Foreign Relations of the United States, 1969–1976, Volume E–11, Part 1, Documents on Mexico; Central America; and the Caribbean, 1973–1976

17. Transcript of a Staff Meeting of the Under Secretary of State for Political Affairs (Sisco)¹

Washington, June 21, 1974, 3 p.m.

Under Secretary Sisco’s Principals’ and Regionals Staff Meeting, Friday, June 21, 1974, 3 p.m.

[Omitted here is material unrelated to Latin America.]

pp 18–22 Countervaility Duties against Argentina and other countries. The threat of Treasury actions without prior consultation.

[Omitted here is material unrelated to Latin America.]

George S. Springsteen

Exceutive Secretary

[Omitted here are discussions unrelated to Latin America.]

[Mr. Sisco:] Jack—countervailing duties. You keep talking about this same problem. Why don’t you solve it?

Mr. Kubisch: We are really in a bind on this. It is really a very painful and difficult problem for us. And if it hadn’t been for the Secretary’s personal intervention this morning, there would have been an announcement of a countervailing duty action against Argentina today.

Mr. Sisco: What was it—shoes?

Mr. Kubisch: Shoes. In a word, Argentina ships non-rubber footware to the United States, and according to evidence that has come to our attention, there are certain subsidies in connection with those exports. The same with Brazil, non-rubber footware to the United States. The same with Colombia on fresh-cut flowers to the United States. Against all three of those countries the Treasury Department is preparing to take countervailing duty action on a law that is very old on the books—it has been on the books I think since the 1890s.

Mr. Ingersoll: I don’t think you are the only one that has been hit by that.

Mr. Sisco: They are being pressed by the shoe industry, aren’t they?

Mr. Kubisch: Yes.

Mr. Sisco: But the retail field doesn’t want them to do that, because they feel it is bad for the retailers.

Mr. Kubisch: Precisely. But the shoe industry has brought a lawsuit apparently in a couple of cases against the Secretary of the Treasury for failure to act vigilantly in enforcing this law. The Secretary of the Treasury also wants the Trade Reform Act going through the Congress to have in it more flexible provisions, to have more discretion in the future. In order to get that flexibility, he has to show he is hard-nosed and tough in enforcing the law as it exists.

From our point of view, the Latin American countries are saying, “Look, Secretary Kissinger is talking about a new relationship, broader, wider interests of the United States, the hemisphere as a group working together; and the first thing you do is inject this real sour note, right after the meetings of the Foreign Ministers in Mexico, Washington and Atlanta.” They have been writing to him, cabling, they have been calling him, and they have been after all of us—“Can’t you get the Secretary of the Treasury and the Treasury Department not to do this.”

And the role we have been trying to play, in a very narrow maneuvering space we have, is to have exhaustive consultations between the governments so that if in the end the duty is finally levied, it can be based purely and simply on a carrying out of the law.

The Secretary of the Treasury has no option. We have done everything we could to try to find some way out of it. We are unable to. The problem is Treasury has been only partially cooperative on this, because they don’t want to be seduced by the State Department on the diplomatic and foreign considerations. They want to be tough—

Mr. Sisco: Try to use a little different word than “seduced,” will you please.

Mr. Kubisch: All right. Overly influenced by us—because they are afraid that we may introduce important overall considerations for the U.S. Government that will influence their activities. And so they have been proceeding at times without consulting us. All of a sudden, they are on the verge of announcing something, and we hear about it, and we say “Stop.” And we really made the strongest possible representations to them to stop. We have just been barely successful in warding off real problems.

Mr. Sisco: Did the Secretary talk to Simon?

Mr. Kubisch: He talked to him this morning. But I’m afraid the problem will not go away. Sooner or later it is going to introduce more poison into our regional relationships.

Mr. Ingersoll: How long have these been pending?

Mr. Kubisch: Well, the Brazilian and Colombian one were announced—the investigations were announced about sixty days ago. The Argentinian one came up just a couple of weeks ago, after months of stalling—Treasury was hoping it would go away, and it didn’t. And it just came up all of a sudden. And we were trying to get Treasury, and they agreed, not to announce it until there was an opportunity to exchange views with the Argentinians this coming week.

But I think that probably in the course of the coming weeks there will be some action taken. And there is going to be some real flack out of the hemisphere. And it is going to be presented in a way that it undermines the Secretary’s credibility—because he said that we would undertake no new actions to affect their access to our markets that were possibly avoidable without the fullest possible prior consultations.

Mr. Sisco: You will have domestic support on this withholding of the application of these countervailing duties, because while the shoe industry will be unhappy, there will be other people that are happy.

Mr. Kubisch: Tom Enders and I are going over to Treasury on Monday afternoon with a big contingent of State Department people to apprise the Treasury of all the considerations involved in this, because we have dealt with them only on bits and pieces of problems.

Mr. Sisco: That’s good.

[Omitted here are discussions unrelated to Latin America.]

1. Summary: Department officials discussed the potentially negative impact countervailing duties on Brazilian, Argentine, and Colombian products would have on Secretary Kissinger’s Latin American initiatives.

   Source: National Archives, RG 59, Transcripts of Kissinger Staff Meetings, 1973–1977, Entry 5177, Lot 78D443, Box 4. Secret. Drafted on June 24. Sisco chaired the meeting in place of Kissinger, who at the time was briefly in the United States between foreign trips; Sisco was Acting Secretary from June 10 to 19 and from June 25 to July 9. The meeting began at 3 p.m. and was attended by all of the principal officers of the Department or their designated alternates. All brackets are in the original except those indicating text omitted by the editors and “[Mr. Sisco]”, added for clarity. In a June 25 staff meeting, Department officials noted the Treasury had initiated countervailing duty proceedings against Colombia and Brazil. At Kissinger’s request, Treasury officials delayed announcing similar actions agianst Argentina for seven days. Kubisch observed the announcement “couldn’t be more untimely,” coming as it did in “the immediate aftermath of Secretary Kissinger’s initiatives in Latin America.” (Ibid.)