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

274. Memorandum From Guy Erb of the National Security Council Staff to the President’s Assistant for National Security Affairs (Brzezinski)¹

Washington, undated

SUBJECT

• US Relations with the Developing Countries: The Next 12 Months—Report by the PRM 8 Working Group

The PRM 8 working group’s report of 13 September (PRM 8–III)² is a good review and analysis of the North/South relationship as it affects the US. The report also identifies “key specific issues” on which US actions will be required over the next year. These issues are discussed in an annex (Tab B).³ However, the report does not request immediate PRC guidance on many of the problems which are identified as critical. Presidential guidance will have to be sought on trade policy, commodities and common fund issues, foreign assistance, and agriculture, to name a few.⁴ Furthermore, please note the judgement (pp. 2–3) that the North/South environment could deteriorate if negotiations bog down on trade, a common⁵ fund, etc. I concur. Yet, only one⁶ of the issues for immediate PRC decision is directly relevant to sustaining, in the short-run, the relatively constructive North/South environment: The request for a PRC meeting on common fund issues. Hence, I attach great importance to eventual PRC consideration of the annex at Tab B, and to the development of policy guidelines on the key issues set out there.

CIA has also prepared an annex (Tab A)⁷ on key LDCs and security relationships. This material is of some interest in assessing LDC participation in North/South negotiations, but it is not critical for the PRC meeting.

AGENDA ITEM 1

Rather than asking the PRC to tackle the key issues immediately, the report requests guidance on the “basic policy framework for North/South relations” (see pp. 9–11). I recommend that you endorse the basic approach, with the caveat that the “community of interest and objectives” should take full account of the differences between developed and developing countries; moreover, for tactical reasons, the diverse situations and varied positions on international economic issues within the developing countries should also be kept in mind (see pp. 3–5 of the report).

If the basic policy framework is accepted, I recommend that you refer to the annex (Tab B) to place the key issues in the agreed North/South policy framework.

AGENDA ITEM 2

The PRM working group could not agree on the role which quantitative targets can play in US policies. In my view, targets for the performance of developing countries and international goals, such as acceptance of doubling food production or greatly reducing infant mortality, should be a part of the US approach to overall North/South negotiations. Carefully defined quantitative goals for development achievements should be part of the US response to developing-country demands for international changes. I recommend that you approve an investigation of appropriate targets directed by the DCC. I recommend against a PRC discussion at this time of types of targets since the necessary material is not available.⁸

AGENDA ITEM 3

Discussion of the role of an “overview mechanism” on North/South issues in the UN revealed significant differences of opinion within the working group. Treasury, for example, felt that not only is an “overview mechanism” undesirable, but it is probably avoidable. I do not agree. A UN oversight⁹ role is inevitable, either as a result of the 32nd UNGA or of the restructuring of the UN. An overview mechanism could be prejudicial to US interests if we do not take an active role in moving the General Assembly away from negotiations on specific issues and timetables, and toward general considerations of North/South problems. Moreover, the President reviewed this issue in connection with the Latin American bilaterals and expressed a preference for: a) steering UN General Assembly North/South discussions toward broad issues; b) the avoidance of negotiations within the General Assembly, c) negotiations on specific issues in functional bodies. I therefore recommend that Option 1, favoring an overview mechanism be approved.

AGENDA ITEM 4

Acceptance of greater participation of LDCs in the international system will flow from PRC agreement on the basic policy framework. I recommend that you approve the PRM 8 working group’s recommendations that the USG make a major effort to enlarge the group of countries which manages the international system.¹⁰

AGENDA ITEM 5

The basic human needs section of PRM 8–III is far superior to what is now found in the drafts of the Development Coordination Committee or the Brookings Report.¹¹ No final decisions need be taken on the issues presented at this time. In the preliminary discussions on basic human needs, I recommend (1) that you explore the possibility of approving the working group’s recommendation that its basic human needs approach¹² be endorsed; (2) that you express a preference for bilateral programs that are flexible enough to be directed toward¹³ middle income countries, as appropriate; (3) that you express a cautious approach to the conditionality which will be required of developing countries (on US leverage and conditionality the PRM 8–III, the DCC and the Brookings study are quite divergent); (4) that you express support for the working group’s recommendations that the US support the basic human needs policies of international development lending institutions; and (5) that you endorse the working group’s cautious approach to expanding the basic human needs concept to other areas.

AGENDA ITEM 6

PRM 8 working group has requested a PRC meeting on the common fund. I recommend acceptance of this recommendation.

The working group also requests an assignment to prepare another general report on North/South relations early next year. I do not object to the preparation of another report. But I do recommend that you request an expanded treatment of the key issues in Tab B rather than another general overview.

Deal, Pastor, and Thornton concur with this memorandum.

1. Source: Carter Library, National Security Council, Institutional Files, Box 65, PRC 038 9/22/77, North/South Issues—PRM 8. Secret. Sent for action. Erb did not initial the memorandum.
2. The September 13 Working Group paper, entitled “PRM 8–Track III, US Relations with the Developing Countries, The Next Twelve Months,” is ibid.
3. Tab B, attached but not printed, is an undated paper entitled “Key Issues for the Next Year.”
4. Brzezinski underlined the words “trade policy, commodities and common” and “issues, foreign assistance, and agriculture” in this sentence.
5. Brzezinski underlined the words “on trade, a common.”
6. Brzezinski underlined the words “only one.”
7. Tab A, attached but not printed, is an August 31 CIA memorandum entitled “Key LDCs in the North/South Dialogue: Issues and Forums.”
8. Brzezinski highlighted the final two sentences of this paragraph.
9. Brzezinski underlined the words “A UN oversight.”
10. Brzezinski highlighted the last sentence of this paragraph and underlined the words “group of countries which manages the international.”
11. See Document 277 and footnote 2 thereto.
12. Brzezinski underlined the words “basic human” and “approach.”
13. Brzezinski underlined the word “toward” and wrote “who” in the margin adjacent to this sentence.