254. Editorial Note

Pursuant to Secretary of State Rogers’ April 9, 1971, memorandum to the President ( Document 253), on April 15 Peter Peterson sent CIEP Study Memorandum No. 4 to the Chairman of the CIEP Operations Group requesting a paper by May 5 that would provide the President with the full range of choices on reverse preferences and GSP eligibility for Hong Kong. (National Archives, RG 59, S/S Files: Lot 82 D 126, CIEP Study Memoranda) Nathaniel Samuels informed the principals of various departments and agencies of the tasking in an undated memorandum that indicated a meeting of the Operations Group would be required. (Washington National Records Center, Department of the Treasury, Files of Under Secretary Volcker: FRC 56 79 A 15, CIEP Study Memoranda)

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The paper prepared in the Operations Group went to Peterson in May, and Ernest Johnston informed Henry Kissinger of its status in a May 20 memorandum, noting the sentiment to fall back from the liberal scheme approved in principle in 1970. Johnston recommended that he inform Peterson that Kissinger wanted the legislation submitted as soon as possible, accompanied by a strong Presidential endorsement for passage, and that Kissinger “adamantly” opposed any retreat from the established position. He also urged Kissinger to make these points when he met with Peterson on May 21. Kissinger checked his approval of these recommendations. (National Archives, Nixon Presidential Materials, NSC Files, Subject Files, Box 402, Trade, Volume III 12/70-6/71)

Johnston and Arnold Nachmanoff revisited the issue in a May 25 memorandum to Kissinger. They pointed out that Kissinger had not objected to Peterson’s (and Samuels’) suggestion that the CIEP/SRG take up preferences after Samuels returned from Europe in mid-June (following the OECD Ministerial). They recalled the President’s strong public endorsements of a liberal preference scheme, said a late June SRG meeting to review the Operations Group recommendations to the President would delay submission of the legislation beyond the July 1 date when the EC preference scheme came into effect, and expressed their belief that delay only increased the chances that those agencies opposed to preferences would have time to bring pressure to undermine the program. Kissinger on May 27 initialed his approval to their recommendation that he call Peterson to persuade him to submit the Operations Group paper promptly to the President. (Ibid.) No record of Kissinger’s actions or a Presidential decision was found.

In a June 28 memorandum to Kissinger with suggestions for topics to discuss during lunch with Peterson the next day, Richard Kennedy and Johnston included the following on preferences: “Peterson wishes to talk with Wilbur Mills before asking for Presidential decisions on the remaining details of our preferences legislation. Peterson is still very nervous about this, and would like to avoid the issue if possible. He gathered the impression from your last conversation that you see no need for rush. Unless you make it clear to Peterson that he should not delay in this exercise, it may well be put off until fall or be seriously crippled by agency attempts to back away from the present Administration proposal. You should urge Peterson to hold his conversation with Mills promptly, to hold together the present Administration scheme and to seek to present legislation to the Congress as soon as possible.” (Ibid.)

On July 2 Johnston prepared a memorandum for Kissinger informing him that he (Johnston) had learned from Peterson’s staff that during a meeting earlier in the week, the President told Peterson that preference legislation should be delayed because of the poor atmosphere in [Page 651]Congress. Peterson reportedly anticipated that the Williams Commission report that was expected shortly would not be helpful on preferences. (Ibid., White House Agency Files, Box 218, CIEP) No record of Peterson’s June 29 meeting with the President was found, but on July 2 Johnston informed Alexander Haig in a memorandum that he had just learned the President had decided to delay submitting the preference legislation as a result of the conversation with Peterson. He suggested that Haig should inform Kissinger, who was traveling, so that he would be able to react before meeting with President Nixon in San Clemente. (Ibid.)

The President traveled to San Clemente on July 6. On July 13, at 7:14 a.m. PDT, he motored by golf cart to the helipad to greet Kissinger who was returning from a fact-finding mission to South Vietnam, Thailand, India, Pakistan, China, and Paris. (Ibid., White House Central Files, President’s Daily Diary)

The preference legislation went to Congress in April 1973; see Document 249.