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

348. Memorandum From the Under Secretary of State for Economic Affairs (Cooper) to Secretary of State Muskie ¹

Washington, September 8, 1980

Current Crisis in Preparations for Global Negotiations

Don McHenry has cabled you² and Secretary Miller has phoned you about the current preparations for global negotiations. There are two issues to be addressed in New York: the procedures under which global negotiations (to begin next January, if they are launched) will take place, and the agenda. Discussion on the agenda has been held up by the G–77 pending agreement on procedures, and that is where the current difficulty lies.

A text now exists that the G–77 indicates it can accept without further change. A full copy of the text is attached.³ The key troublesome sentences, in my judgment, are summarized as follows:

“The conference . . . will be the forum for . . . conducting⁴ the negotiations . . . For the purposes of facilitating negotiations, the conference:

(a) will establish objectives and provide guidance . . .;

(b) . . . entrust the detailed negotiations . . . to specialized fora . . . or ad hoc groups;⁵

(c) will receive the results of the detailed negotiations . . . and will take appropriate measures to enable the conference to result in a package agreement.”⁶

It will be understood that all important matters, including the features above, will be agreed on only by consensus.⁷

This text poses serious problems for us, because it implies that such issues as the nature of the international monetary system and the rules that govern international trade, now covered by the IMF and GATT respectively, are up for negotiation in New York, in a highly charged political atmosphere. Only “detailed” negotiations are reserved for the specialized bodies themselves. I strongly fear that negotiation of such issues in New York, even under a rule of consensus, may lead us to accept positions which are not wise and, more important, the fact of negotiating such important issues in New York will undermine the integrity of the specialized bodies. It is difficult for an institution to continue to function effectively and creatively if the principal action in its domain is elsewhere.

The G–77 seems unwilling to accept any changes in this text. Britain, France and Germany, contrary to what McHenry says in his cable, do not find the present text acceptable. But, they are stymied in New York by European Community negotiating procedure, whereby the non-members of the European Community are represented by the Presidency, currently Luxembourg, and the European Commission. Since there are divided views within the European Community, the strength of feeling in the major European countries does not get reflected at the negotiating table. We, therefore, have to carry the main burden of negotiating and give the appearance of being isolated.

The decision we now face is as follows:

1. Whether to go forward with a clearly undesirable agreement on procedures, but fight to a stalemate on the agenda, which has not yet been the object of serious discussion;

2. Whether to go forward with an undesirable agreement on procedures and with the best deal we can reach on the agenda (which is likely itself to prove troublesome) and to fight out our disagreements with the G–77 on substance next year, if necessary, as it almost certainly will be in many areas, failing to reach agreement at that time;

3. Indicate now that we cannot accept these procedural terms because they threaten the integrity of such important international institutions as the IMF, GATT and the World Bank.

It is an unpleasant choice. While we have the moral substantive support of the key European countries, the onus for a breakdown would fall mainly on the U.S. I believe that the domestic impact of such a breakdown could be managed successfully and even turned into a plus. (“We ought to help developing countries, but not when it goes against our own fundamental interests and threatens valuable institutions . . .” etc.) Moreover, some of the more advanced developing countries, such as Brazil, and most Arab OPEC countries would privately welcome a breakdown with some relief. But it would be unquestionably portrayed around the world as a set back in North-South relations and an attempt would be made to blame the U.S. We could shift some but not all of this onus by insisting now on discussing the agenda even before reaching agreement on procedures, and letting the G–77 bear the burden of declining to discuss the agenda.

On balance, I believe we are better off taking the onus for a breakdown now rather than later and under the circumstances that would be more difficult because of the text that we are asked to agree to—and after thousands of man hours of negotiating actively which, on the experience of the last two weeks, is bound to be not only frustrating but is likely to be fruitless. Bill Miller agrees. Don McHenry, with whom I spoke again this morning, is on the other side of this judgment. He feels it will be difficult to explain a breakdown on procedural issues and that we are bound to experience the pressures and frustrations in the UNGA and elsewhere if the global negotiations do not provide such a forum.

A final consideration in my mind is that there are ways in which we can improve conditions for developing countries, and the lives of real people. We ought to proceed with those in any case. With regard to those, the global negotiations should be a sideshow. If it is made into the main act, under the circumstances (as it now seems) that are extremely inauspicious, it runs the risk of sidetracking or delaying those useful improvements.

We need to get word back to McHenry as soon as possible on whether the proposed text is acceptable. I told him you would have to focus on it personally and might well want to bring the President into this. I would be happy to talk about it whenever you are available.

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 7, E—Memoranda of Conversations, Jan. 1980–June 1980. Confidential. Muskie initialed the memorandum; in addition, a stamped notation reads: “ESM.”
2. On September 8, McHenry sent a telegram to Muskie and Miller entitled “The Crunch Point on Global Negotiations.” (Telegram 3415 from USUN, September 8; National Archives, RG 59, Central Foreign Policy File, D800426–1249)
3. Attached but not printed is a paper entitled “Latest Draft Text for Global Negotiations (Result of McHenry–Mishra Breakfast Meeting, September 8, 1980).” Brajesh Chandra Mishra, Indian Representative to the United Nations, was the spokesman for the G–77.
4. Muskie wrote “as appropriate” over the word “conducting.”
5. In the margin adjacent to points (a) and (b), Muskie wrote: “would like to see sentence in.”
6. Muskie underlined the word “appropriate” and highlighted the portion of this point that begins with “negotiations.” In the adjacent margin he wrote “strike Canadians.”
7. In the margin below this sentence, Muskie wrote “avoid amendment of results of detailed.”