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The politics of policy reversal: the US response to granting trade preferences to developing countries and linkages between international organizations and national policy making

Published online by Cambridge University Press:  22 May 2009

Ronald I. Meltzer
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Abstract

Analysis of the United States’ shift to support of trade preferences for developing countries in 1967 provides evidence for the value of a “bureaucratic politics” model that pays attention to the importance of transgovernmental relations in influencing national policy making. Between 1964 and 1967, international organizations affected, United States policy making on trade preferences, and officials within the US government who favored preferences used such organizations-particularly the OECD-to help change American policy. Intergovernmental, transgovernmental, and national levels of policy making were closely linked to one another. This case study suggests the need for a broadened conception of “bureaucratic politics”; but it also supports the view that the “bureaucratic politics” and “rational actor” approaches are fundamentally complementary rather than antithetical.

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Articles
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International Organization , Volume 30 , Issue 4 , Autumn 1976 , pp. 649 - 668
Copyright
Copyright © The IO Foundation 1976

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References

1 See Bergsten, C. Fred, “The Response to the Third World,” Foreign Policy, Vol. 17 (Winter 1974–1975Google Scholar) and Erb, Guy, “Export Controls,” Foreign Policy, Vol. 17 (Winter 1974–1975Google Scholar) for comments regarding trade preferences in the current multilateral trade negotiations.

2 See Nye, Joseph S. Jr, “UNCTAD: Poor Nations’ Pressure Group,” in Cox, Robert W. and Jacobson, Harold K., eds., The Anatomy of Influence: Decision-Making in International Organization (New Haven: Yale University Press, 1973), p. 363Google Scholar, for a ranking of negative influence at UNCTAD.

3 For a reprinting of the speech, see Department of State Bulletin, Vol. 56, (May 8, 1967): 707 ff.

4 For discussion of events leading to the measure's subsequent adoption, see Walker-Leigh, Vanya, “The Generalized System of Preferences: Background to the Recent UNCTAD Agreement,” The World Today, Vol. 27 (01 1971Google Scholar) and Bhattacharya, Anindya K., “The Influence of the International Secretariat: UNCTAD and Generalized Tariff Preferences, International Organization, Vol. 30 (Winter 1976)CrossRefGoogle Scholar.

5 See Kaiser, Karl, “Transnational Politics: Toward a Theory of Multinational Politics,” International Organization, Vol. 25 (Autumn 1971): 798CrossRefGoogle Scholar, for further discussion regarding “multibureaucratic” decision making. This term refers to interaction among different bureaucratic actors across national governmental boundaries.

6 See Keohane, Robert O. and Joseph S. Nye, Jr., “Transgovernmental Relations and International Organizations,” World Politics, Vol. 27 (10 1974CrossRefGoogle Scholar) for additional discussion on “transgovernmental relations.”

7 For a basic formulation of the model see, Allison, Graham T., The Essence of Decision: Explaining the Cuban Missile Crisis (Boston: Little, Brown and Company, 1971), p. 162 ffGoogle Scholar.

8 There have been other grounds on which the model has been criticized, relating largely to its underestimation of the President's potential role in the bargaining process and to the lack of clarity concerning this model's relationship to another formulation-the Organizational Process Model. For examples of criticisms, see Krasner, Stephen D., “Are Bureaucracies Important?” Foreign Policy, Vol. 7 (Summer 1972)Google Scholar; Art, Robert J., “Bureaucratic Politics and American Foreign Policy: A Critique,” Policy Sciences, 4 (1973)CrossRefGoogle Scholar; Perlmutter, Amos, “The Presidential Political Center and Foreign Policy: A Critique of the Revisionist and Bureaucratic-Political Orientations,” World Politics, Vol. 27 (10 1971)Google Scholar; and Wagner, R. Harrison, “Dissolving the State: Three Recent Perspectives on International Relations,” International Organization, Vol. 28 (Summer 1974)CrossRefGoogle Scholar.

9 See Campbell, John Franklin, The Foreign Affairs Fudge Factory (New York: Basic Books, Inc., 1971), p. 36Google Scholar, for reference to the “Washington-centered universe” that is implied by this approach.

10 Neustadt, Richard E., Alliance Politics (New York: Columbia University Press, 1970), p. 140Google Scholar. The emphasis is Neustadt's. See also Allison, p. 178, for a similar discussion of “inter-and intra-national relations.”

11 See Rosenau, James N., ed., Linkage Politics (New York: The Free Press, 1968)Google Scholar, for a collection of essays attempting to deal with such relationships. Allison does touch on this problem in his “Afterword,” noting that the “current statement of the model concentrates on” the governmental machinery, but external groups could be included by broadening the model.” A See Allison, p. 275.

12 In dealing with the impact of international organizations on national policy making, much of the analytical treatment has focused on international institutions affecting governments in developing countries. See, for example, Gordenker, Leon, “Multilateral Aid and Influence on Government Policies,” in Cox, Robert W., ed., The Politics of International Organizations (New York: Frederick A. Praeger, 1970)Google Scholar.

