300. Memorandum From the President’s Assistant for National Security Affairs (Scowcroft) to President Ford 1

SUBJECT

  • Report on the Conference on International Economic Cooperation (December 16–19, in Paris)

The Conference on International Economic Cooperation (CIEC), attended by ministers from 8 industrialized, 8 OPEC, and 11 developing countries reached agreement on a basis for beginning the North-South dialogue. They agreed to establish four commissions: energy, raw materials, development, and financial affairs.2 These will enable a serious discussion of key North-South issues and an internal effort to implement our UN Special Session proposals, with a minimum of political confrontation and without pre-commitments on our part to accept developing country positions.

As a result of Secretary Kissinger’s speech3 and meetings with key foreign ministers at the conference, and Undersecretary Robinson’s follow-on discussions and negotiations, five basic US objectives were achieved:

  • —public emphasis on the US desire to pursue a constructive North-South dialogue.
  • —an underlining of our intention to be conciliatory in working toward solutions to developing country problems as well as our expectation that the wealthier OPEC countries would assume their appropriate share of responsibility.
  • —extension to the new industrialized country members of the dialogue (Spain, Sweden, Switzerland, Australia, and Canada) of the cohesion in dealing with LDC problems and in responding to OPEC pressures which had already been established among the US, EC, and Japan.
  • —a strengthening of our bilateral ties with certain key OPEC and developing countries (Saudia Arabia, Iran, Brazil, and Algeria) through meetings with their officials during the course of the conference.
  • —a weakening of the "unnatural" alliance between OPEC and other LDC’s by highlighting the adverse impact of the oil price increase and demonstrating our sympathy for the problems this has caused the poorer nations.

The only acrimonious issue resulted from the desire of some developing nations, notably Algeria, to have another meeting to revise the earlier agreed general Commission guidelines to conform more to the desire of the Third World. We resisted reopening this subject, and agreed only to a meeting of the 8 co-chairmen of the Commission (we co-chair energy) plus the co-chairmen of the conference on January 26 to "review preparation for the work of the Commissions … within the framework of the general guidelines."

As the result of the CIEC, we now have a manageable and relatively apolitical mechanism for dealing with issues between the developed and developing world. Our dependence on these countries for markets and raw materials is increasing. And their political and economic influence is growing. More and more, their prosperity has a positive effect on our growth, and volatility in their exports and imports has a disruptive effect on our economy. A dialogue aimed at achieving mutually acceptable solutions to significant problems, and a sharing of responsibility for an orderly international economy, can be extremely important to the US interests in the coming decade.

While there are widespread doubts as to whether the Commissions (which begin their work on February 11) will achieve anything of substantive significance, without such a dialogue, and without a constructive US contribution to help it succeed, we run major risks. The Europeans and Japanese (who are far more dependent on the Third World than is the US) might attempt to out-flank us in playing up to the developing and OPEC countries. And political and economic tension between us and the Third World would build. Frustrations could lead to an adverse climate for US investment in the Third World, a weakening of trade ties, less reliable raw material supplies and a more hostile political environment.

Through the dialogue the US will be able to pursue a variety of policy options, both bilateral and multilateral, to better secure its economic (trade, investment, and raw materials) and political interests. OPEC and the wealthier developing nations, such as Brazil, will likely be more constructive participants in an orderly world economy. And Third World governments will be able to secure domestic support to move closer to the US on important questions in a way which they would find difficult to do if we did not participate constructively in the dialogue or if the absence of dialogue led to an atmosphere of confrontation.

  1. Source: Library of Congress, Manuscript Division, Kissinger Papers, Box CL 406, Subject File, Conferences, Conference on International Economic Cooperation (CIEC), Paris, France, Dec. 1975, Chronological File, Dec. 1975. Confidential. Sent for information. Scowcroft did not initial the memorandum.
  2. The final communiqué of the CIEC was transmitted in telegram 33158 from Paris, December 19. (National Archives, RG 59, Central Foreign Policy Files)
  3. For the text of Kissinger’s December 16 speech, entitled "Energy, Raw Materials, and Development: The Search for Common Ground," see Department of State Bulletin, January 12, 1976, pp. 37–48.