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

46. Memorandum From the Under Secretary of State for Economic Affairs (Rashish) to the Interagency Policy Group¹

Washington, September 15, 1981

SUBJECT

• Cancun Summit (October 21–23)

There will be a meeting on Cancun at the White House on Wednesday, September 16 at 4:30 pm.² The meeting has two objectives:

1. Provide policy direction and a strategy for the Cancun Summit so preparations can be completed (speech writing, talking points, etc.).

2. Initiate directives to get decisions on a body of programmatic initiatives, some of which could be announced at Cancun if desired, which will flesh out the Administration’s policy on economic relations with developing countries.

Policy Direction and A Strategy For the Cancun Summit

Cancun will set the atmosphere for the next year or two of our multilateral relations with LDCs in general and will influence our relationships with key LDCs, although bilateral and regional issues will remain at the forefront of these relationships. The absence of the USSR but inclusion of key non-aligned nations as well as China and Yugoslavia can provide us with a major foreign policy gain if we are successful in handling the meeting and any follow-on process which may emerge.

Our objectives for the Summit are:

— Enunciate a basic US philosophy and an affirmative US approach to economic development of developing countries;

— Get agreement on follow-up arrangements for a consultative process consistent with US objectives.

— Continue the spirit of the August preparatory meeting by avoiding confrontation.

Our strategy for the meeting will be four pronged;

a) Speeches by you at the UNGA and Donald Regan at the IMF/IBRD Annual Meetings laying out US policy on economic relations with developing countries;

b) Bilateral consultations by high US officials out of Washington with key participants in their capitals to lay out our objectives;

c) Key bilaterals by the President in Cancun the day before the Summit begins to focus press on US concern for LDC problems while providing an opportunity for the President to tell other leaders just how far he is willing to go (means the President goes in a day early);

d) An effective presentation by the President in the plenary sessions at Cancun of US policy toward international economic cooperation and US economic policy including some follow-on process to Cancun, if appropriate.

The developing countries are not looking for a great deal from this Administration. They have interpreted our pronouncements of policy as neutral to negative to their objective of getting external resources and trade advantages to help them cope with economic development problems. They desire:

a) A philosophic commitment from the US to assist economic development for reasons of humanity rather than national security relations—because such a policy would ignore a large proportion of the developing world (no overlay of East/West over North/South);

b) A commitment to multilateralism rather than bilaterialism and regionalism because in the latter case their political power as a group is substantially reduced and the direct leverage of large powers increased (the real political meaning of Global Negotiations in New York); and

c) An indication of immediate help on the pressing problems of financing energy production and imports, providing adequate food security and increasing assistance to the very poor countries who participate only marginally in the world economy.

The Europeans, Canadians and Japanese will be satisfied if the LDCs are satisfied although they, too, would like to see a greater commitment of the Reagan Administration to multilateral forums.

To finish final preparations and launch our strategy, we need three key policy decisions associated with the three general LDC “desires.” We do not believe we can or need to be responsive to them all nor, in responding, should we void the basic philosophy of this Administration. The decisions on these three key questions will determine whether the President adopts a posture at the meeting of a substantive leadership role or that of a “concerned sympathetic listener” who has come to learn but not make commitments. We can accomplish US objectives with either approach but the latter will present a greater degree of difficulty.

Key Decision 1

On the issue of a philosophic commitment to assist economic development solely for humanitarian reasons in a universal and undifferentiated manner.

Recommendation: that we stay with our present policy that we will support emergency relief and refugees, that our bilateral aid will focus on the poor and that we will fulfill our commitments to the multilateral development banks, but our economic supporting funds and military aid will reinforce our political and security interests.

Key Decision 2

On the issue of multilaterialism, the key symbolic issue is Global Negotiations in New York.

The Ottawa Summit Declaration commits the participants to “participate in preparations for a mutually acceptable process of global negotiations (lower case) in circumstances offering the prospects of meaningful progress.” The press release from the August 1–2 Cancun meeting expressly states that the Summit will “facilitate” Global Negotiations in New York. Some governments have misinterpreted this language as committing us to Global Negotiations in New York which it clearly does not. This language is very broad and allows a variety of options regarding participation in global negotiations (lower case).

