Foreign Relations of the United States, 1977–1980, Volume III, Foreign Economic Policy

266. Memorandum From the Under Secretary of State for Economic Affairs (Cooper) to Secretary of State Vance¹

Washington, June 11, 1977

Post-Mortem on CIEC

The US team to CIEC met for an hour and a half yesterday to reflect on what lessons we might learn from the CIEC experience. We discussed coordination within the US Government among the industrial countries and with developing countries. We also tried to assess the value of CIEC and to draw what lessons we could for multilateral diplomacy in the future.

With some self-satisfaction, we concluded that coordination within the US Government had been very good on CIEC matters. The agencies worked well with one another. There were a few areas where those working on CIEC matters were not as cognizant as they might have been of other related activities—the main problem here being our desire to commit to aid doubling at a time that was extremely awkward in terms of the legislative calendar on current aid appropriations. Coordination among the industrial countries was also very good, although there were a few slippages. The desire to place a high priority on close coordination means, of course, that we were somewhat more rigid on some issues than the US acting alone would have been. But, on balance, we certainly gained more than we lost from close coordination with the other industrial countries. The coordination was not in such lock-step that from time to time independent action was not possible. The main slippage came in early April when I thought we should make a coordinated approach to the key developing countries on how we viewed the prospects and outcome of CIEC. Michael Butler (UK),² speaking for the European Presidency, agreed with this, but somehow the European Council of Ministers torpedoed it. We went ahead with our bilateral anyway, with Butler’s tacit approval, but without formal coordination with the other countries.

It is difficult to assess the value of the bilaterals we had with the developing countries. They took place mainly in April with your follow-up letter to Ministers delivered by our Ambassadors in mid-May.³ The Mexicans disappointed us at CIEC, and played a far less constructive role than we had hoped on the basis of my bilateral conversations in Mexico City in mid-April.⁴ They apologized privately for this—Solomon chided Roel for the unconstructive role that they were playing in Paris—but explained, somewhat sheepishly, that for them G–77 diplomacy is different from bilateral diplomacy. We cannot make separation so clearly and should emphasize to other countries that only a certain degree of inconsistency between their bilateral and multilateral stance is tolerable for us. Our bilateral approach may have helped with the Indonesians and Algerians, and it certainly did with the Saudi Arabians. I come away from the experience with the conviction that we were right in going ahead with our bilateral discussions and that, if anything, on future occasions we should intensify them, although I admit it is difficult to be certain that they are helpful.

It is difficult to assess CIEC as a whole. It ended with meager results, but with a very good tone. I believe we came out about as well as we could reasonably have expected to do. Certainly, the dialogue lacked the acrimony and even hostility that accompanied the North-South dialogue two years ago. It would be nice to credit CIEC with (1) having exerted a calming influence on North-South relations over 1975–1977, and (2) having led to moderation in oil prices. This would represent a plausible but not wholly persuasive assessment, and we will never really be sure. We will learn more about CIEC’s effect on the tone of North-South relations when the outcome is taken up in the UNGA. Perez-Guerrero is again out on the hustings for a New International Economic Order, which, he concedes, is necessarily a long process, with the threat that oil prices will be used as the instrument to attain it, albeit “reasonably and advisedly”. This is an instrument which is not at Venezuela’s disposal, and its actual use depends on how much pressure OPEC countries can bring on Saudi Arabia on NIEO and other grounds.

As to the implications for multilateral diplomacy, we agreed that it would be desirable in the future to avoid negotiating on such a broad agenda as CIEC had. We will, of course, continue to have general discussions in the UN and elsewhere, but we should strive to drive actual negotiation into specialized forums where directly interested countries dominate on any particular issue, and where they are represented by persons with expert knowledge, who will be more pragmatic and more desirous of achieving real results, rather than rhetorical victories.

Standing back from the North-South dialogue as a whole, I believe we have been in a predominantly defensive posture, and we have allowed the developing countries to seize the moral ground. I believe we have to regain the initiative in two respects:

1. Whenever developing countries propose an area for negotiation, we should quickly address the issue with a proposal that we find acceptable, rather than simply responding negatively to proposals—or broad suggestions—put forward by the developing countries.⁵ At CIEC, we were in a strong position on external debt, even though the developing countries did not accept our proposal. We showed them we took the issue seriously by seizing it and responding to it. The US stance is also very good on sugar, where it is widely recognized that we made a constructive proposal even though it has not yet achieved general agreement.

2. We must find a number of areas to take the offensive. The President’s position on human rights represents an example outside the economic area. Our proposal on illicit payments is another example. Still other possible examples where we might take the offensive is in urging developing countries, in their own interests as well as ours,⁶ to reduce their very high levels of tariff production and to take visible and effective domestic actions to help correct the extraordinary mal-distribution of income within developing countries. I will try to develop an analysis of possible areas where the US and other industrial countries can take the offensive in multilateral discussions. The purpose is not to be strident or acrimonious, but rather to show that we also care how the world system operates and to make clear that we consider developing countries to be part of it, not a privileged group outside it. The purpose will also be to regain the moral ground in international debate that has been captured by leaders in developing countries—sometimes with genuine commitment, but often with cynical opportunism—but that is historically and philosophically ours.

1. Source: National Archives, RG 59, Office of the Secretariat Staff, Records of the Under Secretary of State for Economic Affairs, Richard N. Cooper, 1977–1980, Lot 81D134, Box 2, RNC Testimony before JEC on CIEC—6/21/77. Confidential. Vance initialed “CV” at the bottom of the page.
2. Michael Butler was Deputy Under Secretary for Economic Matters at the British Foreign and Commonwealth Office.
3. Telegram 120307 to selected posts, May 25, transmitted a message on the CIEC from Vance to G–19 Ministers. (National Archives, RG 59, Central Foreign Policy File, D770185–1212)
4. No memoranda of conversation of these discussions were found. According to telegram 6763 from Mexico City, May 6, Cooper conveyed the U.S. position on CIEC to Mexican officials when he was in Mexico City on April 14. (National Archives, RG 59, Central Foreign Policy File, D770162–0409)
5. Vance highlighted this sentence and wrote “OK” in the adjacent margin.
6. Vance highlighted the portion of this paragraph that begins with “Our proposal on illicit payments” and ends with “in their own.”