Office of the Historian

152. Minutes of a Senior Interdepartmental Group–International Economic Policy Meeting1

Washington, November 23, 1983, 11 a.m.

PARTICIPANTS

  • Treasury

    • Secretary Regan, Chairman
    • Marc Leland

  • State

    • W. Allen Wallis
    • Dennis Lamb

  • Defense

    • David Shilling
    • Dave Tarbell

  • Agriculture

    • Richard Lyng
    • Daniel Amstutz

  • Commerce

    • Lionel H. Olmer

  • OMB

    • David Stockman
    • Alton G. Keel

  • CIA

    • Maurice Ernst
    • [name not declassified]

  • USTR

    • Ambassador Brock
    • Harvey Bale

  • Cabinet Affairs

    • Larry Herbolsheimer

  • OPD

    • Roger Porter

  • CEA

    • Martin Feldstein

  • AID

    • M. Peter McPherson
    • Richard Derham

  • Ex-Im Bank

    • William Draper
    • Raymond Albright

  • NSC

    • William Martin

Export Credits and International Debt

The Chairman introduced the first agenda item on export credits and international debt. Marc Leland reviewed the highlights of an IG report on the role U.S. Government trade finance programs might play in responding to countries experiencing extraordinary liquidity problems.2 In particular, the report examines existing programs of the Export-Import Bank, Commodity Credit Corporation (CCC), the [Page 394] Economic Support Fund (ESF), and the Foreign Military Sales program (FMS) to determine how they can be adapted to support efforts to address extraordinary individual LDC debt problems. The paper concludes these programs should continue to be used in extending extraordinary financing to respond to the LDC debt crisis. The paper also notes that we should take precautions to ensure that Eximbank and CCC programs are reasonably assured of repayment before approving a transaction.

Marc Leland asked that the SIG–IEP bless the paper and that a budget review meeting be called promptly to review the budget levels for CCC and Eximbank. David Stockman took strong exception to the paper and the procedure outlined. He noted that these programs were generally out of control and that there was no reasonable rationale for funding even more credits and at the same time argue so strenuously for further domestic spending cuts. He noted that an extraordinary budget meeting was not necessary. This matter could be handled within the normal review process meeting with the President now scheduled for December. Furthermore, he emphasized that we did not have adequate means to assess the ability of the debtor nations to repay loans. Ambassador Brock also noted the problems with the Hill with extending more credits. Considerable political capital had been used to fund the Administration’s request for higher levels of support for the IMF.

The Chairman noted that there are important national security concerns for providing credits for strategically valuable allies. He noted that the NSC had requested tailor made financing packages to assist Mexico, Brazil, the Philippines and Jamaica. He agreed with OMB that the IG should further consider the issue of repayment.

During the discussion, the State Department, AID, Agriculture and NSC representatives noted their support for the general conclusions of the paper.

[Omitted here is discussion of IDA VII; see Document 301.]

  1. Source: Central Intelligence Agency, National Intelligence Council, Job 85–01156R: Policy, Planning, and History Records (1981–1984), Box 2, Folder 24: (SIG–IEP Meetings 1983). Secret. The meeting took place in the Indian Treaty Room of the Old Executive Office Building. Sent under a December 20 covering memorandum from Christopher Hicks to multiple recipients.↩
  2. A copy of the IG report, “Role of U.S. Government Guarantee and Trade Finance Programs in Responding to International Debt Issues,” is in the Washington National Records Center, RG 56, Records of the Office of the Assistant Secretary for International Affairs, 1950–1985, Meeting and Policy Files, 1979–1992, 56–10–60, Box 3, SIG File—November 1983.↩