All agencies agree that Global Negotiations in New York are unlikely to be productive and would prefer not to participate as currently structured. There are differing views, however, on how to respond to the situation. We see the following options:

Option 1. Make a direct announcement at Cancun of our non-participation in Global Negotiations. This would forcefully underscore our position, but it runs the risk of isolating the United States and giving the appearance that the Administration lacks concern for developing countries. This option would not preclude a Cancun follow-on process on major themes of the conference.

Option 2. Make a statement at Cancun that the US cannot accept Global Negotiations as presently structured but we are willing to return to New York in an attempt to negotiate acceptable procedures and agenda. This is the least confrontational approach without accepting the G–77 concept of Global Negotiations. It would benefit the President at Cancun, but it commits us to a process in New York. It fulfills all implied commitments from the Ottawa Summit and the Cancun preparatory meeting.

To be successful in New York we would have to put on the table our own ideas for a process we don’t really desire—at a maximum it can be only be a consultative and not a negotiating forum. This option would not preclude a Cancun follow-on process on major themes of the conference.

Option 3. Develop an alternative follow-on out of Cancun that may or may not lead back to New York but might satisfy some LDCs. There are a variety of possibilities, including a Cancun follow-on at a lower level to discuss the major themes of the Summit. This could then lead to a request to the specialized agencies for studies of specific problem areas. The studies could later be presented to a Cancun follow-on meeting or to the UNGA. It is not certain that we can generate enough international support for this approach to avoid isolating us.

Recommendation: Our recommendation is option 3 if coupled with initiatives to be taken by the President. Our recommendation is option 2 if the President is to take the posture of a “concerned sympathetic listener.” It is our considered position that option 2 is forthcoming enough to finesse the President’s way through the Summit. It still allows us to attempt to negotiate for Global Negotiations that are to our liking. A straight acceptance of Global Negotiations by the President at Cancun will undercut any capability to negotiate better procedures and agenda in New York.

Key Decision 3

On the issue of initiatives for Cancun, there are only three areas that most LDCs believe must be addressed: Financing energy production and imports; providing adequate food security and increasing assistance to the very poor countries. We may wish to mention other initiatives that fit into the policy philosophy of the Administration, e.g. more liberal trade and more involvement of private enterprise in economic development.

Recommendation: If option 3 above is accepted, then we must push for initiatives in the three areas plus trade and investment before Cancun. (We address the increase in assistance to the very poor countries by getting passage of the aid bill by Congress prior to Cancun. Other initiatives are shown on the attached list.³ Asterisks indicate what we should do before Cancun.) Directives must be sent to the necessary bodies to get decisions before October 4.

If option 2 above is accepted, we still believe directives should be sent on asterisked issues to have decisions if we need them and to commence decisions on our economic policy toward developing countries.

Initiate Directives to Get Decisions on a Body of Programmatic Initiatives

Substantial efforts to redirect policies and programs have encountered very serious political, bureaucratic or budgetary problems or conflict with other US objectives. The list of actions at Attachment 1 constitutes, somewhat illustratively, the type of package that would support our themes in a meaningful way. Most are difficult and would require Cabinet or White House-level decision in order to overcome bureaucratic opposition to propose them as US initiatives. Moreover, Congressional approval is needed, requiring a major effort on the part of the White House. Thus, the major issue is how far the Administration is willing to commit itself to develop, sell and implement the economic policy toward developing countries.

Recommendation: That the White House should direct that an intensive effort be made over the next several weeks to reach agreement on a set of specific proposals, along the lines of Attachment 1, that would constitute an agenda for action in the coming months.

1. Source: Reagan Library, Douglas McMinn Files, Economic Summit Files, Mexico—Policy; NLR–369–11–29–3–6. Confidential. Drafted by Meissner and Fox.
2. According to an undated memorandum from Hormats to Haig, the September 16 meeting was cancelled. (Department of State, Bureau of Economic and Business Affairs, Investment Policy Files, 1981–1984, Lot 85D193: Cancun Summit—Miscellaneous II) In a September 16 memorandum from Hormats to Haig, Hormats provided supplemental recommendations to this memorandum. (Ibid.)
3. Attachment 1, an “Illustrative package of initiatives,” is not attached. Attachment 2, Regan’s August 27 memorandum to Reagan, is not attached; see Document 38. Attachment 3, information regarding the preparation of briefing materials for Cancun, is not attached.