopardize our exports, especially of agricultural products, and poison our relations with a number of countries.
- Delay in forming a Trade Study Commission to work on our future trade policy will delay its report. We cannot move on this until the President announces it in his message. UK accession to the Common Market and basic changes in the Market’s protectionist Common Agricultural Policy may require U.S. decision in the late spring. These have major foreign policy implications. Without a Commission report and a decision on how we are to take advantage of these changes, the U.S. also stands to lose heavily in its exports—again, especially in agriculture.
- The President and the Congress have no credible response to quota pressures until submission of this bill proves that the Administration intends to relax the escape clause and adjustment assistance. The resultant pressures for quotas jeopardize our foreign relations with numerous key countries in Europe, Japan, Korea, Taiwan, etc.
- The new retaliatory provisions in the bill will give strong public evidence that this Administration will adopt a new and tougher stance in defense of our trade rights. We need this now to retain business and labor confidence.
- Source: National Archives, Nixon Presidential Materials, NSC Files, Subject Files, Box 401, Trade General, Volume I. Limited Official Use. Drafted by Bergsten presumably before October 20 since it refers to the GATT meeting on that date.↩
- Document 213.↩
- On October 18 Harlow sent a memorandum to the NSC Staff Secretary reporting that Chairman Wilbur Mills and John Byrnes, senior Republican on the Ways and Means Committee, who were both favorable to the trade legislation, strongly recommended that the legislation be postponed, possibly until after the State of the Union address in the new year. They thought there was no prospect for Committee action during 1969, and were concerned about lobbying pressure if it were sent forward and allowed to languish for 3-4 months. Harlow recommended delaying the legislation at least until November 10, and then consulting with Mills and Byrnes on timing. In the meantime he recommended Kissinger send the NTB themes to U.S. representatives in Geneva as a basis for their October 20 discussions at GATT. (National Archives, Nixon Presidential Materials, NSC Files, Subject Files, Box 401, Trade General, Volume I)↩