FOREIGN RELATIONS SERIES RELEASED
Foreign Assistance, International Development, Trade
From the Office of the Historian
December 16, 2002
President's Nixon's interest in developing bold and flexible foreign assistance and development policies, the administration's request for broad trade negotiating authority, and the emergence of a policy of sanctions in reaction to the expropriation of U.S. properties are documented in Foreign Relations, 1969-1976, Volume IV, Foreign Assistance, International Development, Trade Policies, 1969-1972, released on December 16, 2002 by the Department of State. The volume, which is part of the ongoing official record of American foreign policy, is part of the subseries of the Foreign Relations series that documents the foreign policies of the administrations of Presidents Richard Nixon and Gerald Ford. Volume III, published in March 2002, documented U.S. foreign economic policy and international monetary policy for 1969-1972.
The first three compilations in this volume deal with foreign assistance and economic development policy. The final four compilations are largely related to various aspects of international trade policy. Many trade issues were closely linked to the international monetary negotiations in late 1971 and during 1972 between the United States and the other G-10 industrial democracies. Much of the material from this period in the Trade and Commerce compilation should be read in tandem with the international monetary policy documentation in Foreign Relations, 1969-1976, Volume III.
President Nixon in 1969 was inclined to favor multilateral assistance over bilateral programs, but by 1972 had moved away from that view. The President also sought a greater role for the private sector in international development, and the Overseas Private Investment Corporation (OPIC) was established in 1969 to support U.S. investment in developing countries. The Nixon administration and Congress often had different views on the level of foreign assistance funding and its administration. Congress never voted on administration proposals to restructure the management of foreign assistance, which had been formulated by the President's Task Force on International Development, chaired by Rudolph Peterson.
While the Nixon administration supported and encouraged direct foreign investment by U.S. firms, it was also faced with a number of expropriations of U.S. investments abroad, often in Latin America. The Hickenlooper amendment to the foreign assistance act required foreign assistance sanctions on nations that expropriated U.S. property without compensation, but the administration was loathe to cut off assistance toexpropriating governments. Nonetheless, in 1972 the President released apolicy statement to the effect that the United States would not extend new foreign assistance to an expropriating nation and would seek to defer a vote, veto, or abstain on new loans from the multilateral financialinstitutions.
An administration proposal to participate in a program of tariffpreferences for developing countries was included in the legislative measure drawn up in 1972, which was sent to Congress in 1973, adopted by Congress in December 1974 and signed by President Ford in January 1975. This legislation provided the negotiating authority for U.S. participation in the Tokyo Round of GATT trade negotiations, and established the U.S. Generalized System of Preferences (GSP) for developing countries.
Textiles were a major issue on the trade policy agenda during the Nixon administration, especially in negotiations with Japan. The United States also had serious bilateral issues with the European Community, including the EC's Common Agricultural Policy and preferential trading arrangements the EC was negotiating with, among others, Spain and Israel.
Regarding East-West trade, the President favored moving from confrontation to negotiation, approving the export of advanced computers to the Soviet Union in 1971 and of high-tech silicon transistors by France to Poland in 1972. A policy of parity in trade treatment of China with the Eastern European countries and the Soviet Union was adopted on the eve of the President's visit to China in February 1972. Wheat trade and pricing issues, meat imports, particularly from Australia and New Zealand, and sales of excess materials from the Stockpile of Strategic and Critical Materials were also on the trade policy agenda. Many countries that had supplied strategic materials to the United States were concerned that surplus disposals might disrupt their commodity markets, a concern the State Department shared because of the foreign policy implications of disposal sales. Stockpile needs were the subject of frequent reviews and in some quarters abolition of the stockpile was discussed. The President himself had a "very dim view" of the stockpile program.