Foreign Relations of the United States, 1964–1968, Volume IX, International Development and Economic Defense Policy; Commodities

337. Memorandum From the Assistant Secretary of State for African Affairs (Palmer) to the Assistant Secretary of State for Economic Affairs (Solomon)¹

Washington, November 26, 1966.

SUBJECT

• US Position at Cocoa Working Party Meeting in New York²

The revised draft position paper for the UNCTAD Cocoa Working Party (just received)³ provides that the US should endeavor to postpone the price issue until other elements of an agreement can be settled. While I agree entirely that we should strive to resolve these issues before grappling with the price issue, I fear that events may not allow us to follow this course. With cocoa producers focusing their attention on price, it is likely that price may be a major issue from the start. If this in fact occurs (and we would support appropriate efforts to avoid this), I believe that the US should be prepared to discuss price in the following context:

“We should not indicate in this Working Party any willingness to consider a higher level than 19 cents now but seek new instructions on this issue if the situation warrants. We should first press for agreement on other essential issues, and as the negotiating situation develops keep the Department fully informed on the price question.”

I understand that the proposal put forward by the Cocoa Producers Alliance, if modified, has real possibilities for negotiation. As the Position Paper states hopeful preliminary indications are that producers have agreed “in large part to the terms of the proposal advanced by Dr. Prebisch and accepted by the US.”

I hope that we can proceed on the basis of this proposal to reach agreement.

1. Source: Johnson Library, Solomon Papers, Cocoa. Confidential.
2. On November 7 Prebisch sent a commercial cable to the Department of State inviting the United States to attend a meeting on cocoa in New York on November 29. The Department accepted and inquired about documentation that would be circulated to the delegations in advance of the meeting. (Telegram 81493 to Geneva, November 8; Department of State, INCO–COCOA 3)
3. “Position Paper for the U.S. Delegation to the UNCTAD Cocoa Working Party, New York, November 29–December 6, 1966,” drafted on November 21 by Paul E. Callanan. (Johnson Library, Solomon Papers, Cocoa) Callanan served as the U.S. representative at these talks.