249. Editorial Note
During 1969 and 1970 trade policy was systematically considered at the highest levels in the Nixon administration, including NSC, NSC Review Group, and Senior Review Group meetings. There were no NSC and SRG meetings on general trade policy matters during 1971 and 1972, however, and no NSDMs on general trade policy issues. The newly-established CIEP replaced the NSC as a forum for high-level attention to trade issues.
By the beginning of 1971, a number of broad decisions on issues such as
preferences and the general thrust of trade policy had already been
taken. In addition, the Williams Commission on International Trade and
Investment Policy was due to submit its report in mid-1971, and many
items were on hold pending its recommendation. Trade negotiations were
also linked closely to the international monetary policy negotiations
that dominated much of the foreign economic policy agenda during the
last half of 1971 and 1972. For documentation on U.S. international
monetary policy, see
Foreign Relations, 1969-1976, volume III,
Documents 109 ff.
The trade policy agenda turned to developing legislation that would support far-reaching trade negotiations, an exercise that culminated in the Trade Reform Act of 1973, transmitted to Congress on April 10, 1973. See Department of State Bulletin, April 30, 1973, pages 513-522, and Public Papers of the Presidents of the United States: Richard Nixon, 1973, pages 258-270. This message proposed the enabling legislation that permitted the United States to participate in what became known as the Tokyo Round of trade negotiations under GATT auspices (the successor round to the Kennedy Round in the 1960s), and established a Generalized System of Preferences (GSP) for developing countries. Congress completed action on this legislation in December 1974, and President Ford signed the Trade Reform Act of 1974 on January 3, 1975. (P.L. 93-618; 88 Stat. 1978)
On textiles, bilateral textile discussions were underway with Japan and other Asian exporters, generally under the tutelage of Ambassador at Large David Kennedy. According to a September 21, 1971, memorandum from Peter Peterson to the President, on August 15, during the New Economic Policy discussions at Camp David August 13-15, the President had decided that if a voluntary textile agreement was not reached by October 15, he would impose a settlement under the Emergency Banking Act Amendment of the Trading with the Enemy Act. Pursuant to that decision, a “preparatory” Balance of Payments Emergency Proclamation was drawn up on August 16. (National [Page 639]Archives, Nixon Presidential Materials, NSC Files, Agency Files, Box 218, CIEP)
Responding to a question regarding the purported October 15 deadline during his press conference on October 8, 1971, President Nixon said that if there were no agreement or prospects for concluding one by October 15, the United States would act unilaterally. (Public Papers of the Presidents of the United States: Richard Nixon, 1971, page 1036) Kennedy did, in fact, conclude an agreement with Japan on October 15, as well as agreements with Korea, Taiwan, and Hong Kong on or about that date. These voluntary agreements were announced at a press briefing at the White House on October 15. (Weekly Compilation of Presidential Documents, October 19, 1971, pages 1408-1409) During the briefing Peterson said that the long-term solution to the problems in the apparel industry world-wide was negotiation of an international all-fiber agreement. The focus of the discussion in 1972 and beyond moved into a multilateral context, with renewal of the Long-Term Agreement (LTA) on cotton textiles and negotiation of a multi-fiber agreement.
On March 3, 1972, President Nixon issued a directive establishing a Special Working Group of the CIEP, chaired by Ambassador Kennedy, for textile trade policy. Among its duties the Special Working Group was to provide guidance to the Commerce-chaired Committee for the Implementation of Textile Agreements with respect to U.S. rights and obligations under the LTA regarding cotton textiles, and to develop policy proposals for negotiation of additional bilateral and multilateral textile agreements. (Department of State Bulletin, April 10, 1972, page 545)