MINUTES ECONOMIC POLICY COUNCIL

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP88G01117R000602150001-6
• Release Decision: RIFPUB
• Original Classification: C
• Document Page Count: 3
• Document Creation Date: December 22, 2016
• Document Release Date: June 28, 2011
• Sequence Number: 1
• Publication Date: March 7, 1986
• Content Type: MISC

Approved For Release 2011/06/28: CIA-RDP88G01117R000602150001-6
MINUTES
ECONOMIC POLICY COUNCIL
March 7, 1986
10:00 a.m.
Roosevelt Room
Attendees: Messrs. Baker, Lyng, Baldrige, Miller, Yeutter,
Sprinkel, Whitehead, Darman, Whitfield, Burnley,
Kingon, McAllister, Driggs, Hoffman, McMinn, Naylor,
Rodman, and Stucky; Ms. Lawrence, and Ms. Risque.
1. Canadian Trade Issues
Ambassador Yeutter provided an update on the status of the
bilateral trade issues with Canada. He stated that lumber
discussions, which are critical to Congressional approval of free
trade negotiations, appear to be headed toward success with
regard to our major objectives, with the important exception of
stumpage. He reported that the Canadians are expected to
introduce pharmaceutical legislation that satisfactorily
addresses our concerns. He noted, however, that the Canadian
Government recently granted approval for a generic drug, which
harms Phizer Corporation.
Ambassador Yeutter stated that the Canadians have promised a
resolution of the Gulf and Western case before Prime Minister
Mulroney arrives on March 18. He stated that there are problems
with U.S. access to Canada's alcoholic beverage market. He noted
that was a potential Section 301 case which will be discussed at
the Economic Policy Council in the coming weeks. He also stated
that consultations with Canada regarding uranium are scheduled
for the following week.
Several members of the Council expressed a sense that the
Canadians were progressing on several issues. Mr. Darman noted
that improving trade relations while not addressing the problems
in foreign direct investment would be ineffective.
Mr. Whitehead cautioned against establishing difficult deadlines
for resolution of the outstanding issues, including timber. Mr.
Burnley noted that there are also some: difficulties with Canada
regarding commercial aviation.
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CONFIDENTIAL
Minutes
Economic Policy Council
March 7, 1986
Page two
2. Farmers Home Administration (FmHA) Lending
Deputy Undersecretary Lawrence stated that fourteen states have
exhausted their direct loan obligation allocations. She stated
that if FmHA's authority were pooled nationally, it would provide
roughly thirty-two days more credit. She pointed out, however,
that pooling nationally would be unfair to northern states who
demand credit later in the year than do the southern states.
Ms. Lawrence explained that there is some uncertainty with regard
to total demand for FmHA credit. She stated that demand is down
twenty percent from this time last year, but explained that may
be due to: the lateness of the farm bill; the $4 billion in
advanced deficiency payments; or the tougher cash-flow
requirements. She stated that demand for loan guarantees is up.
Ms. Lawrence reviewed the options developed for the Council's
consideration by the Working Group on Federal Credit Policy;
1. Accept the current program authorization and direct those
borrowers eligible under the law to the guarantee program.
2. Transfer $700 million from the emergency loan program to the
direct operating loan program and $50 million from the
guaranteed business and industry program to guaranteed
operating loans.
3. Transfer up to 25 percent of the guaranteed loan program
($430 million) to the direct loan program, as specifically
allowed in the Farm Bill.
She explained that option 2 would not increase Federal spending,
because money would be transferred from one program to another.
She explained that FmHA has only obligated $46 million of the
$1.3 billion emergency loan program, so there appears to be
sufficient resources. She noted that if demand increased
dramatically, option 2 would not solve the problem.
Mr. Naylor explained that under the Gramm-Rudman Act, Congress
has capped FmHA direct loan obligations. He stated that demand
will continue to exceed the supply incoming years and noted that
FmHA is pursuing measures to reduce demand for loans.
Several members of the Council expressed concern about the high
subsidy provided through the direct loan program. Mr. Naylor
explained that FmHA has no discretion about the subsidy.
CONFIDENTIAL
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"''!"'FiOENTIAL
Minutes
Economic Policy Council
March 7, 1986
Page three
The Council also discussed the possibility that the Gramm-Rudman
Act is being eroded incrementally, particularly through farm
legislation, such as the technical amendments and assistance for
agricultural banks and the farm credit system.
Decision
The Council unanimously agreed to recommend option 2 to the
President.
CONFIDENTiAL
Approved For Release 2011/06/28: CIA-RDP88GO1117R000602150001-6