171. Memorandum From the President’s Deputy Assistant for National Security Affairs (Scowcroft) to the White House Chief of Staff (Haig)1

Following our conversation on export controls, Shultz called me. It turns out that the foreign policy implications go far deeper than just export controls.

As Shultz explained it to me, in order to put restraints on agricultural commodity exports, the Secretary of Agriculture must make a finding that the commodity is in short supply. Conversely, in order to provide commodities under PL 480, Agriculture must declare that the commodity is in adequate supply. This latter finding is the currently operative one. In order to apply export controls, therefore, that finding must be withdrawn and replaced with the short supply finding. This, of course, would immediately stop the PL 480 program in those commodities being controlled.

I have prepared an input to Shultz’ overall package, but in the time available it is not very adequate. It is obvious, however, that adding [Page 647]the impact of the cessation of the PL 480 program to that of an export control program creates a foreign policy disaster.

I described to Henry what was going on2 and have just received the following cable: "I agree with you completely on absolute necessity that we have foreign policy clearance over agriculture export control proposals, also over any other aspect of economic package that has any foreign policy impact. Please tell Haig it is essential that President has our input before any decision is made."

I trust that you will ensure us an adequate input on foreign policy aspects before decisions are made. At this point, we know so little about what is being planned that we cannot even intelligently prepare ourselves.

  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 290, Agency Files, U.S. Treasury, Vol. III, Jan. 1972–Sept. 18, 1973. Secret; Eyes Only. According to another copy of this memorandum, it was sent by LDX to Haig in Key Biscayne, Florida. (Ford Library, National Security Adviser, Scowcroft Daily Work Files, Box 3, 6/8–12/73) Haig was in Key Biscayne with the President.
  2. In a June 9 message to Kissinger in Paris, Scowcroft wrote about the possible imposition of agricultural export controls: "I called Haig to find out if that consideration was still active and if any steps on our part were needed. He said that the overall measures being considered were severe and that export controls would probably have to be included." Scowcroft related that Shultz later telephoned to tell him "that the economic package would include strong measures to hold down commodity prices. This move, in view of rising world prices, would result in the stimulation of commodity exports if controls were not imposed." Scowcroft explained to Kissinger the implications of export controls for P.L. 480 and noted NSC preparation of material for inclusion in Shultz’s briefing package for the President. Scowcroft concluded, "As near as I can discern, had I not called Haig to find out what was going on, this entire issue would have been resolved without any input whatsoever from us." (Ibid.)