49. Memorandum From the Assistant Secretary of the Treasury for International Affairs (Bergsten) to Secretary of the Treasury Blumenthal 1
- GATT for Investment
Per your urging at the EPG meeting on July 18,2 I have already met with Cooper and others from State to consider a GATT for investment. I will subsequently convene a meeting of my EPG Deputies Group, to develop a paper on the subject over the next few weeks for policy consideration in September.
Because of your interest in the subject I attach an early but well-done draft on the subject (Tab B),3 and a summary thereof (Tab A). It was prepared by my staff, and has only now been floated outside Treasury. However, any reaction from you even at this early stage would be of great value to our work.
On the substance, there is already underway the rudimentary beginning of a sort of “GATT for Investment” through efforts on different parts of the issue in different forums: discrimination in the “national treatment” section of the OECD code, international arbitration in ICSID,4 multilateral insurance via cooperation among the national OPICs, transfer pricing via an OECD working group, tax harmonization via a series of bilateral treaties, antitrust via bilateral understandings between the United States and several other industrial countries, corrupt practices in the ECOSOC negotiations, etc. But these are only a very tentative start:
—Some issues are not covered at all (e.g., tax incentives to foreign investors and “performance requirements”).
—Many which are covered have no enforcement teeth.
—There is no coordination among the many parts of the overall issue.[Page 174]
Hence there is clearly room for a major initiative, or series of initiatives, in this area. I will forward further material to you next month.
- Source: National Archives, RG 56, Records of Assistant Secretary of the Treasury for International Affairs C. Fred Bergsten, 1977–1979, Box 1, FT–6 Boards, Committees, Organizations, Panels, Working Groups 1977. No classification marking. Sent for information. Reviewed by Hessler on August 8. A typed notation reads: “Noted by W.M.B.”↩
- No minutes of this meeting were found.↩
- Tab B, attached but not printed, is a July 26 paper entitled “A GATT for Investment.”↩
- The International Center for the Settlement of Investment Disputes (ICSID), founded in 1966 as a part of the World Bank Group, provides a forum in which disputes between member states and private investors can be settled by arbitration or conciliation.↩
- No classification marking.↩
- An unknown hand placed checkmarks adjacent to the second and third sentences of this paragraph and wrote “Necessary?” at the end of the paragraph.↩