Foreign Relations of the United States, 1977–1980, Volume XXVIII, Organization and Management of Foreign Policy

115. Memorandum From the Deputy Special Representative for Trade Negotiations (Wolff) to the Special Representative for Trade Negotiations (Strauss)¹

Washington, May 7, 1979

SUBJECT

• Trade Reorganization

A substantial element in getting the MTN passed will be whether the private sector believes that the U.S. Government will actively enforce the agreements that have been negotiated in the MTN.² The major question is how best to organize this effort.

In terms of political perceptions, as well as reality, this country would best be served by consolidating functions into one trade agency. Since it does not appear that creating a new department would have much of a chance now, and since what is needed is really something leaner than a department, it makes sense to pull things together in one tightly managed unit.

This country has suffered too long from having a variety of voices managing trade policy. The lofty ideals of the Ways and Means and Finance Committees in creating an STR were to have the government speak with one voice on trade matters and to unify the negotiating functions for industry, agriculture and labor, with some separation from foreign policy concerns, although not the absence of them. What was missing was the leverage. The STR’s ability to negotiate depends upon his relation with the President, because he is without any power base. He cannot influence antidumping and countervailing duty decisions, the use of export controls, the setting of commodity policy, etc. Therefore, he is a negotiator that is deprived of tradeoffs in a way that no foreign negotiator is.

When talking to developing countries, if the STR has no say in commodity policy, he has a lesser chance of success in advancing our commercial interests in that country. When talking to the Japanese or Europeans on color TVs or steel, the leverage gained through our unfair trade practice statutes is lodged elsewhere and unusable.

The likely outcome of the reorganization memo that is going to the President is to further weaken the government in the trade area,³ by assigning further functions such as MTN implementation to the Commerce Department, which has a lack lustre track record. This does not serve any political purpose, nor does it make sense as a matter of giving this country aggressive enforcement of its trade laws. In fact, it is further fragmentation.

What is worse is that the suggestion to just load a number of functions into the Department of Commerce is going to antagonize the agricultural community and organized labor, as well as substantial parts of the business community. We don’t need that kind of confrontation in the middle of trying to get consideration of the MTN package.

1. Source: National Archives, RG 364, Special Trade Representative, 1977–1979, Box 45, Reorganization, 1977. No classification marking. Copies sent to Alonzo L. McDonald and Robert Hormats.
2. The United States initialed the agreements reached in the Tokyo Round of Multilateral Trade Negotiations on April 12. See Foreign Relations, 1977–1980, vol. III, Foreign Economic Policy, Document 209.
3. See Document 117.