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

20. Memorandum From the U.S. Special Negotiator for Economic Matters (Meissner) to the Assistant Secretary of State for Economic and Business Affairs (Hormats)¹

Washington, June 23, 1981

SUBJECT

• Alternative Strategy to Global Negotiations in New York

For both economic and political reasons, there is a need for global consultations on economic issues. However, I have been turned off on global negotiations playing such a role since the negotiations last September in New York.² I do not believe that anything can be achieved in the economic field (too many countries, no expertise, North versus South structure, threat to standing institutions,³ etc.). Furthermore, if the U.S. does join we will die⁴ a thousand deaths in the political field as the EC and others position themselves so we alone defend the economic system. We should not enter such “negotiations” for political reasons when success will be defined in economic initiatives to which we cannot agree. We, therefore, need a strategy to kill global negotiations or make it harmless. I suggest we do this by taking a very firm bottom line which, if accepted, would lead to GNs in name only. If the G–77 does not accept our position, the GNs would die but they, not we, would have been the last to say no.

I still believe, though, that a consultation process is needed on a global basis, and our OECD partners believe it necessary also. A follow-on from the Cancun Summit is therefore in our interests, and some agreement on such a process should be made by the summit on October 22–23. There are many possibilities such as a follow-up meeting at ministerial level, but I would foresee four to six sub-ministerial level consultative committees working on topics of mutual global concern. The results of their work could be provided to a second head of state meeting in the fall of 1983 (prior to the U.S. election process but after UNCTAD VI). We would buy two years and hopefully move beyond North/South rhetoric. If you agree, we will develop an agreed strategy and start quiet diplomacy to achieve this end. The U.K. has already approached us on their desire to see such a follow-on process develop.

The smaller OECD countries, especially in the community and the Nordics, will resist a selective group being the global economic forum for the next two years. Secondly, what they want from GNs in New York is an energy dialogue. They are willing to pay for this dialogue by accepting global negotiations. If such a dialogue could be built elsewhere we could politically defuse the opposition of the smaller OECD oil importers. In this context, I see the OECD/OPEC consultations you mentioned as very important provided they are not selective in membership. We should do what we can to bring them into reality by November of this year. (As we discussed, there are other reasons for this dialogue which are more important than providing an alternative to global negotiations.)

Provided that a follow-on to Cancun is successfully created and works well for two years, we should have in mind the idea of building a more permanent process, i.e. a global economic consultations organization. We have discussed for the last four years how to expand the summit consultative process and the OECD (in functional areas) without success. Now Cancun offers a possible means of achieving the same result.

Cancun participants from our perspective form an excellent base for such an organization. They include six of the summit countries (minus Italy), the combined GNP of which represent 70 percent of the annual wealth created in the market oriented international system. The heart of the EC is also present. All of the U.S.’s major trading partners and our major energy suppliers are participants (Canada, Mexico, Venezuela, Algeria, Nigeria and Saudi Arabia). The major omissions, assuming the Philippines represents ASEAN, from our perspective are South Korea, Argentina and Egypt. The fact that the integration of China into the western system in the next decade represents a major problem is a plus for their presence. The mix of communist, neutrals and non-aligned makes economics the common ground, not politics or security.

I believe this general design should be developed for a Stoessel/Rashish sign off. I have explored it with Nau, Streeb, and Creekmore who believe it of value.

1) Do you agree with the general thrust of this memo?

a) Harmless GNs or possibly their death

b) A follow-on process from Cancun

c) Developing a OECD/OPEC dialogue

d) Institutionalizing Cancun in the long-run if it proves useful and politically feasible.

2) Should I put together a draft diplomatic strategy to create a follow-on structure from Cancun beginning with the Navarrete/Rashish discussions in early July.

3) Should I draft something for you to Stoessel and Rashish on this idea?

4) Any comments?⁵

1. Source: Department of State, Bureau of Economic and Business Affairs, Investment Policy Files, 1981–1984, Lot 85D193: Cancun Summit—North/South. Secret; Sensitive.
2. Presumably a reference to the September 1980 Eleventh Special Session of the UN General Assembly in New York. See Foreign Relations, 1977–1980, vol. III, Foreign Economic Policy, Documents 348–350.
3. An unknown hand underlined “that anything can be achieved,” “too many countries, no expertise,” and “structure, threat to standing institutions.”
4. An unknown hand underlined “the U.S. does join we will die.”
5. Hormats did not indicate his agreement or disagreement with any of the options.