Foreign Relations of the United States, 1969–1976, Volume XXXI, Foreign Economic Policy, 1973–1976

257. Editorial Note

On January 30, 1974, Abdellatif Rahal, Algerian Representative to the United Nations, proposed the convocation of a Special Session of the General Assembly to discuss raw materials and development issues. The following day, at a Department of State staff meeting, Secretary of State Henry Kissinger said of the proposal, “I think we should be in the rear guard of those who are joining it, but I mean we shouldn’t throw any sand in,” later adding, “We should point out what we take to be the problems, but we should never be in a blocking position. But could somebody do some staff work on it?” (National Archives, RG 59, Transcripts of Secretary of State Kissinger’s Staff Meetings, 1973–1977, Entry 5177, Box 2, Secretary’s Staff Meeting, January 31, 1974) At his February 14 staff meeting, Kissinger called the Algerian suggestion “a lousy idea,” but said that he was inclined “to send a note saying we have no objection” to it. (Ibid., Secretary’s Regional Staff Meeting, February 14, 1974)

On February 25, United Nations Secretary-General Kurt Waldheim announced that the UN General Assembly Special Session would begin on April 9. On March 8, Kissinger discussed with senior departmental officials whether he should address the assembly. When informed that the session would deal with raw materials and food, financial issues, and LDC assistance, Kissinger said, “That means we have an opportunity for a major statement,” and asked for the formation of a small group that would include Treasury officials and consist of “four or five thoughtful people to outline what the United States position should be on these issues. And with a five to ten year perspective.” (Ibid., Secretary’s Staff Conference, March 8, 1974) At a March 15 staff meeting, Kissinger confirmed that he would personally address the assembly and discussed the strategy for the session (a “damage-limiting course of action at the special UNGA rather than attempting to develop a resolution acceptable to us”), as well as the major themes of his speech, which would deal with global interdependence. (Ibid., Box 3, Secretary’s Regional Staff Meeting, March 15, 1974)

A draft of Kissinger’s speech was circulated to several officials for comment. On April 5, President’s Assistant for International Economic Affairs Peter Flanigan wrote to Kissinger: “The basic philosophy underlying our approach to international economic problems is that, other than meeting our aid obligations, interference by governments in the operation of an open world market system is counterproductive. To state or imply, as the speech does, that more international economic management, by the UN or by governments in general, is the proper way to solve these problems is directly contrary to that philosophy.” In particular, Flanigan criticized proposals for the creation of an international group to study and recommend action in the field of resource policy, the establishment of a global food reserve, and the formation of an International Institute for Industrialization and an International Fertilizer Institute. (Ibid., RG 56, Records of Secretary of the Treasury George P. Shultz, 1971–1974, Entry 166, Box 7, GPS State ’73/1974) On April 11, National Security Council staff member Charles Cooper wrote Kissinger that he was “deeply disturbed by the tone of much of this speech which implies that the traditional U.S. objective of an open economy with free trade and freedom of movement for capital is now totally inadequate. I admit to having no idea what a ‘just economic order’ is and to being suspicious of what it implies in the way of controls, government deals, and other primitive forms of social management whose end result will be slower economic and social progress for poor countries as well as rich nations.” Cooper continued: “I don’t believe that we need a whole new approach to international economic issues, and I don’t believe anybody knows what a new international economic order would look like.” (Library of Congress, Manuscript Division, Kissinger Papers, Box CL 431, Subject File, United Nations, Chronological File, 1973–1975, n.d.) That same day, Federal Reserve Board Chairman Arthur Burns noted: “The accent of the speech appears to be placed on governmental action, and I kept wondering about the role that private enterprise is expected to play. May not such an accent mislead the developing nations?” (Ford Library, Arthur Burns Papers, Federal Reserve Board Subject File, Box B49, Foreign Ministers Meeting, Washington, Apr. 17–18, 1974 (3)) On April 12, Office of Management and Budget Director Roy Ash wrote Kissinger of his concerns about the “high degree of market intervention by governments” implicit in several of the speech’s proposals, its “prejudgment of unresolved policy issues,” its “implication of large scale new initiatives,” and its “organizational suggestions.” “In short,” Ash concluded, “I have reservations about the tone of the speech which appears to suggest that: creation of new mechanisms are more important than strengthening old ones; the solution to the very real problems lies primarily with the developed countries; and that we are likely to be willing and able to undertake ambitious new programs.” (Ibid., National Security Adviser, Scowcroft Daily Work Files, Box 6, 4/9–18/74)

