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

26. Information Memorandum From the Assistant Secretary of State for Economic and Business Affairs (Hormats), the Assistant Secretary of State for International Organization Affairs (Abrams), and the Acting Director of the Policy Planning Staff (Roche) to Secretary of State Haig¹

Washington, undated

SUBJECT

• Global Negotiations

Background

Since the late 1960’s the developing countries have been engaged in a sustained and continuous effort to bring about major changes in the international economic system by creating a political forum at the U.N. for simultaneous negotiation of international economic issues. In December 1979, the U.S. joined in the consensus adopting a UNGA resolution calling for preparation of Global Negotiations.² Secretary Vance committed the U.S. to participate in the preparatory process. However, we made it clear at that time that we would participate in the actual Global Negotiations only if mutually acceptable procedures and agenda could be agreed.³

During active preparation of procedures and agenda throughout 1980, the U.S. faced strong political pressure from both developed and developing countries, albeit for different reasons. At the 11th Special Session of the UNGA in September 1980, the external pressure on the U.S. was so intense that President Carter was involved in assessing the US position. He declined three times to change the position (described on the next page.)⁴

The opening position of the Reagan Administration at the U.N. was that we wanted to reassess the issue thoroughly. Privately and in bilateral meetings we expressed strong skepticism about the value of Global Negotiations. In addition, the new Administration felt that an early return to the preparation of procedures and agenda could involve the U.S. in confrontation just prior to the Ottawa and Cancun Summits, thereby souring the general atmosphere surrounding these meetings. On May 5 the U.S. proposed in the U.N. that the issue of Global Negotiations be deferred at least until after the Cancun Summit.⁵ We argued that the President and other heads of state should have the benefit of the consultations at Ottawa and Cancun prior to making any decision on Global Negotiations.

US Position

Treasury strongly believes that there are more risks associated with Global Negotiations than potential benefits. This view is broadly shared at State. Our objective throughout the preparatory process has been to protect our interests through proper procedures and a neutral agenda. The major substantive reasons for our skepticism about Global Negotiations proposals are that:

— present draft procedures do not protect the functions and competence of the IMF, IBRD, and GATT;

— the concept of simultaneous negotiation on all major economic issues is unproductive and leads to the linking of unrelated issues;

— the negotiation will be structured on the South versus North format of the UN, with little opportunity to differentiate between the real development needs of individual countries;

— there is an implicit assumption of many of the proponents of the proposals for Global Negotiations that key international economic institutions and certain forms of trade (commodities) and investment (multinational corporations) retard development in the developing countries and must be dramatically restructured. Their initial position has also been that domestic policies of the developing countries are outside the negotiation. There is no mention of the aid or trade performance of the USSR or bloc countries. The U.S. cannot accept these assumptions and reasonably expect to succeed in negotiating agreements favorable to US interests and to the international economic program of the Administration.

Positions of Other Countries

The developing countries favor Global Negotiations—with the exception of the oil exporters who are skeptical but are committed to Global Negotiations to stave off pressure from oil-importing developing countries—and have nothing to lose given their perception of the negotiations. The UK and FRG stood with us in September 1980, but their support has faded as political pressure has built on them to close ranks with other EC nations, Japan, and Canada. These countries believe they can protect their interests through the only agreed procedural safeguard—decision by consensus. Traditionally in the U.N., these industrial countries have placed themselves between the U.S. and the developing countries on economic issues. They have relied on the US to protect their economic interests and to take the political heat for defending them. This same pattern of attitudes applies to Global Negotiations.

If we return to preparatory negotiations, we can expect continued US isolation on procedural and agenda issues.⁶ We will face increased pressure from the Europeans, Canada, and Japan to make concessions and accusations by G–77 leaders of inflexibility and a private intention to kill Global Negotiations.

1. Source: Reagan Library, Douglas McMinn Files, Subject Files, Global Negotiations; NLR–369–3–22–3–2. Confidential. Drafted by Meissner on July 16; cleared in E and S/P and by Washburn. Haig wrote at the top of the memorandum: “No way—I want to seize initiative—you know my view. Tell me how NOW!!” Haig’s initials are stamped in the top right-hand corner of the memorandum, indicating he saw it.
2. See footnote 5, Document 14.
3. Haig placed a checkmark at the end of this sentence and wrote “great then!” underneath the paragraph.
4. Haig underlined “He declined three times to change the position”, placed parentheses around “described on the next page”, and wrote “Why not? wouldn’t pay bills!” under the paragraph. For documentation on 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.
5. See Document 14.
6. In a July 13 memorandum to Haig, von Wechmar requested that the United States resume its participation in the consultation process of exchanging views on Global Negotiations. Von Wechmar proposed resuming consultations during the last ten days of August in New York on two drafts of basic documents (a set of rules of procedure and an agenda) that would lay the groundwork for a future global conference. (Department of State, Bureau of Economic and Business Affairs, Investment Policy Files, 1981–1984, Lot 85D193: Cancun Summit—Global Negotiations—Background)