CABINET COUNCIL ON ECONOMIC AFFAIRS MEETING 6 AUGUST 1981

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 05038183
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 4
• Document Creation Date: December 28, 2022
• Document Release Date: September 25, 2017
• Case Number: F-2013-01107
• Publication Date: August 6, 1981

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' 4
6 August 1981
MEMORANDUM FOR THE RECORD
SUBJECT: Cabinet Council On Economic Affairs meeting 6 August
1981
1. On Thursday, August 6th at 8:45 I attended a meeting of
the Cabinet Council on Economic Affairs . The agenda concerned:
(1) The situation in Poland;
(2) The Cancun Summit; and
(3) International Investment Policy.
A list of attendees and the papers prepared for the meeting are
attached.
Poland
2.. The purpose of the discussion on Poland was to keep the
economic departments abreast of the situation and to make them
aware of the possibility that substantial additional U.S. aid
might be proposed. Marc Leland and Bob Hormats reported on their
discussions with our Allies, particularly at Cancun I. Some
Allied Ministers, including Gensher, believe that if the Polish
experiment i5 seen to fail for economic reasons, Moscow will have
achieved its objective of destroying the popular movement in
Poland without having had to take any adverse action. The
Europeans are becoming increasingly concerned about the
situation. Several of them have.waived downpayment requirements
on credits and the French have announced a new near grant of
400,000 tons of grain
3.: concern was expressed around the table, especially by
OMB Director Stockman, about the size of the potential bill .the
.US may eventually have to pay, the risks of losing everything if
the Soviets .invade or the Polish reform movement otherwise
collapses, the large U.S. share to date of the Polish aid bill,
and the difficulty of explaining all this to the voters. The
Vice President wondered whether some sort of commitment could be
obtained from the Russians in return for the West, bailing out the
Polish economy. Discussion of such matters was referred to
smaller "political level" meetings. In the meantime, Hormats and
Leland will be discussing Poland with our Allies in Europe.
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ILI Li...1 �
Cancun
A. Concerning Cancun, Mike Rashi..sh reported that the U.S.
had accomplished its objectives in the preliminary meetings as to
procedures to be followed: specifically, no communique and no
specific adgenda. He and others were concerned, however, that
the President would be isolated at Cancun because of the powerful
political incentives of most of the other Western leaders to make
sweeping statements on the North/South dialogue in the
expectation that the U.S will veto any proposal that could cost
much money.
. 5. The current policy question is how to develop some
proposals on North/South issues to follow up the on Cancun Summit
for the President to present at an appropriate time, but without
being drawn into "global negotiations" in the U. N.
Investment
6. A report from the Committee on Foreign Investment in the
-U.S. (CFIUS) concerning Elf Aquitaine's take-over of 'Texas Gulf
and. related matters were discussed. The issues are: (1) how to
deal with take-overs of U.S. firms by foreign government-owned
companies; and (2) how to use controls over foreign investment
in. the U.S. as leverage to. Case foreign controls over U.S.
.investments abroad. Thc problems are:
-- The U.S. government has no existing instruments for
controlling foreign investments .
-- Congress will want to legislate some controls which
could turn out to be overly broad and restrictive.
7. CFIUS will try to develop a policy that provides some
controls and negotiating instruments and at the same time could
take the steam out of any proposals for excessive restrictions.
Maurice C. Ernst
Director
Economic Research
Distribution.:
Orig - OD/OER
1 - DCI
.1 7 DDCI.�
1 - Ch/OPP
� 1 - EP
a - D/NFAC
1 7 Ch/NIC
. 1 - A/NIO/USSR
OD/OER/MCErnst/
(6 Aug '81)
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THE WHITE HOUSE
WASH I NGTON
CABINET COUNCIL ON ECONOMIC AFFAIRS
August 6, 1981
8:45 AM
Roosevelt Room
AGENDA
1. Economic and Financial Situation in Poland (CM#114)
2. Cancun Summit (CM#115)
3. International Investment'Pblicy (CM116)
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CABINET COUNCIL ON ECONOMIC AFFAIRS
PARTICIPANTS
August 6, 1981
The Vice President, Ex Officio Member
Secretary Regan, Chairman Pro Tempore
Secretary Baldrige
Secretary Donovan
Secretary Lewis
Director Stockman
Chairman Weidenbaum
Roger Porter,. Executive Secretary
Deputy U.S. Trade Representative Macdonald
(Representing Ambassador Brock)
For Presentation:
Robert formats, Assistant Secretary
for Economic and Business Affairs
Department of State
Marc Leland, Assistant Secretary
for International Affairs
Department of the Treasury
Martin Anderson
Richard Darman �
Craig Fuller
Frank Hodsoll
(Representing James A. Baker III)
Thadd Garrett
Kevin Hopkins
Larry Kudlow
Norman Bailey
Henry Nau
Robert Dederick
� David Dehoon
(Representing Secretary Weinberger)
Maurice Ernst
(Representing Director Casey)
Cx-ctt- ?,)
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