The Sixth Special Session of the United Nations General Assembly met in New York from April 9 to May 2. Kissinger addressed the session on April 15. For the text of his speech, entitled “The Challenge of Interdependence,” see Department of State Bulletin, May 6, 1974, pages 477–483. Excerpts were printed in The New York Times, April 16, 1974, page 12.

Kissinger subsequently instructed Assistant Secretary of State for Economic and Business Affairs Thomas Enders and Assistant Secretary of State for International Organization Affairs Warren Buffum to prepare a aproposal for a $4 billion package of relief measures for those LDCs most seriously affected by the ailing global economy, subject to Secretary of the Treasury George Shultz’s approval. Kissinger wrote: “I know you have done so, but be sure Treasury understands this exercise is designed to put us in a position where our bilateral contributions, particularly in kind, can be considered as part of UN action program and designed to make [a proposed Special] Fund one component of that overall action program. Also this does not involve any new US funding request.” (Telegram Secto 18/2639 from Kissinger in Geneva, April 29; National Archives, RG 59, Central Foreign Policy Files) Shultz, however, was reluctant to agree, fearing the effects of the program on Congressional willingness to approve the U.S. contribution to the International Development Association. (Telegram 87745/Tosec 42 to Algiers, April 30, and telegram 86843 to USUN, April 30; ibid.) The latter telegram noted that Treasury was also concerned about “good publicity dollars 4 billion figure gives UNGA/SS.” On July 31, Congress did approve a bill authorizing a $1.5 billion contribution to the IDA, which the President signed into law on August 14.

Ultimately, developments at the Special Session in New York led to the abandonment of the proposal: “US proposal on emergency aid was filed yesterday and distributed as a document. However, we have not formally introduced this proposal. In meantime LDCs have decided present their position as a total package including both declaration of principles and program of action. The Pakistani proposal for a Special Fund, which our resolution was designed in part to counter, has been incorporated in the LDC program of action. If we were now to pursue our own proposal we could only do so over the opposition of the LDC group, and we would therefore be defeating our own objectives. Thus, we do not plan to introduce US resolution formally nor ask for a vote on it. It is perhaps just as well things are coming out this way because we are running into a considerable amount of flack from Treasury, Peter Flanigan, and some Congressional sources who are suspicious, based on press accounts, that we may be trying to force their hand on additional contributions.” The delegation suggested that it withdraw the paper, a course Kissinger approved. (Telegram 89251 to USUN, May 2, and telegram 89930 to USUN, May 2; both ibid.)

On May 1, the UN General Assembly adopted without a vote a Declaration and a Programme of Action on the Establishment of a New International Economic Order (UNGA Resolution A/9559). The Declaration recorded the Assembly’s “united determination to work urgently for the establishment of a new international economic order based on equity, sovereign equality, interdependence, common interest and cooperation among all States, irrespective of their economic and social systems which shall correct inequalities and redress existing injustices, make it possible to eliminate the widening gap between the developed and the developing countries and ensure steadily accelerating economic and social development and peace and justice for present and future generations.” The Programme called for action in ten areas: fundamental problems of raw materials and primary commodities as related to trade and development; the international monetary system and financing of the development of developing countries; industrialization; transfer of technology; regulation and control over the activities of transnational corporations; the Charter of Economic Rights and Duties of States; promotion of cooperation among developing countries; assistance in the exercise of permanent sovereignty of states over natural resources; strengthening the role of the United Nations system in the field of international economic cooperation; and a special program. (Yearbook of the United Nations, 1974, pages 324–326)

Several developed country delegations expressed reservations about portions of the resolution. On May 1, Representative to the United Nations John Scali told the Assembly: “The United States Delegation, like many others, strongly disapproves of some provisions in the document and has in no sense endorsed them.” (Telegram 1616 from USUN, May 2; National Archives, RG 59, Central Foreign Policy Files)