13 See Cox, Robert W. and Harold K. Jacobson, “Framework for Inquiry,” in Cox and Jacobson, pp. 16–17Google Scholar.

14 See Cox, Robert W. and Harold K. Jacobson, “The Anatomy of Influence,” in Cox and Jacobson, p. 428Google Scholar.

15 See Nye, p. 368, for discussion concerning UNCTAD's role in “setting forth and dramatizing a problem.”

16 For discussion of international organization tasks relating to “animating mutual concerns to realize mutual gain,” see Sewell, James P.. “Policy Processes and International Organization Tasks,” in Cox, , ed., The Politics of International Organization, pp. 99–104Google Scholar.

17 This definition is from Keohane and Nye, p. 43.

18 For a basic formulation of the “rational actor” model, which posits foreign policy actions as value-maximizing choices pursued by national governments in response to strategic problems, see Allison, pp. 32ff.

19 A major element of the feedback to Washington from US representatives at these intergovernmental forums concerned the strong attachment that developing countries had to trade preferences as a way to restructure international trade relations to meet economic development needs. Personal Interview, State Department Official.

20 See March 3, 1964 Memorandum from Ball, George W., Under-Secretary of State, to McGeorge Bundy, Special Assistant to the President, p. 1Google Scholar.

21 Personal Interview, State Department Official. It was well known that Under-Secretary Ball attributed far greater importance to US relations within the industrialized West, than with less developed countries. This perspective reinforced the perceived need to protect the Kennedy Round from possible interferences by efforts to gain preferential concessions for developing countries.

22 Personal Interview, Commerce Department Official.

23 See testimony of Under-Secretary Ball, , Hearings, US Congress, Subcommittee on Foreign Economic Policy, Joint Economic Committee, July 20, 1967 (Washington: Government Printing Office, 1967), p. 289Google Scholar, and Hearings, US Congress, Subcommittee on American Republic Affairs, Senate Committee on Foreign Relations, March 1, 1968 (Washington: Government Printing Office, 1968), p. 133Google Scholar.

24 Personal Interview, State Department Official. For discussion of an organization's “essence,” see Halperin, Morton, Bureaucratic Politics and Foreign Policy (Washington: The Brookings Institution, 1974), p. 28Google Scholar.

25 Untitled February 15, 1964 Memorandum from Ralph A. Dungan, Special Assistant to the President, to George W. Ball, Under-Secretary of State, unnumbered page. Prior to UNCTAD I, there were some consultative meetings arranged by the executive branch with Congress and domestic groups, and it was widely accepted that there would be little thought given to US support of measures such as trade preferences at the upcoming conference. Personal Interview, State Department Official.

26 See Department of State Bulletin, Vol. 53 (04 20, 1964), p. 637Google Scholar, for a reprinting of Under-Secretary Ball's address to UNCTAD I, a speech which captured the tone of American participation at the conference.

27 Personal Interview, Commerce Department Official.

28 See UNCTAD Document TD/B/C.2/1, TD/B/AC.1/4 Report of the Special Committee on Preferences, for a summary of the proceedings at this committee. See also Report of the United States Delegation to the Special Committee of Preferences on the United Nations Conference on Trade and Development, Sidney Weintraub, US Representative, submitted to the Secretary of State, prepared by Harald B. Malmgren. Undated US Department of State memorandum.

29 This process was evident at the 1964–65 GATT deliberations regarding the addition of Part IV to the General Agreement and at the 1964 meeting of IA-ECOSOC held in Lima, Peru.

30 In this regard, the UNCTAD Secretariat played an important role advocating trade preferences. Raul Prebisch, for example, appeared before an OAS forum and explicitly campaigned for the measure. See The New York Times, July 7, 1964, pp. 45, 51. For further discussion of Prebisch's efforts to mobilize support for a generalized approach to trade preferences among Latin American governments, see Bhattacharya, pp. 80–84.

31 These terms–“symbolic,” “programmatic,” and “operational” decisions–are from Cox, and Jacobson, , “A Framework for Inquiry,” pp. 8–11Google Scholar, and Cox, and Jacobson, , “Anatomy of Influence,” pp. 377–93Google Scholar.

32 See Halperin, pp. 11–16.

33 Personal Interview, Commerce Department Official. Solomon was actually confirmed by the Senate on May 17, 1965. In late 1965, Harry G. Johnson challenged some basic premises of the prevailing GATT-theology at a widely-attended Brookings Institution conference. Indeed, he explicitly supported granting trade preferences to developing countries. His views added intellectual support for the case favoring this measure, as Johnson had been a leading exponent of liberal economic trade theories upon which GATT-theology was predicated. See his Economic Policies Toward Less Developed Countries (Washington: The Brookings Institution, 1967)Google Scholar.

