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78. Action Memorandum From the Assistant Secretary of State for Economic and Business Affairs (Katz), the Assistant Secretary of State for Human Rights and Humanitarian Affairs (Derian), and the Director of the Policy Planning Staff (Lake) to the Deputy Secretary of State (Christopher)1

SUBJECT

  • Commodity Credit Corporation and Human Rights

Issue for Decision

You are being asked to decide whether Commodity Credit Corporation (CCC) extensions of credit should be subject to review on human rights grounds. D/HA and S/P believe they should be so reviewed. The Agriculture Department and EB disagree.

Essential Factors

CCC credits are an official mechanism for facilitating the export of American agricultural commodities. They are designed to serve commercial objectives, but have at times been used to pursue political objectives as part of our foreign policy. No mechanism now exists whereby they are routinely reviewed for human rights considerations.

Narrative arguments from both points of view are contained in an attachment.2

Options

1. That the Department adopt the position that the extension of CCC credits not be subject to human rights review.

Pro

CCC is a commercial mechanism; its manipulation for political purposes can only erode our export efforts.

—The law establishing the CCC makes no reference to foreign policy considerations or to a role for the Secretary of State in the administration of the program.

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—The interest rates on CCC credits are set at commercial levels and must be above the cost of money to the Treasury. The repayment period can be as long as three years. The CCC program is designed to meet the competition of the government entities which control trade in other major exporting countries and to maintain and expand American agricultural exports in the face of their competition.

—In times of short supply CCC credits may be particularly beneficial to a potential importer. In such circumstances decisions regarding extending credit have occasionally included political considerations. Given the present situation of an abundant American and world food supply, however, we can gain no political leverage with CCC credits. If we withhold them, a potential importer will merely turn to one of our competitors.

—We now have large agricultural surpluses in this country. If our human rights efforts were seen to be interfering with export efforts, it would be likely to cause a domestic political confrontation between advocates of human rights and agricultural interests to the detriment of the Administration’s overall political position.

Con

CCC credits are provided by a United States Government corporation, established by action of the United States Congress. They are an official international activity of the United States Government. Human rights is a central goal of American foreign policy and, therefore, must be taken into consideration in CCC decisions.

CCC credits are at least partly concessional in nature and are viewed by other governments and by their publics as an element of American assistance, denoting a favorable political attitude.

—The timing, amount and nature of any extension of credit is a foreign policy act. We should at least consider therefore, whether on balance it serves our interests, including our human rights interests.

2. That the Department adopt the position that all extension of CCC credits will be reviewed through the working group and the Interagency Committee for their influence on human rights.

Pro

(Con argument for Option 1 and the following)

—This option permits the Interagency Committee to view all aspects of government-related economic relationships and human rights policy.

—Human rights is the only aspect not reviewed by the National Advisory Council on International Monetary and Financial Policies.

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Con

(Pro argument for Option 1 and the following)

—Human rights has been established as a major policy objective by this Administration but it is not overriding in every circumstance.

—By extending human rights criteria to the commercial arena we are inviting a backlash effect which could harm the cause of human rights.

3. Subject to procedures to be worked out between the Deputy Secretary of State and the Deputy Secretary of Agriculture, where a country to which CCC credits may be extended is designated by any relevant bureau or department as raising exceptional human rights concerns, the situation thus presented will be submitted to the working group and the Interagency Group for recommendation.3

Pro

(Same as Option 2 and the following)

—This process now is in place for the consideration of ExIm Bank commercial loans for non-strategic materials.

Con

(Same as Option 2 and the following)

—The CCC’s primary purpose is to promote agricultural exports. Foreign policy considerations, while sometimes a factor, will only very occasionally be of significance.

Recommendations

That you approve Option 1, which is favored by EB and the Agriculture Department, that CCC credits not be subject to human rights review.

Alternatively

That you approve Option 2, which is favored by D/HA, that all extensions of CCC credits be reviewed through the working group and the Interagency Committee for their influence on human rights.

Or

That you approve Option 3.4

  1. Source: National Archives, RG 59, Central Foreign Policy File, P770185–2467. Confidential. Drafted by Stephen Johnson and concurred in substance by Katz, USDA, and Lauralee Peters (ARA/ECP). Schneider initialed for Derian. Tarnoff initialed the memorandum.
  2. The undated “CCC and Human Rights: Background and Issues” paper is attached but not printed.
  3. Christopher bracketed this paragraph and wrote in the left-hand margin: “revised in D.”
  4. Christopher added “as revised by the Deputy Secretary” at the end of the sentence. He initialed the approval line on November 4, according to a stamped date.