Foreign Relations of the United States, 1969–1976, Volume III, Foreign Economic Policy; International Monetary Policy, 1969–1972

53. Memorandum From the President’s Assistant for International Economic Affairs (Peterson) to President Nixon¹

Washington, February 22, 1971.

SUBJECT

• First Steps

I summarize below my first week’s efforts. I ask for your approval for several initial actions in which Messrs. Ehrlichman, Kissinger, and Shultz concur:²

I. Immediate Problems (Tab A)³—That you give me two weeks for an effort to try to assure that your next decision on shoes and cheese is based on a complete analysis of the issues and the impact of this combination of measures upon our basic trade posture,

II. A Positive Trade Strategy (Tab B)—Preparation of a Positive Trade Strategy for 1971-72 designed to put the Administration on the offensive in its support of liberal trade policy; principally, with a comprehensive and constructive program for industrial adjustment to foreign competition. Such a program should help minimize the possibility of a Congressional initiative for restrictive legislation.

III. A Tri-Partite Initiative (Tab C)⁴—Planning for a major international initiative on a broad range of international economic problems focusing on the US-EC-Japan relationship.

IV. Balance of Payments Strategy (Tab D)⁵—A basic rethinking of our approach to balance of payments and international monetary problems.

1. Source: National Archives, Nixon Presidential Materials, NSC Files, Agency Files, Box 218, CIEP. Confidential. A stamped notation reads: “The President has seen.” Attached to a March 1 memorandum from Peterson to Kissinger regarding the CIEP’s role. Another copy is attached to a February 24 memorandum from Bergsten to Kissinger, which called Kissinger’s attention to item IV on “rethinking” balance of payments and international financial policy, in which Peterson was reflecting Shultz’ desire “to rid ourselves completely of the capital controls inherited by the Administration.” Bergsten noted that this “could cause serious foreign policy problems and in fact the international monetary scene could become very troublesome before the year is out if our payments position remains in heavy deficit.” (Ibid.)
2. The President initialed his approval of each of the four recommended actions.
3. None of the tabs is printed. They are sections of an undated and untitled 11-page paper attached to the copy of the memorandum cited in footnote 1 above.
4. Section III of the paper was summarized in a January 25 memorandum from Bergsten to Kissinger: “The Bureau of Economic Affairs has recommended that the Secretary of State propose to the President that he call a summit conference of Western leaders on international economic problems for this autumn. I understand the Secretary is interested, and you may recall that he alluded to such a possibility at our meeting with the President on U.K. agricultural policy last Monday (January 18).” Bergsten considered the State Department idea “grandiose” and was skeptical the summit could be organized, but stopped short of “throwing cold water on State’s idea” at that time. (National Archives, Nixon Presidential Materials, NSC Files, Agency Files, Box 216, CEA) No documentation on a formal State Department proposal for a summit was found.
5. Section IV of the paper made a recommendation to “review our fundamental policies with those in the Administration having responsibility in this area, and some knowledgeable outsiders as well, in order better to fashion the fundamental approach we should take over the next few years.”