Foreign Relations of the United States, 1969–1976, Volume E–10, Documents on American Republics, 1969–1972

23. National Security Decision Memorandum 39¹ ²

Washington, January 29, 1970

TO:

• The Secretary of State
• The Secretary of Treasury
• The Secretary of Commerce
• The Secretary of Agriculture
• The Administrator, Agency for International Development
• The Chairman, NSC Under Secretaries Committee

SUBJECT:

• U.S. Position for the Special Meetings of the Inter-American Economic and Social Council

The President has made the following decisions, in addition to those set forth in NSDM 37, with regard to the U.S. positions for the IA–ECOSOC meeting at Caracas:

1. Standstill Commitment for Latin America. The President has approved a restatement of the existing GATT standstill commitment for Latin America as recommended in proposal 3 of the Under Secretary’s memorandum of January 21. He has authorized the U.S. Delegation to incorporate the commitment, as stated in the memorandum, in an IA–ECOSOC document as appropriate.

2. Untying of Local Currency Loans. The President has approved the proposal by Dr. Hannah (contained in his memorandum of November 21, 1969) that AID institute complete untying of its local currency loans in all Latin American countries, including those receiving program loans. The President has also approved Dr. Hannah’s recommendation of January 2, 1970, that similar action be taken with respect to the U.S. contribution to the Fund for Special Operations of the Inter-American Development Bank, and he has authorized the U.S. Delegation to make announcement of these positions at the IA–ECOSOC meeting.

3. Componentry Rule—AID UntyingWith regard to proposal seven in the Chairman’s report submitted by the Chairman of the NSC Under Secretaries Committee on January 21, 1970, the President has approved adoption of a 50/50 test of origin for Latin American products financed under AID loans to Latin America, but he has decided to retain the 90/10 test of origin for United States products financed under such loans. AID should continue to assure that waivers of the 90/10 rule are granted as appropriate for US products which are traditionally dependent on higher than 10% imported componentry.

The President has authorized the NSC Under Secretaries Committee to coordinate Congressional consultations on the decisions set forth in NSDMs 37 and 39, as appropriate.

Henry A. Kissinger

1. Source: National Archives, Nixon Presidential Material, NSC Files, NSC Institutional Files (H-Files), Box H–213, NSDM Files, NSDM 37. Confidential. Copies were sent to the Secretaries of Defense, Labor, and Interior, the Administrator of AID, the Chairman of the NSC Under Secretaries Committee, the Director of Bureau of the Budget, the Chairman of the JCS, the DCI; the President of the EXIM Bank, the Special Representative for Trade negotiations, and the Chairman of the CEA. Hannah’s November 21 memorandum to Nixon is printed as Document 14 in Foreign Relations, vol. IV, 1969–1976, Foreign Assistance, International Development, Trade Policies, 1969–1972. The NSC Under Secretaries Committee issued its report on January 21. (Ibid., Department of State, National Security Council Under Secretaries Committee Decision Memorandum, 1969–1977: Lot 83 D 276, NSC U/DM 25)
2. President Nixon approved the existing GATT standstill commitment for Latin America, the untying of local currency loans, and the componentry rule for untying AID-financed loans for the upcoming Special Meeting of the Inter-American Economic and Social Council.