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

33. Memorandum From the Assistant Secretary of the Treasury for International Affairs (Leland) to the Cabinet Council on Economic Affairs¹

Washington, August 5, 1981

SUBJECT

• Cancun Summit: Background for CCEA Discussions on August 6, 1981²

The Cancun Summit, co-hosted by Mexican President Lopez Portillo and Austrian Chancellor Kreisky, will involve 22 Heads of State and their Finance and Foreign Ministers from industrialized and developing countries (Annex I).³ Participants will exchange views on the “future of international cooperation for development and the reactivation of the world economy.” The Summit was originally conceived by the Brandt Commission to organize a program of priorities on North-South issues, but was embraced by the co-hosts and other sponsors to provide impetus to the stagnating North-South dialogue.

Last weekend’s preparatory meeting of Foreign Ministers dealt with procedural rather than substantive matters.⁴ Canadian Minister MacGuigan gave a report on the Ottawa Summit communique, which was perceived as a positive step in relations between developed and developing countries. The meeting confirmed that no substantive decisions will be taken at the Summit, there will be no fixed agenda to channel discussions, and no communique will be issued.

The main area of concern raised by the preparatory meeting, however, is the press release (Annex II)⁵ indication that the Summit should “facilitate agreement” on the stalled Global Negotiations (GN)—a statement drawn from the formal invitation to Heads of State to attend the Summit. While President Reagan’s written acceptance directly challenged the GN-Cancun linkage by stating that the Summit should not “take up procedural questions pending in other fora,”⁶ all participants except the United States felt that Global Negotiations would be an appropriate topic for discussion at Cancun. Although all others also indicated a hope that there would be an agreement on Global Negotiations, not all agreed that it should be the purpose of the meeting. Unless the United States is willing to capitulate and be led into GN, President Reagan will have to be prepared to take a strong stand against GN, or at least maintain total unwillingness to discuss the issue at all until after Cancun.

In order to avoid the global negotiations, the President will need a plan for a follow-up on the Summit, possibly another meeting of the same group a year or two later in Austria (the country co-hosting the Cancun Summit). It is unlikely that such a proposal would be acceptable as the LDCs at the August 1 meeting stressed the fact that the Summit was in no way to be a substitute for Global Negotiations.

It is clear that there could be no advantage to the United States joining GN as the basic concept is that a central body under United Nations auspices would negotiate on a wide range of economic issues (the same issues that will be discussed at the Summit, i.e., energy, food, trade, development and monetary) and through a process of trade-offs among the substantive areas some sort of package agreements could be reached. There would be almost nothing in the package that would be an advantage to the United States. The issue would be a matter of how much could be taken from the developed world (and particularly the United States) and given to the developing world. Global Negotiations would constitute a bloc-oriented process wherein the LDCs (the so-called G–77—now comprising over a hundred nations) would stay together as a bloc whereas the developed nations would not.

If the United States decides to delay its rejection of the GN until after the Summit, it would still have to come up with alternative ideas which would involve showing how all the topics to be discussed in GN could more properly be discussed in other fora. (See Annex III)⁷

At the August 1 meeting there was no indication of the substance of GN other than the statement that it was to be for negotiating a “new international economic order.” If the United States is to stay out of GN, it will have to be prepared to show how the negotiations would tend to undermine existing institutions and would be inconsistent with the Reagan policy against increased bureaucracy—they would create another unwieldy international bureaucracy to perform functions already better performed elsewhere. In addition, GN would accentuate the “North-South” differences and be antithetical to the Administration’s preference for dealing with developing countries on an individual or regional basis and addressing concrete problems in an pragmatic manner.

The August 1 meeting did not commit the United States to GN but each statement on the issue (e.g., the Ottawa Communique, the Cancun press release) moves the U.S. closer to commitment.

Before the Summit, there will have to be a firm decision to resist all pressure to be dragged into Global Negotiations or the United States will be forced to accept them. A decision will have to be made that whatever the pressures, it is better to keep out now than to have to walk out after they have begun.

1. Source: Central Intelligence Agency, Office of the Director of Central Intelligence, Job 84B00049R: Subject Files (1981–1982), Box 17, Folder 3: Cabinet Meeting Re: Economic Situation in Poland. Confidential.
2. A copy of the minutes of the CCEA meeting on August 6 is in the Reagan Library, Ralph Bledsoe Files, Office of Policy Development, Cabinet Councils, Other Cabinet Councils, Cabinet Council on Economic Affairs II. The Council reviewed this memorandum and discussed the preparatory meeting of Foreign Ministers held in Cancun. The minutes note that “most of the discussion centered on the quest for global negotiations by many of the developing countries and the position that the U.S. government and its representatives should take on this issue at the Summit. There was a general consensus on the need for the U.S. to develop a constructive alternative that will permit the U.S. to present a positive program that will provide mutual benefits for developed and developing countries.”
3. Annex I, the list of countries whose Heads of State or Government were being invited to the Cancun Summit, is attached but not printed.
4. See Document 32.
5. Annex II, the press release of the August 1–2 Cancun Summit preparatory meeting issued August 2, is attached but not printed.
6. See Document 21.
7. Annex III, “Agenda Items for Global Negotiations,” is attached but not printed.