188. Editorial Note

On October 3, 1973, the House of Representatives Ways and Means Committee favorably reported out the trade bill. It included a modified JacksonVanik amendment, which placed liberal emigration-related restrictions on the granting of MFN to Communist countries but did not place such restrictions on the granting of credits to those same countries. The bill also included changes in its titles. Title I now covered "Negotiating and Other Authority"; Title II covered "Relief From Injury Caused by Import Competition"; Title III covered "Relief From Unfair Trade Practices"; Title IV covered "Trade Relations With Countries Not Enjoying Non-Discriminatory Treatment"; Title V covered "Generalized System of Preferences."

The following day, President Richard Nixon responded in a public statement that, "In most respects, the bill submitted to the House by the Ways and Means Committee is a highly responsible piece of legislation." But Nixon’s statement also asserted that, "In one important area, however, the committee bill is clearly inadequate. I am deeply concerned [Page 700]about the bill’s failure to provide the tools we need to expand healthy commercial relationships with the Soviet Union and other Communist countries. This Administration is committed to seeking most-favored-nation treatment for the Soviet Union. Indeed, the United States has made a formal commitment to the Soviet Union to seek the necessary legislative approval for such treatment in the firm belief that this is in the best interests of both our countries. Therefore, once again, I strongly urge the Congress to restore the authority to grant nondiscriminatory tariff treatment to all countries." (Public Papers: Nixon, 1973, page 847)

The Nixon administration was divided in its reaction to the revised bill. The President’s Assistant for Legislative Affairs, William Timmons, noted in an October 5 memorandum to White House Chief of Staff Alexander Haig, that "CIEP and STR are convinced that the MFN section is minor when looking at the trade authorities in the over-all measure. They are anxious for the President, staff and Administration to lock in hard behind the Ways and Means Committee version and accept the JacksonVanik amendment as inevitable. On the other hand, I think NSC is much more concerned about the USSR than the trade provisions." (National Archives, Nixon Presidential Materials, NSC Files, Box 318, Subject Files, Congressional, Vol #10, September 73 (2 of 2)) On October 7, President’s Deputy Assistant for National Security Affairs Brent Scowcroft reported on an October 4 staff meeting to President’s Assistant for National Security Affairs Henry Kissinger, noting that Peter Flanigan, the President’s Assistant for International Economic Affairs, "praised the Trade Bill, except for the MFN title. Timmons asked if the President would veto the bill if it did not contain MFN but had no credit restrictions. Flanigan said that was too tough to call this early, but Haig said that the President had indicated that he would; the President had been reluctant to put out the statement on the Trade Bill, even though there was tough language on the MFN title. Flanigan said that if the President vetoed the Trade Bill it would collapse trade negotiations and possibly our European declaration." (Ford Library, National Security Adviser, Scowcroft Daily Work Files, Box 4, 10/1–8/73) On October 3, Timmons concisely identified the dilemma in a memorandum to Haig: "The key decision is will the President sign a very good trade reform bill without MFN authority? Or is the international political consideration so great that he must veto a bill with a JacksonVanik amendment?" (National Archives, Nixon Presidential Materials, NSC Files, Box 403, Subject Files, Trade, Vol. VI, April 8–December 1973)

On October 8, Kissinger spoke with the President over the telephone. President Nixon recounted a conversation he had had with Donald Kendall, President and Chief Executive Officer of PepsiCo, Inc., which included a discussion of MFN for the Soviet Union: "The question came up as to whether the trade bill would come down with the [Page 701] Jackson/ Vanik amendment but with credit in it. I told him if it came in with the credit in it I would veto it. I don’t want to start the MFN if credits are in the trade bill. I will veto it. I would rather not have it. You give that signal out." Kissinger said that he would do so. (Ibid., Kissinger Telephone Conversations, Box 22)