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Download Full Book Trade and Aid Kaufman, Burton I. Published by Johns Hopkins University Press Kaufman, Burton I. Trade and Aid: Eisenhower's Foreign Economic Policy, 1953-1961. Johns Hopkins University Press, 1982. Project MUSE. doi:10.1353/book.71585. https://muse.jhu.edu/. For additional information about this book https://muse.jhu.edu/book/71585 [ Access provided at 24 Sep 2021 09:44 GMT with no institutional affiliation ] This work is licensed under a Creative Commons Attribution 4.0 International License. Kaufman HOPKINS OPEN PUBLISHING ENCORE EDITIONS Trade and Aid Trade Burton I. Kaufman ISBN : ---- ISBN : --- Open access edition supported by the National Endowment for the Humanities / Trade and Aid Andrew W. Mellon Foundation Humanities Open Book Program. 9 781421 435725 Cover design: Jennifer Corr Paulson Eisenhower’s Foreign Economic Policy, 1953–1961 Cover illustration: Strawberry Blossom Open access edition supported by the National Endowment for the Humanities / Andrew W. Mellon Foundation Humanities Open Book Program. © 2019 Johns Hopkins University Press Published 2019 Johns Hopkins University Press 2715 North Charles Street Baltimore, Maryland 21218-4363 www.press.jhu.edu The text of this book is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License: https://creativecommons.org/licenses/by-nc-nd/4.0/. CC BY-NC-ND ISBN-13: 978-1-4214-3574-9 (open access) ISBN-10: 1-4214-3574-8 (open access) ISBN-13: 978-1-4214-3572-5 (pbk. : alk. paper) ISBN-10: 1-4214-3572-1 (pbk. : alk. paper) ISBN-13: 978-1-4214-3573-2 (electronic) ISBN-10: 1-4214-3573-X (electronic) This page supersedes the copyright page included in the original publication of this work. TRADE AND AID THE JOHNS HOPKINS UNIVERSITY STUDIES IN HISTORICAL AND POLITICAL SCIENCE One Hundredth Series ( 1982) I. Trade and Aid: Eisenhower's Foreign Economic Policy, 1953-1961 By Burton I. Kaufman BURTON I. KAUFMAN is professor of history at Kansas State University. He is the author of E;Jficiency and Expansion: Foreign Trade Organization in the Wilson Administration and The Oil Cartel Crisis: A Documentary Study of Antitrust Activity in the Cold War Era. TRADE AND AID Eisenhower's Foreign Economic Policy 1953-1961 Burton I. Kaufman THE JOHNS HOPKINS UNIVERSITY PRESS Baltimore and London Copyright© 1982 by The Johns Hopkins University Press All rights reserved Printed in the United States of America The Johns Hopkins University Press, Baltimore, Maryland 21218 The Johns Hopkins Press Ltd., London Library of Congress Cataloging in Publication Data Kaufman, Burton Ira. Trade and aid. Bibliography: pp. 253-67. Includes index. I. United States-Foreign economic relations. 2. Eisenhower, Dwight D. (Dwight David), 1890-1969. I. Title. HFl 455.K282 337.73 81-15594 ISBN 0-8018-2623-3 AACR2 For Diane, Heather, and Scott Contents Acknowledgments xi List of Abbreviations xiii 1. Introduction I 2. Trade Not Aid, 1953-1954 12 3. The Transition, 1954-1955 34 4. The Soviet Economic Challenge, 1955-1956 58 5. Trade, Antitrust, and Oil Policy, 1955-1957 74 6. The Foreign-Aid Inquiry and Establishment of the Development Loan Fund, 1957 95 7. Trade and Aid: Reciprocal Trade, 1957-1958 113 8. Trade and Aid: Mutual Security, 1957-1958 133 9. Multilateralism and Regionalism, 1958-1959 152 10. The Balance-of-Payments Problem and Foreign Economic Policy, I 95(}-1960 176 11. The Final Fight over Foreign Aid, 1960-1961 197 12. Conclusion 207 Notes 212 Selected Bibliography 253 Index 269 IX Acknowledgments There are a number of people whose help in this project I wish to acknowledge. Most important are the archivists at the Eisenhower Library, particularly David Haight, whose courtesy and help over a number of years are greatly appreciated. In addition, I want to thank my colleagues at Kansas State University, particularly Joe Hawes, Jake Kipp, Al Hamscher, Don Mrozek, and Don Nieman, for reading the manuscript and making invaluable comments both on style and content. Department seminar and coffee-room dialogues on sundry related and unrelated matters were refreshing and inci­ sive. May the tradition continue. I want also to express my deep appreciation to my friends Bob Griffith of the University of Massachusetts and Bob Zieger of Wayne State University for reading the manuscript in its entirety and for forcing me to make a number of substantive changes. Finally, I wish to thank the National Endowment for the Humanities for the grant that made the writ­ ing of this manuscript possible, and the Bureau of Grants and Research at Kansas State University for its financial support over the years. This book is dedicated to my wife, Diane, and to my two children, Heather and Scott, for tolerating my absences-and my presence-during the prepara­ tion of this book. xi List