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210. Action Memorandum From the Acting Assistant Secretary of State for Economic and Business Affairs (Boeker) to the Under Secretary of State for Economic Affairs (Cooper)1

Suggested Changes in the Political Provisions of Public Law 480

Issue for Decision

OMB has urgently requested the views of the Department of State, on the Administration’s proposed amendments of PL 480 legislation. One issue still outstanding is whether the Administration should recommend deletion of some, or all, of the so called “political provisions” of the current bill (see attachment).2 It is our understanding that at the EPG, other agencies agreed to follow the lead of the Department of State on this question. Thus we need to give OMB our views. The current proposed bill, drafted by the Department of Agriculture, does not provide for deletion of any of the provisions. Therefore, I suggest you review our outline of expected Congressional reaction, telephone Senator Humphrey and obtain his views, and then inform us as to which provisions if any we should seek to have deleted.

Background/Analysis

You will recall that on February 14, we sent you a memorandum recommending that the Administration seek deletion of these so called political provisions from the PL 480 Act.3 You supported removal of those which would not raise serious controversy or congressional opposition. We have taken some soundings along these lines and the following is a recap of our findings.

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Section 102—Vietnam—Prohibits the Commodity Credit Corporation from financing the sale and export of agricultural commodities under PL 480 for any exporter who trades with Vietnam or whose parent company, subsidiary or affiliates trade with Vietnam. Under the Trading With The Enemy Act of 1917 and Foreign Asset Control Regulations, US exporters must obtain a license to export to Vietnam. It has been the Administration’s policy not to approve such licenses, and therefore, Section 102 is redundant insofar as US exporters are concerned. However, foreign trading companies operating in the US are affected by it. Section 102, in effect, requires a foreign conglomerate to choose between trading with Vietnam or having its US subsidiary trading company conduct PL 480 exports. This proposed deletion should not lead to significant controversy in Congress.

Section 103 (d)(4)—Egypt—PL 480 programming to the United Arab Republic (Egypt) unless the President declares such programming to be in the national interest. Egypt is currently our largest PL 480 customer and this provision is routinely waived by the President. Its deletion is not expected to arouse significant controversy, although staunch supporters of Israel may prefer to maintain the restriction.

Section 103 (d)(3)—Cuba and Vietnam—Restricts PL 480 programming to countries that trade with Cuba and Vietnam unless the President declares such programming to be in the national interest. This provision, too, is routinely waived by the President. In the case of Cuba, deletion of the provision would be consistent with our policy of no longer attempting to require third countries to observe our boycott. In the case of Vietnam, deletion of the provision is consistent with efforts to normalize relations with that country. EA and ARA support deletion. Our soundings indicate there could be some opposition by conservative forces in Congress to removing the Vietnam clause, but no major controversy.

Sections 103(d)(1), (2) and 103(j)—Prohibit PL 480 to Communist countries. The wording of the provisions affords some flexibility in certain cases, however, and may provide the Administration with the flexibility necessary to provide food aid to certain independent communist nations should it wish to do so in the future. Our soundings indicate Administration efforts to delete these proposals could evoke adverse Congressional reaction. Some would interpret the move falsely as a new Administration initiative on East/West matters.4

Section 411—Provides that no food aid shall be provided to Vietnam unless specifically authorized by Congress. Proposed deletion of the provision probably would be controversial in Congress. There is also the question of whether its deletion would be consistent with Section 109 of [Page 665]the Foreign Assistance Act which prohibits direct financial assistance to Vietnam. EA is not now advocating elimination of Section 411. However, if Congress were to propose elimination. EA believes the State Department certainly should not object.

I believe, however, that we would have a much clearer view of probable congressional reactions to these proposed changes, were you to telephone Senator Humphrey and elicit his views. Given his membership on both the Agriculture and Foreign Relations Committees and his great interest in the PL 480 program, he is likely to be able to add considerably to our perceptions as to how these proposals could fare. We have already contacted the Senator’s staff regarding these proposed changes. They are sympathetic to them, but also recommend that you telephone him.

Recommendation

1) That you call Senator Humphrey and seek a direct reading from him of likely congressional reactions on these questions.5

2) If the reading is generally positive, that you authorize us to inform OMB that the Department of State favors deletion of Section 102 Vietnam, Section 103(d)(3) Cuba and Vietnam, and Section 103(d)(4) Egypt. We would not take any action now on the other provisions of the law; however, it should be understood that we might wish to go back to OMB later regarding Section 411 if our evolving relations with Vietnam so warrant.6

Alternatively, that we inform OMB that the Department of State supports only deletion of Section 103 (d)(4) Egypt.7

  1. Source: National Archives, RG 59, Central Foreign Policy File, P770063–0403. Limited Official Use. Drafted by Ogden and Stephen Johnson (EB/OFP/FFD); cleared by Stahnke, Alexander Watson (EB/IFD/ODF), Charles Roh (L/EB), Ferch, Imus, and Gleysteen. Johnson initialed for all of the clearing officials except for Ferch. Ortiz also initialed the memorandum.
  2. Attached but not printed is a February 14 action memorandum from Katz to Cooper, wherein Katz discussed the limitations currently impacting Public Law 480. (National Archives, RG 59, Central Foreign Policy File, P770063–0406) The Agricultural Trade Development and Assistance Act (P.L. 480) established the Food for Peace program as a temporary solution to agricultural surpluses. Eisenhower’s successors continued to support legislation extending P.L. 480 on a multi-year basis. With P.L. 480 scheduled to expire on December 31, 1977, Carter administration officials and members of Congress drafted legislation both authorizing the extension of P.L. 480 and revising several of its provisions. The omnibus Food and Agriculture Act of 1977 (S. 275; P.L. 95–113; 91 Stat. 915) subsequently extended P.L. 480 through 1981, while the International Development and Food Assistance Act of 1977 (P.L. 95–88; 91 Stat. 537) placed a greater emphasis on nutrition, family planning, and the developmental aspects of aid.
  3. See footnote 2 above.
  4. Cooper placed an asterisk in the margin next to this paragraph. See footnote 5 below.
  5. Cooper placed a check mark on the approval line on April 8, according to a stamped notation, and added the following handwritten note in the left-hand margin: “Done. 4/7. HHH says clean it up by deletion, including Sec. 411. Leave * on p 2, but he may ask the Committee to take it out.”
  6. Cooper placed a check mark on the approval line on April 8, according to a stamped notation.
  7. Cooper placed a check mark on the disapproval line on April 8, according to a stamped notation. An additional handwritten notation at the end of the memorandum reads: “4/7—EB Dennis Jet informed. Advance copy sent to Jet. CS.”