ECONOMIC POLICY COUNCIL MEETING ON US TRADE POLICY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87T00759R000200190010-5
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 7
• Document Creation Date: December 22, 2016
• Document Release Date: December 13, 2010
• Sequence Number: 10
• Publication Date: August 8, 1985
• Content Type: MEMO

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The Director of Central Intelligence
Washington, D.C. 20505
National Intelligence Council
NIC 03988-85
8 August 1985
MEMORANDUM FOR: Director of Central Intelligence
Deputy Director of Central Intelligence
FROM: David B. Low
National Intelligence Officer for Economics
SUBJECT: Economic Policy Council Meeting on US Trade Policy
1. On 7 August I attended an Economic Policy Council Meeting chaired
by the President in which the Secretary of the Treasury presented to the
President the attached memorandum outlining a revised approach for the
Administration to international trade policy.
2. The meeting consisted of a general discussion of the issues and
no decisions were made. It is expected, however, that the President will
make decisions on the open issues over the next several weeks with a view
toward announcing the new approach in early September. There was a
general consensus that, in response to the severe protectionist pressures
coming from the Hill and the 150 or more trade bills which have been
proposed, the Administration needs to initiate an aggressive strategy of
articulating US trade policy. This is likely to include a Presidential
speech. It is also likely to include an attempt to explain that a
campaign against unfair trade practices is not going to cure the trade
deficit.
David B. Low
Attachment:
As Stated
CONFIDENTIAL
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a
SUBJECT: Economic Policy Meeting on US Trade Policy, 7 August 1985
NIO/Econ(David Low):rr~ 8 August 1985 NIC 03988-85
Distribution:
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1 - Executive Registry
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I - VC/NIC
1 - NIO/EURA
1-D/OGI
1 - D/OEURA
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1 - D/OEA
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1 - NIO/Econ
7NI0/Econ
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August 6, 1985
MEMORANDUM FOR THE PRESIDENT
FROM: THE ECONOMIC POLICY COUNCIL
SUBJECT: Trade Policy Strategy
To help ensure a more consistent, and effective, trade
policy, the Economic Policy Council has been developing trade
principles and strategies with which to guide the Adminis-
tration's trade actions and initiatives. The purpose of this
memorandum is to share our progress with you, outlining areas of
substantial agreement and pointing out areas that remain to be
resolved. We hope to discuss these remaining, unresolved issues
with you beginning now and concluding in early September, before
Congress returns, so that we can set the parameters of U.S. trade
policy.
The trade and economic policy statement outlined below has
five major elements: (1) pursuing sound fiscal, monetary, and
regulatory policies; (2) ensuring fair trade; (3) promoting U.S.
exports; (4) pursuing multilateral and bilateral trade
negotiations; and (5) limiting exceptions to free trade.
AGREED UPON PRINCIPLES AND STRATEGIES
Macro-Economic Policies
1. The U.S. must recognize the adverse impact of excessive
government spending and budget deficits, the recent
strength of the dollar, and government regulations on
the U.S. trade deficit.
2. The Administration is reviewing, and will seek to
amend if warranted, anti-trust laws or regulations that
impede our international competitiveness.
3. The Administration will consider the trade implications
when developing further deregulation initiatives. In
some cases, deregulation may increase imports without
creating new opportunities for U.S. exports.
Ensure Free Trade
1. The U.S. will vigorously pursue its trade interests
under U.S. law, the GATT, and other-appropriate
international agreements. In addition, the U.S. will
take tactical measures (e.g. those taken in the recent
pasta/citrus dispute) aimed at eliminating unfair
foreign trade practices.
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2. The Administration will continue vigorous enforcement
of U.S. antidumping and countervailing duty laws and
will see that other countries live up to their trade
agreement obligations with the U.S.
3. The Administration will increase efforts to protect
intellectual property rights (patents, copyrights,
trademarks); we will accelerate work with a view toward
possible Administration initiatives in this area.
Promote U.S. Exports
1. The U.S. should seek to redress the trade deficit
through increasing exports instead of restricting
imports.
2. The Administration will work with private sector
advisory groups (e.g., the President's Export Council)
to improve export promotion and to help companies look
at global. markets.
3. The Administration will evaluate Federal export
promotion activities during the fall budget review to
improve their effectiveness.
