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

34. Memorandum From the Special Representative for Trade Negotiations (Strauss) to President Carter¹

Washington, June 24, 1977

SUBJECT

• Cargo Preference Legislation²

Stu Eizenstat and I have met at length with Senator Long on this issue. I have taken indirect soundings of the leadership of the unions, and talked with others on the Hill. Blackwell of the Maritime Administration believes our labor soundings are accurate.

Politically, something in the way of a Cargo Preference is going to be very hard to resist. Other options don’t serve or satisfy the political need, and might even be counterproductive. The unions certainly feel that the Administration is committed to a Cargo Preference Policy.

The Maritime unions claim that a Cargo Preference Act is essential to the future of the U.S. Merchant Fleet and the security of the United States. Other remedies such as those proposed in the several option papers which have been circulated,³ in their view, do not suit this purpose and are seen either as entirely insufficient or a policy action contrary to their interests. They believe that the Cargo Preference policy will protect seafaring jobs for U.S. sailors and provide substantial on-shore employment in shipyards around America. (They point to the substantial numbers of minority employment in today’s shipyards as evidence that the jobs created on-shore would go where the need is greatest.)

What we have determined is that establishing the concept of Cargo Preferences is more important than the percentage. When Eizenstat and I met with Russell Long, we finally convinced him of this and left him in the political posture of “anything you fellows can satisfy Jesse Calhoun⁴ with, I will take and support.” I believe we can successfully sell less than ten percent preferences stretched out over five or six years and try to get the Hill and the Union committed to this if you desire to go the Cargo Preference route. In short, what we have accomplished is determining that the concept is far more important than the percentage.

This memorandum is not an attempt to justify Cargo Preferences over other options. It is intended to provide you with a least possible option at an initial, relatively modest cost. There are other memoranda presently before you relating to inflationary and trade aspects.⁵ I would be glad to discuss these options with you personally if you desire. It is my personal opinion that we have a day or two “bad story” situation following any available option.

1. Source: National Archives, RG 364, 364–80–4, Special Trade Representative Subject Files, 1977–1979, Box 2, Cargo Preferences. No classification marking. Drafted by Strauss and Wolff. A typed note on the last page reads: “By hand to White House 6/24/77.”
2. See Documents 7 and 13.
3. Not further identified.
4. Jesse Calhoun was the President of the Marine Engineers Beneficial Association.
5. Not further identified.