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June 29, 1976 - Cabinet Meeting
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1553487
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document
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June 29, 1976 - Cabinet Meeting
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collections
Memoranda of Conversations (Nixon and Ford Administrations)
Ford Administration Memoranda of Conversations
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Puerto Rico
Cabinet meetings
Economics
International economy
Summit meetings
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1553487
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1976-06-29
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6
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1976
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29
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1976-06-29
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6
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1976
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File scanned from the National Security Adviser's Memoranda of Conversation Collection at the Gerald R. Ford Presidential Library
MEMORANDUM
THE WHITE HOUSE
WASHINGTON
MEMORANDUM OF CONVERSATION
PARTICIPANTS:
President Ford
The Cabinet
Brent Scowcroft, Assistant to the President
for National Security Affairs
DATE AND TIME:
Tuesday, June 29, 1976
PLACE:
The Cabinet Room
SUBJECT:
Puerto Rico Economic Summit
President: I want to express my appreciation for the fine staff work
that was done in preparation for the Puerto Rico meeting. The two
meetings we've had at Rambouillet and at Puerto Rico -- clearly
indicate to me there is an interdependence among the industrial
powers in the economic, political and security areas. Here we were
meeting to avert a crisis, not to cope with one. At Rambouillet, we
had been in the midst of a recession. I think this is the was for the
heads of government to meet.
We covered the major areas: economic recovery and expansion
[some description]; and the monetary and financial areas. We agreed
each country should try to avoid imbalances and help with any
temporary imbalance in conjunction with a firm program to correct
the situation. On North-South relations we agreed we had to have a
cooperative -- not a competitive -- approach. On trade and invest-
ment, we agreed to try to complete the Multilateral Trade Negotiations
by the end of 1977. In the area of East-West trade, we need to monitor
it to insure that trade enhances Western objectives. There has been a
massive increase.
In conclusion, I am convinced this nation has the leadership
among the industrial democracies. We clearly are in a position of
leadership -- across the board. Henry, do you want to add anything?
- 2 -
Kissinger: The most important part is that the solidarity of the
Western democracies is the best guarantee of peace. The industrial
democracies have 60% of the world GNP. The press has commented
on the meeting being political. But for whatever reason it was done,
for six heads of state to set aside two-tc-three days at the call of
the President -- that in itself is a testimony to the President's
leadership.
Second, the level of the discussion was most impressive. There
was a level of discussion one usually doesn't find -- there were no
canned speeches. On East-West trade there was a great discussion
between the economic and political motivations of the trade -- a dis-
cussion which would have been unthinkable a year ago. We should
not expect great pronouncements from these meetings. If there were
every six months, it could be a sign something was wrong. On East-
West trade, we just wanted to raise the issue, but we got all the
countries to agree that this trade had to be looked at in more than
commercial terms - - rather in terms of overall relationships and in
a coordinated way among us.
The same with North-South relations. Virtually all North-South
aid comes from these states or their close association. So the
developed democracies need not be defensive at international confer-
ences -- or act competitively with each other. We made a great
contribution in this direction on this subject.
Not since the early 50's has there been such a spirit of cooper-
ation among the allies. All this talk about the Soviet bloc being on the
offensive and the democracies on the decline just isn't true. These
leaders are dynamic and the West under this sort of coordinated action
can handle all the problems before us easily.
President: Bill?
Simon: The key aspect was the informality of the meeting and the
frankness and honesty of the dialogue. The President was impressive
and clearly gave the others confidence in him as a leader of the
western world.
[Discussed the super tranche idea. ]
- 3 -
I found the East-West trade discussion the most stimulating
and I think this is one of the most challenging areas before us.
We have had an explosion of credit to the East. On commodities,
Schmidt gave a pitch which sounded like Treasury arguing with
State. All in all, I can only agree that the depth which these subjects
were discussed was most impressive.
Greenspan: It was an extraordinary meeting, especially in the context
of other meetings I have attended. There was a real intellectual
grappling with major philosophical issues.
[Rambling discussion]
We may have developed a new form of international institution.
We have broken down the formality and protocol of summit meetings
so that true dialogue can take place.
President: One of the big changes between this and Rambouillet was
the discussion about competition to extend credit to the Soviet Union.
There was no discussion of the magnitude of the credit. At Puerto
Rico, Henry pointed out that this credit gave us leverage which could
skillfully be utilized and there was general agreement with that concept.
[Discussion about Eastern debt, possibility of default, etc. ] We dis-
cussed the situation of Poland, which announced a price increase and
then had to rescind it.
Kissinger: This was a remarkable phenomenon. To imagine that
these monolithic dictatorships are so weak they can't impose this
kind of decision -- which makes economic sense and has profound
political implications.
Further, the idea that the Soviet Union might have to reschedule
its debts is also of profound political significance. The idea that the
Soviet Union, which claims to have the most advanced economic system
in the world, would have to show this kind of economic bankruptcy, is
really of great political significance.
Richardson: [Suggested an NSC study of the political and economic
relationship of East-West trade.]
Coteman To Quim am
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