Promote Multilateral and Bilateral Trade Negotiations
1. There is a great need for a more comprehensive, more
disciplined and more effective system of world trade
rules. The system needs fixing.
2. The Administration will maintain efforts to launch a
new GATT round based on already agreed-upon U.S.
objectives.
3. The Administration will examine possible bilateral and
plurilateral negotiating opportunities, both to improve
market access and fairer trade and promote wider
interest in the multilateral negotiating process.
Limit Exceptions to Free Trade
1. The Administration is committed to market-based
solutions to trade problems, at home. and abroad, but
occasional exceptions, in the form of relief from
import competition may be necessary.
2. Import relief, if appropriate, should be temporary,
decline over the period of relief, and lead to greater
international competitiveness by the industry.
3. The Administration reserves the right to respond to
foreign policies and imports that threaten industries
essential to our long-term national security.
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4. The Administration will vigorously enforce our export
control laws to prevent the leakage of sensitive and
critical technology of military significance to potential
enemies. At the same time, the Administration recog-
nizes the realities of foreign availability and the
dependence of future technical advances on healthy,
creative U.S. suppliers and free world exchange of
scientific information.
ISSUES OF DISPARATE VIEWS WITHIN THE ADMINISTRATION
Macro-Economic Policy
1. How should the U.S. pursue our policy of encouraging
trade partners to adopt appropriate policies designed
to accelerate their real economic. growth, in order to
contribute to a gradual-strengthening of their
currencies and enhanced U.S. exports? Should the U.S.
emphasize. removing structural rigidities that impede
the market? Should the U.S. promote convergent fiscal
and monetary policies and if so, in what forums?
2. Should the U.S. host a high-level meeting of the major
industrial countries to review the issues in implement-
ing the findings of the G-10 monetary studies, such as
improving the floating exchange rate system, or con-
tinue to rely on the Interim Committee as the forum for
following up on the G--10 studies?
3. Should the U.S. seek to ease the debt burden of those
countries carrying out successful adjustment in
accordance with IMF programs, so as to increase their
ability to increase imports? What effect would such a
policy have on the debtor nations' self-discipline, and
would such policies be effective in encouraging
imports?
Ensure Fair Trade
1. Should the U.S. Government initiate actions to address
foreign unfair trade practices, or continue the current
policy of responding only to requests by U.S. indus-
tries for actions to counter unfair practices? What
criteria should be used in judging what is unfair and
whether action should be taken? Should the U.S.
Government take such actions immediately or warn other
countries that it will take such actions unless they
resolve these practices by a certain date?
2. If the U.S. Government initiates actions to address
foreign unfair trade practices, should it focus on
restricting access to the U.S. market or using
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"market-opening" leverage, e.g., threatening free trade
agreements with other countries?
3. Should the Administration support market opening
legislation that permits or requires the President to
close U.S. markets foreign markets are not opened?
Should the U.S. response be limited to reciprocal
markets or may it cover a range of markets? How likely
are other countries to open their markets if they are
faced with the prospects of closed U.S. markets?
4. Should the U.S. establish a deadline for ending the
MOSS and yen/dollar talks, expecting such a deadline to
serve as a catalyst for Japanese action? Should the
MOSS talks include reports setting out specific commit-
ments and follow-up procedures? Should we initiate
MOSS talks in new sectors or limit them to the four
areas currently under negotiation?
5. Should the U.S. counter proven cases of foreign
industrial targeting? What is targeting? Would such
countering harm or help the U.S. economy?
6. How aggressively should the Administration match export
subsidies by our competitors, while continuing to press
for agreements eliminating such subsidies? Should the
Administration exceed, match, or only partially'counter
such subsidies? Should the Administration expand or
maintain the current levels of budget resources?
Limit Exceptions to Free Trade
1. Should the U.S. protect industries that are not or
cannot be competitive under fair trade conditions? Is
national security the only reason for protecting
industries that are not competitive, or are there other
considerations including employment or the need to
provide a transition or adjustment period?
2. Should the Administration modify the dislocated worker
program in the Job Training Partnership Act (JTPA) to
focus more resources on workers dislocated by imports?
While the budget resolution assumes that the Trade
Adjustment Assistance program will be extended beyond
its September 30 expiration date, should the
Administration reconsider its opposition to extension
and, if so, how should it propose modifying the program
to improve its effectiveness?
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James A. Baker III
Chairman Pro Tempore
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