Office of the Historian

275. Memorandum of Conversation1

Washington, May 4, 1982, 12:15 p.m.

SUBJECT

  • Mr. Bremer re Readout of Cabinet Meeting, China

The Secretary said that the Cabinet had reached a solution on the sugar quota issue. We would take money from the quota system via agricultural committees to compensate for CBI damage to Caribbean nations.2 In other words, it would be non-preferential and there would be no use of foreign assistance funds. Hormats was to work with OMB and Treasury to put together the package this afternoon; we needed to reestablish the President’s credibility. The Secretary said this was a tight call for him. He knew somebody would come up with something and therefore had played it the way he did.

In a telephone conversation with Enders, the Secretary outlined this new approach. He said that this did not require use of foreign assistance money, but instead used tariff revenues. We could compensate for the damaged Caribbean nations. It was under the jurisdiction of agricultural committees rather than the House or Senate Foreign Affairs ones. The Treasury proposal would not face us with the foreign assistance dilemma when we could not get the money. The Secretary conceded that we would have gotten rolled anyway.

[Omitted here is discussion of issues unrelated to sugar policy.]

  1. Source: Library of Congress, Manuscript Division, Alexander Haig Papers, Department of State, Day File, Box CL 77, 3–May 1982. Secret; Sensitive. No drafting information appears on the memorandum.↩
  2. An unknown hand wrote “CBI” in the left-hand margin.↩