145. Memorandum From Irving J. Lewis, Acting Chief, International Division, Bureau of the Budget, to the Special Assistant to the President (Schlesinger)1
SUBJECT
- Commerce-USIA disagreement regarding USIA “trade fair” exhibits
We understand that the President has requested you to look into Secretary Hodges’ recent expression to the President of his doubts regarding the advisability of USIA financing exhibits at trade fairs where there is little potential for U.S. trade promotion.2 We understand that you would welcome a paper from the Bureau setting forth the Commerce, USIA and State positions on this matter and making a recommendation for your consideration. Our understanding of the positions of Commerce, USIA and State over the years is summarized below. We have not sought the approval of any of the agencies for this statement.
Commerce position—The Secretary’s views reflect a belief that the balance of payments situation should increase the importance attached to the promotion of American exports in the selection of sites for USIA “trade fair” exhibits abroad. The exhibits should be mounted in countries where there is a significant potential for sales of American products.
This “trade fair” program, which originally was a special program of the President, has always included an important element of trade promotion. Participation of American businessmen in the display, and more lately the sale, of their products has been sought and obtained from the beginning. Special missions of American businessmen often were and are sent to many of the exhibits to promote American products. The U.S. Government and American businessmen should not invest the considerable amounts of money and effort required in countries where few sales can be expected, such as Czechoslovakia, Indonesia, Guatemala, etc.
USIA position—National exhibits, usually shown at bona fide trade fairs, but also shown “solo” in major foreign cities, have become a significant propaganda tool in the Cold War. Our propaganda purpose is often well-served if the economic attainments of this country are [Page 383] shown and explained through industrial or trade promotion exhibits. Or this propaganda purpose may be best served by using an industrial or trade exhibit largely as a cover for more subtle explanations of this country and its point of view. The major purpose being propaganda, the site, theme and content of these exhibits must be determined by propaganda needs, not trade promotion needs. To the extent possible, however, without subverting the major propaganda purpose, promotion of U.S. exports should also be an element in the exhibit.
State position—Generally speaking the State Department has supported USIA views on site and theme selection. In fact, at times a particular site is selected for political reasons at the insistence of an American ambassador even though USIA and Commerce may be somewhat cool to the Ambassador’s recommendation. (Annual Greenweek exhibit in Berlin)3
Past actions to clarify program purpose—Various actions over the life of this program have repeatedly reaffirmed its primary purpose as being informational rather than trade promotional. This Administration, especially, has by legislative proposal, executive order and budgetary action attempted to reduce the disagreement and misunderstanding by clarifying program purposes and agency responsibility regarding participation in trade fairs abroad.
1. The program was conceived in 1954 to compete with unchallenged psychological successes of Soviet Bloc exhibits at trade fairs.
2. The original law authorizing the program and the recently approved Fulbright-Hays Act state the propaganda or informational purposes of the program.
3. Since 1962 appropriations for the program have been sought and obtained as part of the USIA budget not as part of “Funds appropriated to the President.”
4. In 1962, the President delegated his authority for exhibits abroad under the Fulbright-Hays Act to USIA alone.
5. Beginning in 1960 the need for outright trade promotion exhibits abroad became more evident. This administration recognized this need by seeking and obtaining a specific Commerce appropriation for a trade promotion exhibit program entirely under the control of Commerce.
6. Early this year State, Commerce and USIA jointly instructed all USIA posts abroad4 that the USIA “trade fair” program had a primarily informational objective and that trade promotion should be included “insofar as this can be done within the psychological objectives. . . .”
[Page 384]1965 Budget relationship—Insofar as the 1965 budget is concerned, we understand that Acting Director Wilson and Assistant Secretary of Commerce Behrman have agreed on sites to be proposed, largely to the satisfaction of USIA. Whether or not Secretary Hodges will accept his Assistant Secretary’s recommendation is not yet clear.
Recommendation—We recommend that the understandings and arrangements worked out during the past two years by this Administration be reaffirmed.
The USIA “trade fair” program is primarily informational in objective. Trade promotion should be included insofar as it can be done within psychological objectives. USIA principally makes that judgment. Thus, USIA should determine the site, theme and content of its exhibits after receiving the advice of Commerce and State.
The Commerce trade fair program is primarily to promote American exports. Psychological objectives are secondary but should be included upon the advice of USIA insofar as they can within the trade promotion objectives. (On August 11, 1961, the President requested Mr. Murrow “to assure the maximum psychological effectiveness of [all] United States exhibit efforts overseas.)5 Therefore, Commerce should determine the site, theme and content of a trade promotion exhibit after considering whatever psychological advice USIA chooses to make.
Because of the informal nature of Secretary Hodges’ comments to the President, any Presidential decision on this matter perhaps should in the first instance be verbally transmitted to Secretary Hodges and Acting Director Wilson. If the President accepts the above recommendation, we suggest that a letter be sent either by the President or you indicating the President’s decision so that officials and staffs of both agencies clearly understand the President’s views. Staff of the Budget Bureau are, of course, available for whatever drafting assistance you may desire.
- Source: Kennedy Library, Schlesinger Papers, White House Files, Subject File 1961–1964, Box WH–12, International Expositions and Trade Fairs. No classification marking.↩
- See Document 143 and footnote 2 thereto.↩
- An annual agricultural exposition held in Berlin.↩
- See Document 117.↩
- See Document 45. Brackets are in the original.↩