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

60. Memorandum From the President’s Assistant for National Security Affairs (Allen) to President Reagan¹

Washington, undated

SUBJECT

• Cancun Summit, October 22–23, 1981

From our perspective, the International Meeting on Cooperation and Development in Cancun, Mexico is another step in the effort to explain and project U.S. policies for domestic and international economic recovery and worldwide development. In July, you met in Ottawa with America’s principal industrial allies accounting for more than one-half of the world’s wealth. At Cancun, you meet with these industrial partners again (minus Italy) plus fourteen nations of the developing world. Altogether, the countries at Cancun account for two-thirds of the world’s population.

The Cancun Summit is the first such meeting of heads of government or state from both industrial and developing nations in the postwar period (excluding meetings of the Commonwealth nations). It comes after a decade or more of increasing political activity among developed and developing nations at the United Nations and other world conferences. It could offer an opportunity to influence in a practical way the direction of the international development dialogue, which has become increasingly rhetorical and polarized.

There is a growing sense of realism in some developing nations as they come to terms with the second oil price shock of 1979 and undertake domestic adjustments to reduce budget deficits and increase investments and exports. Even the tone of recent U.N. meetings has mellowed. The themes of your speeches prior to Cancun have sought to reinforce this developing focus on domestic responsibilities and practical international cooperation.

Nevertheless, the dialogue has gained considerable polemical headway over the past decade. It will take some time and firm U.S. leadership to refocus the issues. Some brief background on the “road to Cancun” may help to suggest how we arrived at this meeting and to put it into perspective.

Background

The majority of the developing countries, particularly in Asia and Africa, acquired their independence and joined the United Nations in the 1950s and early 1960s. Almost immediately these countries began to advocate a new set of institutions and principles to guide international economic relations, arguing that the General Agreement on Tariffs and Trade (GATT), World Bank and International Monetary Fund (IMF) had been created without their participation, practiced weighted voting which kept the developing countries in the minority, and benefitted predominantly the industrialized countries.

The first new institution to be created was the United Nations Conference on Trade and Development (UNCTAD). It met in general conferences in 1964 and 1968 and by the end of the decade created the Generalized System of Preferences (GSP). GSP provides preferential treatment for developing countries in trade by permitting duty-free entry of their goods, in contrast to the “most-favored-nation” principle of GATT (in which all trading partners, whether developed or developing, are treated equally). In other words, GSP sought to give the developing countries a break in their attempt to gain new markets for their products.

The pressure for new economic institutions and principles accelerated in the 1970s. The success of OPEC in 1973 encouraged developing nations to push through new resolutions in the UN in 1974 calling for the establishment of a New International Economic Order (NIEO) and creating the “Charter of Economic Rights and Duties of States.” At subsequent North-South meetings, including the Conference on International Economic Cooperation (CIEC) which met from December 1975 to May 1977, developing countries tabled the Integrated Commodity Program (ICP) designed to imitate oil price increases by establishing a Common Fund and commodity agreements to support and increase prices in some eighteen commodities exported primarily by developing countries. Developing countries also advocated the negotiation of codes to regulate private investment and the transfer of technology.

Altogether, from 1972–1981, nine major world conferences (food, environment, population, etc.), three general conferences of UNCTAD, and three Special Sessions of the UN General Assembly (UNGA) were held on specific development issues. After the conclusion of the Conference on International Economic Cooperation (CIEC) which included only selected countries, developing countries began to call for comprehensive negotiations in a global forum to deal with the interrelationship of issues, to go beyond the mere talk or recommendations of previous conferences, and to take decisions on a universal, one-nation, one-vote basis.

In December 1979, the UNGA passed Resolution 34/138 calling for the launching of Global Negotiations (GNs) at a special session of the UN in August 1980. The Special Session failed to reach agreement on the terms and conditions of such negotiations. Mexico and Austria then proposed convening a mini-Summit between industrial and developing countries. Originally recommended by the Brandt Commission report,² the mini-Summit or, as it is now known the International Meeting on Cooperation and Development in Cancun, Mexico, became the principal vehicle for pressing ahead toward comprehensive Global Negotiations.

Dynamics of Cancun

As Al Haig’s memo suggests, the Cancun meeting is informal, has no specific agenda or communique and is not intended to take any decisions.³ Its results have no binding force whatever. Nevertheless, some of the countries coming to Cancun actually expect specific decisions on two issues in particular—launching of Global Negotiations and establishment of a World Bank Energy Affiliate. President Mitterrand has circulated a memorandum indicating that he will seek to force decisions on these two issues. Reportedly, Mexico supports France, although Lopez-Portillo assured Ambassador Gavin, after inquiries were made, that “the Cancun Meeting is not the proper forum for discussing the launching of the Global Negotiations.” Algeria, Guyana, Tanzania, Canada and Sweden are also likely to press for a decision on GNs. All other countries will acquiesce in such a decision, even though some are at best lukewarm. Yugoslavia, India, the U.K. and Germany will take moderate positions and could be helpful to the United States in heading off a confrontation on this issue.

Your strategy is to hold the meeting to its original purposes—to exchange views, “to listen and to learn,” as agreed at the Foreign Ministers’ Preparatory Meeting in August, on “the future of international cooperation for development and the reactivation of the world economy, including areas such as food security and agricultural development; commodities, trade and industrialization; energy; monetary and financial issues.” We seek a good exchange on these issues among the heads of state. Other officials may discuss the detailed conditions and requirements to resume the dialogue. It is unlikely that an agreement to resume the dialogue will be reached easily, but it is possible that the meeting could produce an atmosphere that would lead to a consensus in the co-chairmen’s summary consistent with U.S. policy.

Agreed U.S. policy is that we will not return to preparatory talks under Resolution 34/138, but would resume talks with all countries, if present texts are set aside and new agenda and procedures worked out on the basis of detailed U.S. conditions. (See memo at Tab 3 in Global Negotiations section of this briefing book).⁴

If the United States remains firm with this position, the more moderate developing countries, seeking a cooperative spirit at Cancun, may be willing to accept less than an immediate return to preparatory talks, including a possible follow-up to Cancun where the United States could press the details of its conditions to resume talks.

1. Source: Reagan Library, Executive Secretariat, NSC Trip File, President Reagan’s Participation in the International Meeting on Cooperation and Development Cancun, Mexico 10/21/1981–10/23/1981 Plenary Sessions: Multilateral Economic Issues (Binder); NLR–755–2–38–1–9. Secret.
2. See footnote 2, Document 27.
3. See Document 58.
4. Not attached.