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

62. Minutes of a Cabinet Council on Economic Affairs Meeting¹

Washington, October 13, 1981, 8:45 a.m.

Attendees: Messrs. Regan, Baldrige, Schweiker, Stockman, Brock, Weidenbaum, Anderson, Porter, Darman, Fuller, Clark, Lyng, Davis, Lovell, Sprinkel, Savas, Kudlow, Dederick, Hormats, Nau, Hopkins, Cribb, Gribbin, Elliott, Baroody, Leland, and Ms. McLaughlin

1. Cancun Summit

The Council reviewed a paper on “U.S. Policy Regarding ‘Global Negotiations’ and Development.”² The paper outlined the U.S. position on global negotiations and summarized the substantive themes and initiatives that comprise the administration’s approach to development.

Deputy Secretary Clark observed that the State Department felt the paper did an excellent job of summarizing the most recent meeting with the President on Cancun, recommended some modifications in phraseology in the paper, reported on a letter to Secretary of State Haig from Foreign Minister Genscher,³ and summarized information on the positions some developing countries might take at the conference.

The discussion centered on U.N. Resolution 34/138, the conditions under which the United States would be willing to participate in talks with other countries, the investment insurance arrangements envisioned under the administration’s proposal, the prospects for congressional support for a new international investment insurance scheme, the concept of a general agreement on investment allowing countries to harmonize their investment policies, the record of the Overseas Private Investment Corporation, and the cost of providing tax credits for investments in developing countries.

The discussion also included consideration of extending the Generalized System of Preferences, congressional attitudes toward GSP, the need to urge countries receiving U.S. agricultural assistance to move toward market-oriented agricultural policy, and the U.S. energy proposals.

Decisions

The Council approved amending the paper’s treatment of global negotiations to include the following:⁴ “We would ask the Cancun countries to agree to instruct their delegations and encourage others to put aside the substance and agenda of U.N. Resolution 34/138 and begin afresh to work out a procedural basis and agenda that would offer the prospect of meaningful progress.”

The Council approved modifying the four conditions under which the U.S. would be willing to participate in talks to state that “such talks must be entered into in a cooperative spirit rather than one in which views become polarized and chances for agreement are needlessly sacrificed.”

The Council approved with respect to investment insurance arrangements indicating that the U.S. would explore the further development of multilateral investment insurance guarantees, arranged through an “International Investment Insurance Agency” (within the framework of the IBRD), and building on the successful bi-lateral experience with OPIC.

The Council approved stating that the U.S. would attempt to promote a general agreement on investment allowing countries to harmonize investment policies and to negotiate mutually beneficial improvements in the climate for investment.

The Council approved stating with respect to tax measures that an effort will be made to identify developed and developing country tax measures which might increase market-oriented investment from both external and domestic sources in the LDCs.

The Council approved stating the U.S. will join with LDC’s in working out an effective safeguards code that reflects mutual concerns and interests.

The Council approved announcing that the U.S. will continue to support the generalized system of preferences and will take the lead in urging other developed countries to match us in expanding developing nations’ access to markets.

The Council approved urging that recipient countries move toward market-oriented agricultural policies which permit prices to find their own levels without production or consumption subsidies.

The Council approved stating that the U.S. would consider intensified energy training programs for technicians from developing countries, along with increased emphasis on helping LDCs assess and more efficiently utilize their resources.

1. Source: Reagan Library, Ralph C. Bledsoe Files, Office of Policy Development, Cabinet Councils, Other Cabinet Councils, Cabinet Council on Economic Affairs III. No classification marking. Drafted by Porter. The meeting took place in the Roosevelt Room at the White House.
2. An unknown hand underlined “Global Negotiations.” An updated version of this paper is printed as Document 63.
3. A copy of the letter from Genscher to Haig, transmitted October 9 by telegram, is in the Department of State, Bureau of Economic and Business Affairs, Investment Policy Files, 1981–1984, Lot 85D193: Cancun Summit—Miscellaneous III. The copy provides both a German language version and an English translation.
4. An unknown hand wrote “CD’s” in the left-hand margin and underlined “approved amending the paper’s”.