166. Information Memorandum From the Director of the Policy Planning Staff (Lord) to Secretary of State Kissinger 1
How Foreign Economic Policy Might Be More Effectively Organized
Foreign economic policy is a problem area not only in terms of substance but of organization as well. Aside from the inherent difficulties of economic policies cutting across domestic and foreign interests, and varying in circumstance from one part of the world to another, there has been a particular lack of clarity about the State Department role in this field. The Treasury, the Office of the Special Trade Representative (STR), Commerce, and White House staffs have all staked out claims to primacy over certain aspects of foreign economic policy, while State’s role has steadily waned.2 The result has been fragmentation, lack of direction, and often economic issues being decided on essentially a technical or domestic basis alone.
To orient you better as to how State—and the Executive Branch in broader terms—might improve the formulation and implementation of foreign economic policy, I asked Ernie Preeg, a member of my staff, to lay out various possibilities for changes in the organizational structure in this field. Ernie has had long and varied experience in economic work and is particularly well qualified to think this subject through. The attached memorandum is the result. This is strictly an in-house effort and has not had the benefit of comments from others in the building. I think it provides useful grist for discussions you will want to have with your top people on these issues.
While the memorandum is basically a neutral exposition of various options, I would oppose the suggestions pointing toward a [Page 571]semi-autonomous Department of Foreign Economic Affairs, even if it were under your broad jurisdiction. Rather, I believe we should be moving toward greater integration between the economic and the non-economic aspects of foreign policy, and, more specifically, giving greater political direction to economic policies.
- Source: National Archives, RG 59, Records of the Policy Planning Staff, Director’s Files (Winston Lord) 1969–77, Entry 5027, Box 346, Chronological Files, November 1973. Limited Official Use. Kissinger had been confirmed by the Senate as Secretary of State on September 21.↩
- For more on the rivalry between the Department of State and the Department of Commerce for control over various aspects of international economic policymaking during the Nixon administration’s first term, see Foreign Relations, 1969–1976, vol. II, Organization and Management of U.S. Foreign Policy, 1969–1972, Documents 349, 351–356, 358, and 361–368. In February 1972, President Nixon directed the Office of Management and Budget to prepare a study of U.S. economic and commercial representation overseas. Following the study’s completion in April 1973, Nixon announced on May 29 that the Department of State and the Foreign Service would retain their existing responsibilities for representing the country’s economic and commercial interests and that he would “continue to look to the Secretary of State” to oversee these activities at Embassies and Consulates. For the text of Nixon’s announcement, see the Department of State Newsletter, June 1973, p. 6.↩
- Limited Official Use.↩
- C. Douglas Dillon served as Under Secretary of State from 1959 to 1961.↩