398.2544/10–2353
The Deputy Assistant Secretary of State for Economic Affairs (Kalijarvi) to the Assistant Secretary of the Interior for Mineral Resources (Wormser)1
Dear Mr. Wormser: Our meeting on October 22 was most helpful to me and I was happy to have the opportunity to discuss our respective approaches to the problem of international commodity agreements. I have subsequently received your letters of October 22 and 23,2 and wish to acknowledge Mr. Lewis’ letter of November 23 on the same general subject.
Your letter of October 22 reiterates your opposition to international commodity agreements. I know that for the sake of the record you will also wish to note that we exchanged views on basic economic philosophy and agreed that we both strongly support free enterprise in the traditional American sense. Our fundamental objectives are therefore the same. It is in our approach to these objectives that we may differ. We noted that the Department of the Interior is primarily subject to the pressures of national and domestic [Page 1050] considerations, while the Department of State has, in addition to domestic considerations, responsibility for the most effective and orderly relationships between the United States and other governments. In the light of this, I believe we concluded that the best interests of the United States dictate that in matters of tin and other international commodities we seek a position which will permit our respective agencies each to perform its responsibilities.
With regard to the draft instructions for our delegation to the tin conference, you indicated your desire for an expression of lack of enthusiasm on the part of the United States for this project and proposed that the role of the United States delegation be a purely passive one, except where United States interests are involved. My rejoinder was that such a role would deprive the United States delegation of powers and activities to the point where it would be placed on the defensive every time it moved. Thus, it would be at a distinct disadvantage as compared with other delegations, and serious doubts could be raised as to the effectiveness of such a role in protecting United States interests.
As I recall, you said you did not find our draft instructions objectionable, but that your memorandum of comment was an indication of your thinking.
You voice grave concern over the sacrifice of fundamental American economic freedoms as too great a price to pay to create political stability. I appreciate your concern on this matter, but doubt that these are the alternatives. Surely, the beneficiaries of the International Wheat Agreement do not feel that they have sacrificed any liberties or freedoms by participation in the Agreement. The people who appeared before Congressional Committees to testify in support of the Wheat Agreement were farmers, who as a group are among the most ardent supporters of our basic concept of economic freedom. In addition, most of the important segments of the United States sugar industry are strongly supporting our participation in the recently negotiated Sugar Agreement. Our own Vice-President has within the past few weeks made public announcement of the urgency of tin and rubber stabilization, and I submit that, like the farmers, he too is very jealous of fundamental American economic freedom. The matter of international commodity agreements, therefore, is neither all black nor all white, but calls for a judgment in each instance as to whether or not the basic interests of the United States will be forwarded and promoted by participation.
Thus, you will appreciate that I cannot agree that the principle at stake in considering the issue of commodity agreements is: “Shall we abandon our position of fostering open competitive markets in the sphere of foreign trade, while insisting upon it domestically, or shall we hope that, through the example we have set for [Page 1051] the world of what an open competitive system can accomplish for a people, the rest of the world will slowly, but surely, imitate our example, just as Germany has begun to do?”
Starting from the point that the basic concept of the United States Government is a presumption against entering into international commodity agreements, the question in each instance is whether a particular commodity constitutes a problem by itself that calls for exceptional treatment, namely an agreement regulating production, marketing and pricing over, above and beyond the ordinary freedom of competitive trade in international affairs. Thus, you will see that the International Wheat Agreement and the Sugar Agreement constitute exceptions to our rules, exceptions which have been heartily supported by affected groups in this country. There was no opposition expressed in the hearings held on renewal of the International Wheat Agreement when it came up for ratification by the Senate during the last session of Congress.
Tin today constitutes a problem by itself. You are familiar with the relevant facts; but permit me to repeat here two considerations that make tin a most urgent problem internationally and one directly related to the security interests of the United States. The first consideration is that our stockpiling in tin has been proportionately larger than in other commodities. Therefore, the relatively abrupt discontinuation of stockpiling has had a direct bearing on the existence and the size of the international imbalance in tin. Countries like Indonesia and Malaya have not been slow to point out this fact to us. As to the second consideration, the Soviet bloc, which needs tin, has not been able to stockpile that commodity over the past few years because of our stockpile buying. That situation could be changed as a result of a persistent surplus. An international agreement in tin, therefore, possesses security aspects which merit special consideration.
We believe that the United States has real interests at stake in the forthcoming conference on tin. These interests can be taken care of effectively only by our exerting a positive influence on the form of any agreement that may be produced and this influence can be exerted only through our participating as a negotiator. It may not be amiss in this connection to note that the Industry Advisory Committee at its July 29 meeting in the Department of Commerce was overwhelmingly of the conviction that the United States delegation should take an active part in any tin conference which might be held to negotiate an agreement. Moreover, the representatives of the tin consuming industries in the United States have made clear that their attitude toward an agreement would depend upon the specific provisions actually negotiated.
Sincerely yours,
- Drafted by Deputy Assistant Secretary Kalijarvi and Nichols on Nov. 9, and cleared with Assistant Secretary for Economic Affairs Waugh.↩
- For the letter of Oct. 22, see p. 1029; the letter of Oct. 23, not printed, transmitted the draft list of instructions prepared in the Department of the Interior for use by the Department of State in issuing guidance to the U.S. Delegate to the U.N. Conference on Tin. The list was not attached to the copy of the letter in Department of State files. (398.2544/10–2353)↩
- Not found in Department of State files.↩