Office of the Historian

305. Memorandum of Conversation1

Washington, March 18, 1988, 7:30–8:30 a.m.

SUBJECT

  • International Economic Policy Breakfast

PARTICIPANTS

  • George P. Shultz, Secretary of State
  • James A. Baker, Secretary of the Treasury
  • Colin L. Powell, Assistant to the President for National Security Affairs
  • John Whitehead, Deputy Secretary of State
  • Alan Woods, Administrator, Agency for International Development
  • Ambassador Max Kampelman, Counselor, Department of State
  • Alan Larson, Acting Assistant Secretary of State for Economic and Business Affairs
  • David Mulford, Assistant Secretary of the Treasury for International Affairs
  • Stephen I. Danzansky, NSC Staff

[Omitted here are portions unrelated to the German Democratic Republic.]

East Germany

Secretary Shultz discussed briefly the Ridgway proposal for granting MFN-type trade concessions in return for East German payment of Jewish and U.S. World War II claims.2 Secretary Baker and General Powell expressed their reservations about the idea both on moral grounds—trading acknowledged East German obligations for concessional economic treatment—and on political grounds in terms of appearances during an election year. There appeared to be little sentiment to permit this idea to go much further and some resistance to allowing it to rise to the EPC level for decision. Shultz (somewhat less-than-forcefully) remarked that these Jewish claims victims were getting older and, if we delay much longer, the matter could end up being a bonus to their estates instead of for the victims. Secretary Baker offered that we ought to “kill the idea.” Al Larson indicated that the TPRG had begun some quiet work on the subject and had commissioned some analysis. Whitehead asked that this work be completed and thought it might then be kicked up to Cabinet level for decision. General Powell indicated that before doing that there were some deep political concerns [Page 938] in the West Wing about proceeding further and that more consultation was needed before going public on the issue. (S)

[Omitted here are portions unrelated to the German Democratic Republic.]

  1. Source: Reagan Library, Stephen Danzansky Files, Subject File, GDR: 09/06/87–05/03/88. Secret. The meeting took place at the Department of State. No drafting information appears on the memorandum; presumably drafted by Danzansky.↩
  2. See Document 304.↩