45. Memorandum From the United States Trade Representative (Brock) to Secretary of State Haig1
SUBJECT
- Cancun and the Prospect of Global Negotiations
As I have said to you on an earlier occasion, I am troubled by the possibility of going into Cancun in a negative or defensive position. [Page 139] Almost everywhere I have been, whether in Europe at the OECD or on my more recent trip through ten countries in Asia, there is growing concern that the United States has become isolated from the other industrial nations by its posture of outright condemnation of global negotiations. I frankly agree with the policy we follow, but I do think it’s important that we not do the right thing in the wrong way politically.
Don Regan wrote an absolutely excellent memorandum (attached) to the President on the 27th of August in which he suggested a major policy address prior to Cancun which spells out a more affirmative U.S. policy.2 If it’s too late to seize that opportunity, then Cancun itself could be the forum for such an approach which would put us in the forefront of the issue in the right way.
Two goals need to be kept in mind: (1) to establish, with clarity, the enormous—and unique—contribution the United States is making to the economic well-being of developing nations by buying 50% of all they manufacture for export, and (2) to publicize the role that we are playing in the cause of the free exchange of goods and services through international mechanisms such as the GATT. No one has a greater vested interest in an open world trading system than do the developing nations—for us it is an issue of prime importance, but for them it is a matter of survival. Thus, by our actions, we are their strongest advocate in the development of new markets for their goods, and U.S. investment and the availability of U.S. capital are major factors in the development of their domestic economic base.
In the first instance, we have an opportunity to take the lead role in calling for all industrial nations to open up their markets as we are willing to do. One point would illustrate the case. Canada, Sweden and France are three of our more severe critics in the context of North/South dialogue and the “inadequacy” of our government-to-government foreign aid approach. Why not turn the coin? When you consider the share of manufacturing imports we give to LDCs as opposed to those three countries, LDC exports to the United States have almost 6 times the share of our imports that they do in those countries. To restate the point, if Canada, France or any other country wants to really help developing nations, then the most important step it can take is to open up its markets.
A clarion call by the President of the United States at Cancun for all nations to join us in our commitment to open our markets to the products of the Third World would put us on the side of the angels.
[Page 140]A corollary to the first step, but one of equal importance, would be a call for global negotiations within the context of the specialized international agencies. In so many words, if you’re going to deal with credit or finance, you need to do so within the IMF and/or the World Bank. If you’re going to deal with liberalizing trade, you need to do so within the context of the GATT. We should not only call for more nations to join the GATT, for example, but for those who have joined, we should call for their active involvement in the working of that body. In other words, why not let the headline read “U.S. Endorses Global Negotiations—Within the Specialized International Agencies”.
We’ve done a good deal of work here at the USTR on the performance of the United States in trade, aid, and investment categories, and on the relative performance of other developed nations. The facts are that we have done a good job in providing economic opportunity for our less fortunate trading partners. It’s time the truth was known. It’s also time that the United States assumes an aggressive world leadership posture and put some others on the defensive, rather than letting them keep us there.
I spent a considerable amount of time during my recent trip to ten Asian nations trying to build a constituency for our joint effort to keep markets, particularly in Europe, open. There is, I think as a consequence of that trip, a significant awareness of how forthcoming the United States is under President Reagan. Most of those countries will not be at Cancun, but if the response I received is in any way reflective of that which might come from others with a similar vested interest in seeing more open markets, then I think we have a political opportunity of some substantial consequence.
One final point. This is not solely a philanthropic endeavor. The forces of protectionism are real and growing, particularly in Europe. In all candor, if we can enlist the assistance of the more positive developing nations in our cause, it not only will keep markets open for their product, but for ours as well. I don’t think it’s wishful thinking to believe that the United States can restore its image as the nation most honestly committed to true opportunity for those who wish to help themselves.
In sum, let’s play a little politics, and have some fun—and hopefully do some real good—in the process.
- Source: Department of State, Bureau of Economic and Business Affairs, Investment Policy Files, 1981–1984, Lot 85D193: Cancun Summit—SEN Cancun Memoranda. No classification marking.↩
- Attached; printed as Document 38.↩