of Abbreviations AAA Agricultural Adjustment Act AFB American Farm Bureau AID Act for International Development BOB Bureau of the Budget CCC Commodity Credit Corporation CEA Council of Economic Advisers CED Committee on Economic Development CFEP Council on Foreign Economic Policy CIA Central Intelligence Agency DLF Development Loan Fund DPA Defense Production Act ECA Economic Cooperation Administration ECOSOC United Nations' Economic and Social Council EEC European Economic Community EFTA European Free Trade Area EPU European Payments Union Eximbank Export-Import Bank FAO Foreign Agricultural Organization FOA Foreign Operations Administration FTC Federal Trade Commission GATT General Agreemer>t on Tariffs and Trade IADB Inter-American Development Bank IBRD International Bank for Reconstruction and Development ICA International Cooperation Administration IDA International Development Association (Authority) IDAB International Development Advisory Board IFC International Finance Corporation IMF International Monetary Fund ITO International Trade Organization MEEC Middle East Emergency Committee NAC National Advisory Council for International Monetary and Financial Affairs Xlll xiv LIST OF ABBREVIATIONS NATO North Atlantic Treaty Organization NFTC National Foreign Trade Council NSC National Security Council ODM Office of Defense Mobilization OECD Organisation for Economic Co-operation and Development OEEC Organization for European Economic Cooperation OTC Organization for Trade Cooperation P.L. 480 Public Law 480 SEATO Southeast Asia Treaty Organization SUNFED Special United Nations Fund for Economic Development TCA Technical Cooperation Administration UNCTAD United Nations Conference on Trade and Development TRADE AND AID 1. Introduction SINCE THE COLLAPSE of the American dollar in 1971 and the oil embargo of 1973-74, international attention has focused increasingly on world economic and monetary problems-on the instability of the interna­ tional financial structure, the world energy crisis, and the plight of the Third World, particularly the impoverished nations of sub-Saharan Africa and parts of South Asia. An apocalyptic literature has appeared predicting dire consequences unless a solution to the world's economic problems is found soon. A special commission headed by former Chancellor Willy Brandt of West Germany warns of mass starvation and international chaos in the ab­ sence of a major redistribution of wealth from the Northern Hemisphere to the Southern. A study prepared for the Carter administration projects the exhaustion of much of the world's natural resources and a bleak standard of living even for the Western industrial powers by the year 2000. 1 The Quest for a New Economic Order In the United States the present pessimism about the international economy is in sharp contrast to American optimism immediately after World War II. Foreign economic policy after the war was addressed primarily to the task of building an economic order that would avoid the mistakes that had contrib­ uted to the onslaught of war. Most policy makers advocated a departure from the passive role the United States had followed after World War I to one of aid in the development of a prosperous world that would assure peace. Such a world would be predicated on the principles of multilateral cooperation, trade liberalization, nondiscrimination, and exchange and monetary stability. 2 Toward these ends, the United States, in concert with its allies and other in­ dustrial nations, built an economic structure that included the International Bank for Reconstruction and Development (the IBRD or World Bank), the International Monetary Fund (IMF), and the General Agreement on Tariffs and Trade (GATT). Yet by the early 1950s much of this initial postwar optimism had been shattered. The goals of peace and prosperity proved elusive as the United States 2 TRADE AND AID concentrated its resources on the reconstruction of Europe and the contain­ ment of communism. The building blocks of the new economic order were found wanting. In the first place, the GATT stood as a weak substitute for a more powerful International Trade Organization (ITO), which the United States had intended as an administrative structure for promoting and regulat­ ing trade on a multilateral basis. The Department of State hailed the ITO (whose charter it had largely written) as the greatest step ever taken in behalf of free trade.3 But because of growing disenchantment over the prospects for peace and prosperity and a reluctance to turn over the administration of the nation's tariff laws to an international body, Congress refused to ratify the ITO charter. Instead, the GATT, which was to have served as an interim trade agreement pending the approval of the ITO,
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