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

208. Memorandum for the File¹

Washington, May 23, 1974.

RE

• Trade Portion of Discussion at Breakfast, 5/23/74 between the President and Senators Long and Bennett ²

In response to the President’s query regarding progress on the Trade Bill, Long first referred to his belief that the trade statistics were falsely presented in that they included gifts, such as PL 480, among exports.³ He then said that he believed and he thought Flanigan agreed that any bill should result in improving US exports and insisting on “reciprocity” in terms of trade with other countries. Long further said that so long as we are maintaining a lot of troops abroad and engaging in foreign aid that we obviously had to sell more than we bought and therefore should insist on a system giving the US a trade surplus.

Flanigan pointed out that Commerce’s current statistics now show trade figures on the long basis as well as on the current basis to which Long agreed. Flanigan also pointed out that if we could import more than we exported by virtue of investment income that would be all right with Flanigan as long as the basic accounts were in balance. Flanigan further pointed out that by virtue of the President’s actions the United States’ basic accounts were in balance in 1973 for the first time in 15 years.

Long suggested that short term flows may have caused the 1973 balance (and Flanigan said he did not include such flows) and congratulated the President on having made more progress in the trade field, as well as in the offset field, than any previous President.

The President said he realized that Title IV was a problem. Flanigan suggested that perhaps markup on the other Titles of the Bill could go forward even if Title IV remained unsolved. The President said he expected Kissinger to get to work on Title IV on his return⁴ and a conversation then ensued on the position of the Jewish community and its leaders on Title IV, including the beginning of a lessening of support for Title IV by some portion of the Senate.

Timmons asked Long if he could complete work in a month on the Trade Bill, assuming Title IV were solved and therefore have it on the Floor by the end of June. Long said he was reluctant to make a commitment on a date but said that at least by the end of that time frame agreement on a good portion of the Bill could be reached and areas of disagreement would be clear.

The President then said that we at least agree that work will begin immediately on the Trade Bill, making clear that this work would precede work on the other issues (health, taxes, energy) by the Finance Committee. Long said that as soon as the Senate comes back from its recess next Tuesday⁵ he would “call some executive committee meetings” to begin work. He indicated the desire to talk about the overall direction of the bill. Bennett said he hoped these sessions would not start before his return on June 3, but Long gave no such assurance and indicated his willingness to talk to a White House representative on the overall direction.

The President then pointed out how urgent it was that we have a trade bill not only for resolution of the Title IV problem as it was part of the overall negotiations with the Soviets, but also to give us the tools to negotiate on trade. He made perfectly clear that he shared Long’s view that his interest was in the improvement of the American position as a result of the trade negotiations and did not reflect soft heads primarily interested in developing countries, etc. He stressed the fact that without a trade bill we were unable to negotiate in the best interests of the people of the United States.

Long agreed with the President’s statement. It was for this reason the President was anxious that work on the markup of the Bill begin promptly and he appreciated Long’s agreement to do so.⁶

Bill Timmons is doing a report on material discussed other than trade.⁷

Peter M. Flanigan

⁸

1. Source: National Archives, Nixon Presidential Materials, White House Special Files, Staff Member & Office Files, President’s Office Files, Box 94, President’s Meeting File, Memoranda for the President’s File, Beginning May 19 (1974). No classification marking.
2. The meeting took place in the first floor Family Dining Room from 8:30 until 9:39 a.m. In addition to President Nixon, Senator Wallace F. Bennett (R–Utah), Senator Long, and Flanigan, Timmons, and Scowcroft attended the meeting. (Ibid., White House Central Files, President’s Daily Diary)
3. On May 24, the Department of Commerce announced that an increase in exports had moved the U.S. balance of trade back into a surplus position in April. (The New York Times, May 25, 1974, p. 35)
4. From May 3 to 31, Kissinger was shuttling back and forth between Damascus and Jerusalem negotiating the Israeli-Syrian disengagement agreement.
5. May 28.
6. In a May 23 message to Kissinger, Tohak 298, Scowcroft reported that the President’s meeting with Long and Bennett “went very well. They agreed to begin mark-up of the trade bill immediately following Memorial Day recess, if you would start working with Jackson to attempt to resolve Title IV immediately following your return. There was no discussion regarding the characteristics of a compromise on Jackson–Vanik. Long indicated his feeling that there has been some erosion of support for Jackson–Vanik.” (Ford Library, National Security Adviser, Memoranda of Conversation, Box 4)
7. Attached but not printed is a May 23 memorandum prepared by Timmons covering the portion of the meeting that did not concern the trade bill.
8. Printed from a copy that bears Flanigan’s typed signature.