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

18. Memorandum From Henry Nau of the National Security Council Staff to the U.S. Special Negotiator for Economic Matters (Meissner)¹

Washington, May 26, 1981

SUBJECT

• Scope Paper for the Cancun Summit

Your scope paper is an excellent start toward our preparations for Cancun.²

My comments apply to the procedural question of what do we do about global negotiations (GNs) and how Cancun and a Cancun-type format may or may not relate to GNs.

It is premature to conclude that Cancun and a possible follow-up to Cancun represent an alternative to global negotiations (GNs) in New York. We should think of the issues at this point in the following sequence:

1. Whether we accept the eventuality of GNs or not.

2. What relationship, passing or permanent, should Cancun or a Cancun-type format have to GNs?

3. Once we have a sense of this relationship, what is the timing for beginning GNs and/or a Cancun-type alternative?

GNs or Not

We all agree that, if we could avoid GNs, we would prefer to do so. We may not be able to avoid them. But for now we should not assume that we cannot avoid them. To make this assumption may only breathe new life into a dying horse. Without opposing GNs, we should give GNs a chance to die on their own. That means sticking with our position to delay a decision on GNs until after Cancun (a position which seems to be gaining ground—witness von Wechmar’s decision not to visit Washington in June).³ It also means repeatedly indicating our skepticism about GNs, using the following arguments among others:

— GNs detract from other North-South fora—General Assembly, UNCTAD, COW, etc.

— The General Assembly offers the necessary, regular overview of North-South discussions

— GNs at this point help the LDCs patch up their internal differences (intra-OPEC, OPEC–NOLDCs, etc) by “confronting” the North (probably one of the reasons some countries like Algeria want GN so badly)

— GNs got off on the wrong track last year, involve too much baggage from the past, and cannot be a forum for serious discussion.

In order to convince others on these points, we must press forward to come up with an imaginative, constructive and hopeful approach for North-South discussions at Cancun and whatever meetings may follow. We have begun to convince the Summit allies that we are serious about relations with developing countries (which probably accounts for their willingness to support, if only modestly, our desire to delay GNs). As this effort proceeds, we should try to convince them that GNs is not the place for a serious approach. Moreover, we should make the strongest case that our own domestic economic and foreign assistance efforts are not flagging but being revitalized. I continue to be appalled by our readiness to be defensive about these efforts. The present course involves great sacrifice on the part of the American people (cuts in social programs, increases in defense, an 18% increase in foreign aid over actual FY81 expenditures despite the domestic priorities, etc.). We should make this point over and over again to our allies as well as developing countries. Indeed, we need a fact sheet to show what we are doing not just in aid but trade, investment, etc. (This builds on the complementarity concept being developed in the LDC IG).

If GNs refuses to die, we need to keep open the option of eventually entering them. I believe that this Administration with its activist foreign policy will not ultimately resist a global dialogue if we are the only ones doing so. We would prefer that the dialogue take place only if it has a chance to be serious and meaningful. But if we fail to convince our allies and more moderate friends in the developing countries to be serious and others insist on a dialogue, we will probably accept it. In this case, we would go into these negotiations expecting nothing, convinced that our allies and friends in the developing world expect nothing, and ready to use the opportunity to present our point of view forcefully and non-defensively, opposing damage-causing resolutions without apology (taking the attitude “what did you expect” and compensating through good bilateral and regional relations with key LDCs). We have, in my view, both an Administration in Washington and an Ambassador in New York that could manage this approach consistently and non-belligerently. If we or others doubt that this is a possibility, we could point to the U.S. stance in WHO on the infant formula code⁴ as an example of our determination and ability to carry off this approach.

Cancun and GNs

If being the odd man out on GNs is not a viable option for this Administration, and if meaningless, low risk, GNs in New York is a last resort, our objective should be to design a process with more promise than GNs in New York. The Ottawa and Cancun Summits are opportunities to pursue this objective.

