Foreign Relations of the United States, 1981–1988, Volume XXXVIII, International Economic Development; International Debt; Foreign Assistance

120. Action Memorandum From the Assistant Secretary of State for International Organization Affairs (Keyes) and the Assistant Secretary of State for Economic and Business Affairs (McMinn) to Secretary of State Shultz¹

Washington, May 29, 1987

SUBJECT

• U.S. Approach to the Seventh Session of the United Nations Conference on Trade and Development (UNCTAD VII)

ISSUES FOR DECISION

What approach to UNCTAD VII is most consonant with the continuing U.S. objective of turning UNCTAD toward more constructive activity.

ESSENTIAL FACTORS

The seventh session of the United Nations Conference on Trade and Development (UNCTAD VII) will take place in Geneva from July 9 through 31, 1987. The conference will proceed in two phases, a two-week meeting of senior officials, followed by a one-week ministerial session. We approach UNCTAD VII with serious reservations. The provisional agenda adopted in October, 1986, sets as the theme “Revitalizing Development, Growth and International Trade: Assessment and Policy Options.” The U.S. alone voted against the provisional agenda for UNCTAD VII, in part because neither the G–7 nor our OECD partners supported our call for prominent consideration of the role of the private sector in development.

A U.S.-led reform initiative in UNCTAD, launched in 1984, has elicited some positive, albeit modest, change in the operations of UNCTAD.² Our effort to bring about a redirection of treatment of substantive matters has not yet borne fruit, although there have been a few hopeful signs. For example, the new secretary general has taken some steps to reduce overt collaboration of the secretariat with developing countries, to ensure preparation of more objective documentation, and to facilitate more businesslike meetings. We have recently been able to work satisfactorily toward establishment of an important copper study group under UNCTAD auspices.³

Our assessment of UNCTAD’s ability to address effectively the critical problems of global economic development leaves us with serious concerns. The Secretariat and the G–77 continue to seek to intrude on the mandates of other multilateral institutions; for example, UNCTAD seeks a role in negotiations aimed at global solutions on debt and trade issues, as well as critically pronouncing on Group of Seven macroeconomic policy coordination. Soviet nationals in the secretariat continue to slant some of UNCTAD’s work, and political bias against Israel continues. Although the U.S. is willing to pursue realistic initiatives on a few selected topics within UNCTAD, the organization is still an unattractive venue.

Reports of the preparatory meetings on the agenda topics and the meeting of G–77 ministers in Havana⁴ indicate that the developing countries will again present a host of unrealistic demands for action by the industrialized nations, as was the case at UNCTAD VI. The Havana Declaration of the G–77 ministers presents much the same list of complaints and demands that surfaces regularly at the UN General Assembly and in regional bodies. It holds virtually no promise for reasonable discussion or compromise in Geneva.

Three possible options, designed to respond to the situation at UNCTAD, are analyzed below.

ANALYSIS OF OPTIONS

A. Condition Active Participation on Conduct of UNCTAD VII as a Discussion Forum Only

The U.S. could press to organize UNCTAD VII in a less contentious way, e.g. to avoid negotiations and produce only a report of proceedings. If we fail to achieve this, as is all but certain, we would decline active participation in UNCTAD VII and would authorize a U.S. “observer” delegation only. The delegation would intervene only to state that it opposed or did not associate itself with actions taken at the session. This would clearly signal our conviction that UNCTAD should confine itself to discussion only and that we are not prepared to engage in negotiations there. Failure on our part to send a suitably high level delegation would probably elicit complaints, even high level phone calls to you, from both OECD and from G–77 countries and the UN Secretary General. The Eastern bloc would try to capitalize on our “downgrading” of participation in a development organization. We could encounter strong public criticism for “abandoning” the concerns of the LDC’s. USTR fears a negative spillover on GATT negotiations.

B. Senior Participation as in the Past

A senior State Department official (e.g. Under Secretary Wallis) could attend UNCTAD VII to deliver a strong message to the plenary, as Deputy Secretary Dam did at UNCTAD VI.⁵ The U.S. delegation, led by a DAS for the rest of the session, would express U.S. views and work to prevent unrealistic proposals from gathering momentum. Our OECD allies would have less difficulty with this approach. However, such a delegation would signal that, despite our unhappiness with the agenda and with the work of UNCTAD in general, the U.S. will continue its previous approach to the organization. The presence of a senior U.S. official would lend our implicit endorsement to the session and the Conference, regardless of the content of his address, or the U.S. positions on the various issues.

C. Reduce the Level of Our Delegation

Our delegation would be headed by an official no more senior than a Deputy Assistant Secretary. The absence of a Department principal would signal our serious concern about the inadequacy of UNCTAD’s approaches to economic development issues. The delegation would participate in the substantive discussions, speak out against hostile positions, and generally avoid entering into negotiations. It would, however, have discretion to negotiate in those instances which hold potential for furthering our interests. As in options A and B, the U.S. would risk criticism for its failure to participate in an unqualified fashion. While our OECD colleagues might be uncomfortable with this approach, many in Group B share our frustrations with the sterile and unproductive proceedings in UNCTAD. USTR, together with USDOC, EB, regional bureaus, AID and IO, favor this option, which would give our delegation flexibility in deciding which areas, if any, show potential for negotiation.

Recommendation:

That you approve Option C.⁶

1. Source: Department of State, Executive Secretariat, S/S Files, 1987 Official Office Files for (E) Economic Affairs Allen Wallis, Lot 89D155: Through Memoranda, May 1987. Confidential. Drafted by Geoffrey Wolfe (IO/E) on May 28; cleared in EB/ERP/ICD, EB/IFD/ODF, EB/OT, EB/OT/ODC, EB, IO, IO/E, ARA/ECP, EUR/RPE, EAP/ECP, AF/E, and AID/PPC/DC. Sent through Whitehead and Wallis. Whitehead did not initial the memorandum. Sent under a handwritten May 30 covering memorandum from Wallis to Whitehead.
2. Telegram 199 from the Mission in Geneva, January 12, updated the Department on the status of the U.S. reform effort of UNCTAD initiated in 1984. The Mission viewed the “progress to date as both significant and justifying continued efforts by the U.S.” (Department of State, Bureau of Economic and Business Affairs, Office of Developing Countries and Trade Organizations, General UNCTAD Country and Subject Files, 1975–1987, Lot 88D345: Gerberak UNCTAD General 85–87)
3. See Document 376.
4. The sixth Ministerial meeting of the G–77 took place in Havana from April 20–25, in preparation for UNCTAD VII.
5. Telegram 4608 from Belgrade, June 13, 1983, transmitted the text of Dam’s UNCTAD VI speech, entitled “The Challenge of Economic Growth.” (Department of State, Central Foreign Policy File, Electronic Telegrams, D830334–0617)
6. Shultz did not indicate his approval or disapproval of the recommendation. Telegram 197044 to all diplomatic posts, June 26, conveyed the U.S. approach to UNCTAD VII and informed posts that the U.S. delegation would be headed at the Deputy Assistant Secretary level. (Department of State, Central Foreign Policy File, Electronic Telegrams, D870505–0238)