Foreign Relations of the United States, 1969–1976, Volume XXXI, Foreign Economic Policy, 1973–1976

182. Memorandum From the Executive Secretary of the Department of State (Pickering) to the President’s Deputy Assistant for National Security Affairs (Scowcroft)¹

Washington, August 31, 1973.

SUBJECT

• MFN Treatment for Soviet Union Being Dropped from Trade Bill

A Congressional staff member informed the Department that Acting Ways and Means Chairman Al Ullman has decided that, barring a specific resolution by the House Foreign Affairs Committee favoring MFN for the USSR and other Communist nations, he would not report out those provisions of the Administration’s Trade Bill granting the President authority to extend most-favored-nation (MFN) treatment to the Soviet Union and other Communist nations.

Ullman believes the mood of the Congress is against granting MFN to the Soviet Union. He argues the Congress and American public opinion hold the Soviet wheat deal responsible for much of the current inflation.² Moreover, he is concerned that the continuing Jewish emigration problem and publicity over the repression of Soviet dissidents are continuing to undermine support for the MFN provisions.

Chairman Wilbur Mills underwent spinal surgery in Arkansas yesterday. The surgery went well, but Mills’ forecast he will be back at his desk in a month could be optimistic. Ullman has considerably less influence in the House, and the Trade Bill would be the first major piece of legislation he has managed. Accordingly, he is seeking to avoid hard problems such as arguing for the MFN provision.

Given Mills’ absence, Ullman’s desire to have the Trade Bill go as smoothly as possible on the floor, and continued adverse press reports regarding the situation of Soviet Jews and dissidents, MFN for the Soviet Union will fail unless a concerted and high level effort is made.³

Thomas R. Pickering

⁴

1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 403, Subject Files, Trade, Vol. VI, April 8–December 1973. Confidential; Limdis. The attached NSC correspondence profile indicates that the memorandum was sent to San Clemente, California, on September 1, where Kissinger saw it.
2. In 1972, the Soviet Union purchased more than $1 billion in grain from the United States, financed largely through a credit deal struck with the Nixon administration. The massive purchases (by the beginning of August, for example, Soviet negotiators had secured approximately one quarter of that year’s American wheat crop) led to higher grain prices in the United States, as well as Congressional investigations of the episode.
3. Treasury officials were also concerned about the implications of Mills’s illness for the trade bill. In an August 31 memorandum to Shultz, Director of the Office of Trade Policy Peter Suchman cautioned that Ullman, worried about the bill’s manageability on the House floor, wanted it “trimmed down to its essentials, with all the ‘frills’ eliminated. ‘Frills’ probably includes such things as the MFN authority, generalized preferences for LDCs, balance of payments authority and various ‘housekeeping’ authorities included in Title IV.” Suchman also warned that Ways and Means Committee members who opposed trade liberalization, “subdued until now, because of the Chairman’s [Mills’s] commitment to the bill” might “be encouraged now to launch an all out offensive on the concept of further multilateral trade negotiations.” Suchman advised “considering in the very near future what Administration strategy should now be, including which parts of the bill are absolutely essential.” (Ford Library, William Simon Papers, Drawer 23, Folder 49, Trade: 1973 (May 17–Sep))
4. Samuel R. Gannon signed for Pickering above Pickering’s typed signature.