34 Trade Preferences for Developing Countries, An Examination of US Policy, May 27, 1965 Memorandum, General Commercial Policy Division, Office of Trade, Economic Affairs Bureau, US Department of State, p. 1.

35 Ibid. p. 2. Reference is made here to the EEC's selective preferential arrangements in the Mediterranean region stemming from the Yaoundé Convention of 1963 and to the May 1965 announcement by the Australian government that it would grant a unilateral system of preferences to developing countries. These were important concerns, as will be seen, in generating increased disposition within the US government to consider granting generalized trade preferences.

36 An indication of Latin American concern was seen in an August 1965 CIAP letter circulated to member governments advocating “transitory, defensive measures” to be taken by the US to compensate for perceived European discrimination against Latin American goods. For a reprinting of this letter, see Hearings, US Congress, Subcommittee on Inter-American Relations, Joint Economic Committee, 09 10, 1965 (Washington: Government Printing Office, 1965), pp. 220–28Google Scholar. See also Bhattacharya, pp. 85–87. The importance of these motivating factors for explaining the US policy reversal, particularly in relation to “rational actor” model, will be discussed further in the concluding section of this study.

37 See Halperin, p. 116.

38 Personal Interview, State Department Official.

39 There was a great deal of hostility within the US government to this Australian announcement, as many trade officials felt that such a policy reflected yet another “grandstanding” effort by a Western government on the matter. It was felt that given the restricted nature of the proposed preferences scheme, there would be little benefit for developing countries in trade terms. However, such a move was seen as an important blow to the principle of non-discrimination in international trade.

40 Personal Interview, State Department Official.

41 Personal Interview, State Department Official.

42 When the proposal for creating this Group was brought before other OECD members, there was some indication given that the “US could be prepared to consider preferences, but only if everyone would agree on common arrangements.” Representatives from other governments welcomed this prospect of coordinating Western policy on the issue. Personal Interview, State Department Official. For reference to some haggling over the composition of the Group, see Gosovic, Branislav, UNCTAD: Conflict and Compromise (Leiden: A.W. Sijthoff, 1972), p. 295Google Scholar.

43 Personal Interview, State Department Official.

44 See Halperin, p. 161, for further discussion of this type of “political bureaucratic” leverage.

45 Personal Interview, Commerce Department Official.

46 The “working hypotheses” established quite early in the Group's deliberations clearly indicated an assumption that granting preferences would be an eventual recommendation, with the Group's primary focus being oriented to developing agreed-upon terms for implementation. See OECD Document TD/LDC/26, 20 April 1966, p. 1–15.

47 Personal Interview, Commerce Department Official. This temporizing effort could be seen in the dual set of proposals in the Group's Interim Report. See Interim Report by the Special Group on Trade With Developing Countries, OECD Document TC(66) 25, 11 08 1966Google Scholar.

48 Personal Interview, Commerce Department Official.

49 Personal Interview, State Department Official.

50 Personal Interview, State Department Official.

51 See Halperin, p. 190.

52 Personal Interview, State Department Official.

53 Ibid.

54 Ibid. Among senior officials within the US government, many policy problems associated with trade preferences were recognized as pressing concerns, despite their generally negative views on granting the measure itself. These problems–fragmented Western responses to demands by less developed countries for trade concessions; erosion of global non-discrimination as a standard in international trade; threatening trends towards economic regionalism deriving from the EEC's selective and reverse preferential arrangements; and growing Latin American pressure for US remedial action regarding their exports–were, as noted, basic factors behind the decision of Assistant Secretary Solomon to seek a change in US policy on trade preferences. The fact that proceedings and progress made within the OECD “wisemen” group could address and provide a possible “solution” to these problems via a coordinated GSP approach created considerable leverage for Solomon in seeking such a policy reversal. The use of transgovernmental relations within the OECD, then, provided the basis for much more effective pursuit of such bargaining efforts, holding out the prospect of a rather efficient means to deal with various interlocked goals in foreign economic policy.

55 The Johnson administration's relations with Congress concerning the Punta del Este meeting were not without problems, however, as the White House became embroiled in a dispute regarding a Congressional resolution supporting the Alliance for Progress. See The New York Times, April 7, 1967, p. 7; April 9,1967, p. 1; and April 14,1967, p. 67.

56 Personal Interview, State Department Official.

57 Department of State Bulletin, Vol. 56 (05 8, 1967), p. 707Google Scholar.

58 See Keohane and Nye, p. 61.

59 See Puchala, Donald J. and Fagen, Stuart I., “International Politics in the 1970's: The Search for a Perspective,” International Organization, Vol. 28 (Spring 1974): 252Google Scholar, for comments regarding increased channeling of policy matters through international organization machinery.

60 Art, pp. 474, 488 (footnote 29).

61 Ibid., p. 486. Changing global environmental conditions, broadly-shared societal goals, actions of other governments, etc., would be important considerations in this regard.

62 See Bhattacharya, pp. 84–85, for an example of focusing on such factors to explain the US policy reversal.

63 Art, p. 474.