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

341. Letter From the Under Secretary of State (Katzenbach) to the Representative to the United Nations (Goldberg)¹

Washington, December 22, 1966.

Dear Arthur:

We regret that the cocoa issue added to your troubles at the General Assembly. Our isolation on the Cocoa resolution was unfortunate,² but without being defensive, I think there is insufficient awareness among your colleagues, particularly those from cocoa-producing countries, of the genuine difficulties the U.S. faces in negotiating an agreement. These are not simply a question of the lack of “political will” or the attitude of our industry.

There is no enthusiasm in Congress or anywhere else in this country for a cocoa agreement. Indeed, Congress finds commodity agreements little to its liking. We had the greatest difficulty getting the Coffee Agreement³ through, despite its importance to Latin America. It took two years and we were once repudiated by the Congress over it. Cocoa, unlike coffee, is hardly in chronic over-supply, which is the most impressive case for a commodity agreement. Compounding our difficulties is, of course, the industry’s complete opposition to an agreement. We have made the decision, nevertheless, to try to reach an agreement in the face of this opposition and a general lack of public support because we believe that a good agreement can help cocoa-producing countries. It is entirely possible, and perhaps even probable, that no agreement will be acceptable to the Congress.

Knowing that any agreement that is negotiated will face a negative attitude on the Hill and the united opposition of the domestic industry, we have had to examine our position on the substantive issues very carefully. We have not, however, taken a rigid line and we are continuing to test each proposal on its merits. The key test we have been making and will continue to make is this: Will a proposed provision of the agreement be workable within the financial and operational capabilities we can build into an agreement? If not, the Congress, aided by industry experts opposed to the agreement, could establish our failure to do our job properly and make an unanswerable case that the agreement is likely to fail. The case would be made that failure of the agreement would put great pressure on the United States to save it by assuming large new responsibilities, financial and other. Failure of a cocoa agreement might not bother our European friends but for us it would raise new demands on us, discredit the Coffee Agreement and foreclose future possibilities of actions in other commodity fields.

Each of the major points outstanding—price, buffer stock machinery and operating rules—involves the critical issue of what will work with the resources likely to be available. There are, in addition, many difficult technical issues. It will take time, but we believe they can be resolved. We regret being publicly isolated but you should know that our isolation is more apparent than real because the European consumers during the recent discussions basically shared our views on most of these major points. Apparently in the General Assembly they chose to hide behind us.

We’ve begun consideration of next steps—how best to make use of the demonstration you’ve given that we will maintain our views when we are convinced of them. We don’t think further efforts with Prebisch can have any use at this stage. His behavior has convinced us he is not a reliable mediator in this kind of negotiation. It will be necessary to help the Africans to understand what our problems are and how they can be solved in ways that meet their fundamental interests and are still consist-ent with what we can do. If you think it would help, we could send Ed Fried to New York to talk to Ambassador Arkhurst of Ghana to try to discover if we can reach an understanding with Ghana. We are not sure how well informed he is about the cocoa negotiations—for example, the Ghana delegate to the cocoa consultations was quite clearly upset by the tone of Arkhurst’s critical remarks in his speech in Committee II. However, if the leading producer and consumer can agree on the essentials of an agreement, other producers and consumers would probably find it possible to go along. Would you let me know how this strikes you?

Sincerely,

Nick

P.S. I am concerned about this on the Hill and we need your best help and advice there as well as in N.Y.

Nick ⁴

1. Source: Department of State, Central Files, INCO–COCOA 4. No classification marking.
2. On December 17, the U.N. General Assembly adopted Resolution 2210 (XXI), by a vote of 110–0, with 1 abstention (United States). Among other things, this resolution deplored the breakdown of the New York talks November 29–December 7, called upon “all concerned in the negotiations, particularly the major consumer countries, to do their utmost to arrive at an agreement on all outstanding matters,” and urged an early resumption of these negotiations. For a summary of the U.N. talks and the text of the resolution, see Yearbook of the United Nations, 1966, pp. 251–256.
3. The International Coffee Agreement, 1962, was signed at New York on September 28, 1962, and entered into force on December 27, 1963. (14 UST 1911) See Foreign Relations, 1961–1963, vol. IX, pp. 807–808.
4. The postscript is handwritten.