265. Circular Airgram From the Department of State to Certain Posts1
SUBJECT
- International Sugar Agreement (ISA)
Background:
The economic provisions of the ISA of 1958 have been inoperative since 1961. The present protocol extending the framework of the Agreement [Page 679] expires at the end of 1965. The next session of the International Sugar Council (ISC), which opens in London on April 26, 1965, will have to decide whether a conference to negotiate a new agreement should be called for the fall of 1965, or whether the protocol should be extended for another year. During the last two months the USG has conducted consultations with a number of countries on the subject. Memoranda of these conversations were pouched to interested posts. In March 1965 we submitted our comments on the Preparatory Committee’s Report on the Bases and Framework of a new Agreement to the ISC Secretariat (Attachment I).2 The Executive Director of the ISC has visited a large number of Governments since January. His report and conclusions have been submitted to member governments (Attachment II).3 The members of the Organization of American States will meet during the week of April 19 in Washington to discuss Latin American participation in a new International Sugar Agreement. They hope to coordinate their positions for the Council session one week later.
Action Requested
If no objection is perceived, posts are requested to discuss the following US views with host governments and/or sugar industry officials and obtain reactions. Posts need not go into detail but should focus on general attitudes.
Present US Views
- 1.
- The US has not yet determined whether it should support the calling of a negotiating conference. We will be greatly influenced by other Council members’ desires and their views regarding the feasibility and timeliness of a negotiating conference.
- 2.
- The US has no selfish interest to pursue in a sugar agreement. Consistent with our general foreign economic policy, we are willing to cooperate in the stabilization of commodity prices for the benefit of those exporting and importing countries whose sugar economy is more closely linked to world market conditions than that of the United States.
- 3.
- The United States is not, in any sense, taking the lead in pressing for negotiations. Rather we feel it is for the principal exporting countries to decide on the timing and substance of negotiations. We would only caution all countries that it would be unwise to proceed to formal negotiations until it is clear that there is a sufficient consensus to assure a satisfactory outcome. A negotiation which ends in failure would not only be a waste of time but would risk a serious setback for international cooperation in this field.
- 4.
- The basic questions to which the participants will have to address themselves are listed in the report of the Executive Director of the ISC (Attachment II).
- 5.
- If any of the posts questioned whether the Kennedy Round would not be a better forum to work for an ISA, post should reply that USG already agreed to the formation of a sugar group in connection with KR negotiations. The Agenda and the term of reference of this group is not yet established and USG would like first to exhaust the possibilities of the International Sugar Council before shifting the main responsibility of establishing a workable system to any other forum.
FYI. We believe some producing countries are not prepared for negotiations this year, but find it convenient to hide their own hesitations behind the excuse that it is the US who is holding back negotiations because we have not yet enacted our long-term domestic sugar legislation. If this question is raised, posts should note that US domestic producers and refiners reached an agreement on long-term legislative plans two weeks ago. The Administration is now working on its own recommendations and hopes that legislation will be enacted during this session of Congress, i.e., before the Conference, if it is called. End FYI.
- Source: Department of State, Central Files, INCO–SUGAR 4. Limited Official Use. Drafted by Fred H. Sanderson and Miklos Szabo-Pelsoczi on April 12; cleared by Stanley Nehmer (OR), William Kling (AFI), Howard R. Brandon (EUR/BNA), Jean H. Mulliken (ARA), Thomas O. Enders (EUR/RPE), Harry B. Glazer (EUR/BNA), Thomas O. Murphy (USDA), Arthur C. Bauman (NEA/SOA), Francis G. Jarvis (FE/SPA), and William W. Thomas (FE/EA); and approved by Jerome Jacobson (E). Sent to 38 posts.↩
- Not printed.↩
- Not found.↩