39. Editorial Note

In his July 7, 1977, Evening Report to President Jimmy Carter, Secretary of State Cyrus Vance discussed the oil cargo preference issue: “We have called in officials from the embassies of the major shipping nations this afternoon and informed them of our decision to support an oil cargo preference. We told them that their representations had been carefully considered but that because of domestic employment considerations it is necessary for us to support a limited oil cargo preference. We emphasized that given current projections of US oil imports and [Page 140]other demands for US-flag tankers, the proposed level of cargo preference would not create a demand for new US tanker tonnage which would adversely affect the current world tanker surplus. Embassy representatives were unhappy and recalled our London summit pledge to reject protectionist measures. We have undertaken an urgent review of how to deal with the problems which the preference measure poses for our Treaties of Friendship, Commerce and Navigation.” In the margin adjacent to this portion of Vance’s report, Carter wrote: “This is my decision. We’ll just have to make the best of it.” (Carter Library, National Security Affairs, Brzezinski Material, Subject File, Box 18, Evening Reports (State): 7/77)

On July 11, the administration announced that it would support the introduction of cargo preferences. The preferences were to be phased in over a 5-year period, increasing 1 percent per year from an initial rate of 4.5 percent, so that by 1982 9.5 percent of all U.S. oil imports were to be carried in U.S. ships. (“Carter Would Ship More Imported Oil On Tankers of U.S.,” The New York Times, July 12, 1977, page 39) Carter’s support for cargo preferences proved controversial. Republicans charged that the decision was motivated more by politics than by the national interest and that it represented “a blatant political payoff” for the political and financial support Carter received from the maritime sector during the 1976 Presidential election campaign. On October 19, the House of Representatives voted against the cargo preferences bill; many contemporary observers attributed the bill’s defeat at least in part to the allegations of political payback lodged against the Carter administration, as well as Congressional supporters of the bill. (Congress and the Nation, volume V, 1977–1980, pages 297–299; Judith Miller, “Republicans Attack Cargo Preference,” The New York Times, August 2, 1977, page 50 (quotation is taken from this article); and Martin Tolchin, “House Defeats Bill to Give U.S. Tankers Cargo Preferences,” The New York Times, October 20, 1977, page 1)