For the moment, we should take the position that Cancun or a follow-up process based on the Cancun format is no alternative to GNs. This position is both tactical and substantive—tactical in the sense that it minimizes opposition to Cancun as an elitist forum and alleviates pressure to agree on GNs at Cancun, and substantive in the sense that Cancun may be a worse alternative than GNs if we ultimately conclude that these discussions will not be serious. The Cancun format raises expectations, as CIEC did. We should embrace it only after we have determined that these expectations have a chance of being met, that is, only after we have made progress with our allies and friends in the developing world toward establishing broad agreement on agenda and acceptable outcomes of Cancun-type discussions. If such progress is made, a Cancun format becomes attractive. Its smaller number of participants, its relationship to capitals rather than New York, and its freshness—all enhance the prospect of a more serious discussion and more meaningful outcomes.

By the end of the Ottawa Summit exercise, we should be able to tell if our allies want serious discussions. If they only seek a process where they can maneuver with the LDCs against the U.S., while assuming that we will protect them, a Cancun-format loses its attractiveness. Under these circumstances, this format is no better than New York and probably worse since it is more visible, is perceived to be able to deliver more and thus increases the appearance of U.S. intransigence when we resist. If we have to resist, New York is the better place.

If we are sufficiently encouraged by the Ottawa process, we should press ahead toward Cancun. We might then consider four types of relationships between Cancun and GNs:

1. Cancun is a one-shot affair that applies a corrective to the course of GNs and produces results adequate to plunge into GNs in New York by the end of this year.

2. Cancun encourages a follow-up with similar format but also an early start-up of GNs by the end of 1981. Discussions proceed on two tracks—GNs in New York and the Cancun format.

3. Cancun produces some progress but warrants a follow-up early next year before plunging into GNs sometime in 1982.

4. Cancun encourages a follow-up and subsequently an alternative format which replaces GNs.

To the extent that our highest expectations for serious discussions are met, option four is attractive. To the extent that we become convinced that only a marginal improvement is possible on our “last resort” position of eventually entering GNs, option one makes most sense. Options two and three offer intermediate prospects. Option two may have some interesting advantages. The Cancun-format in this case would not be seen as an alternative to universal participation but rather as a forum to energize and to focus the universal discussion. Under these circumstances, the Cancun group would raise fewer expectations, have fewer elitist connotations, and could serve as a helpful corrective from time to time to the diffuse and often polemical discussions in New York.

Timing

When we commit ourselves to enter GNs in New York is critical. We should not do so as long as we are making progress with our allies and developing country friends toward a more constructive approach. Indeed, we can point to such progress as proof that we are not seeking to downplay relations with developing countries or to avoid the dialogue. Our only objective is to structure this dialogue in the most effective manner possible. That other countries want GNs and want them sooner than we do (if that proves to be true) should help not hurt. We can exploit this interest to encourage them to work out with us the basis for a more constructive approach than GNs-related discussion have provided thus far. (There is a parallel here to our strategy on arms control talks—using allied interest in the early negotiations to encourage them toward a common approach and strategy for such negotiations.)

1. Source: Reagan Library, Douglas McMinn Files, Subject Files, Global Negotiations; NLR–369–3–22–1–4. Confidential. Copies were sent to Creekmore, Nancy Dyke, Gorlin, and Hormats.
2. A draft of the scope paper, dated May 7, is in the Reagan Library, Douglas McMinn Files, Economic Summit Files, Mexico—General; NLR–369–11–2–1–7.
3. See footnote 5, Document 16.
4. A reference to the May 21 decision by the United States to cast its vote against a proposed U.N. international code to restrict the marketing of infant formula and other breastmilk substitutes. Ninety-three governments voted in favor of the code, three against, nine abstained and 45 countries were absent during the vote. See also Foreign Relations, 1981–1988, vol. XLI, Global Issues II, Document 166.