International Economic Policy

Peace has an economic dimension. In a world of independent states and interdependent economies, failure to collaborate is costly-in political as well as economic terms.

U.S. Foreign Policy for the l970s,
Report to the Congress,
February l8, 1970

Material well-being is not the only goal of men and nations. But it is one of the bases of a decent life. The tragedy of our time is that there is not enough of it. For many members of the human race it is a matter of survival; for most nations, economic advancement and prosperity are the means of liberating men and societies from the weight of deprivation and allowing them to realize their full dignity and destiny.

Economic advancement will never approach its full potential if pursued solely within national boundaries. The interdependence of national economies in the 1970s gives all people a major stake in the effective functioning of the world economy. Economic relations have thus become centrally important in international affairs. An American policy which retreated from cooperation, or which moved toward increasing the barriers to fair and equitable economic intercourse among nations, would threaten the foundations of the partnerships which are our central foreign policy objective.

The United States remains the largest single national factor in the world economy. We thus have a strong interest in minimizing the impediments to international economic transactions for domestic economic reasons as well as for the foreign policy reasons which are highlighted in this report.

The year 1970 saw significant developments in each of the three major areas of international economic policy-monetary policy, foreign assistance and trade:

It was one of the most tranquil years for the international monetary system in a decade.

We unveiled a whole new blueprint for our foreign assistance programs.

But it also became clear that we and the rest of the trading world face the most serious challenge to our trade relations in the postwar period.

In a world of more than one hundred nations, and in a field embracing so many activities and so intimately connected to both our domestic well-being and our overall foreign policy, foreign economic policymaking is extraordinarily complex. Last month, therefore, I established a Council on International Economic Policy which I will chair personally, with the Secretary of State as vice-chairman, and which will have a new Assistant to the President for International Economic Affairs, Mr. Peter Peterson, as its Executive Director. This council will provide a clear single focus for the full range of international economic issues at the highest level. It will ensure timely consideration of issues, help achieve consistency between international and domestic economic policy and maintain close coordination with our basic foreign policy objectives. We have upgraded and streamlined our governmental machinery to reflect the great importance we attach to foreign economic policy in the l970s.