111. Memorandum of Conversation1
SUBJECTS
- Williamsburg Summit; UNCTAD VI; High Level Visitors
PARTICIPANTS
State Department
- E—Under Secretary Wallis
- E—Martin Bailey
- EUR/EEY/YO—Joseph R. McGhee (notetaker)
Yugoslav Embassy
- Ambassador Loncar
- Mr. Galovic
- Mr. Panev (notetaker)
Ambassador Loncar requested the meeting, his first visit to Mr. Wallis’ office, primarily as a courtesy call. He asked for Wallis’ views on the prospects for the upcoming Williamsburg Summit, and for information on how the U.S. would approach the UNCTAD VI Conference.
Williamsburg Summit: Wallis stated that the leaders of the Western industrialized nations meeting at Williamsburg would above all project optimism over the continuing economic recovery in the West. They would point to positive signs not only in the American economy, but in those of Canada, West Germany, and Great Britain as well. The leaders would also look at the international debt question and the strain it was placing on the entire international financial system. They would emphasize the need for realism in approaching this problem and, Wallis thought, would call for more rational and responsible domestic and foreign economic policies on the part of the LDC’s. This would be a key factor in resolving the LDC’s massive debt problem. In response to a question from Loncar, Wallis stated that East-West trade was unlikely to receive much attention at Williamsburg. The main lines of policy were already drawn, and the details could be dealt with more effectively at a lower level. Wallis thought the Summit would almost certainly take note of the upcoming UNCTAD VI meeting in Belgrade.
UNCTAD VI: Wallis stated that he intended to visit UNCTAD VI for at least a part of the proceedings and that U.S. Trade Representative William Brock also would be there. He thought other high level USG participation might also be possible. He expressed the hope that the meeting would not break down into strident posturing and demands. [Page 291] It was most important at the moment that developing economies get moving again, and this would require a responsible approach. The U.S. used about one half of the Third World’s manufactured products and was keenly aware of the need for continued development. However, development required above all sound domestic economic policy. The U.S. was willing to provide assistance and technical advice to support sound policies in individual countries. We would also back international measures, including steps to make multilateral development banks effective and more responsive to the needs of the LDC’s. This was the message the U.S. would take to UNCTAD. We hoped it would lead to constructive discussion.
Loncar noted that as host Yugoslavia hoped to create a constructive atmosphere that would bring a moderate, realistic and productive approach to the conference by all participants. The GOY hoped the emphasis would be on debt and other current problems, such as ways in which the locomotive economies could help pull the world out of the recession. However, they also wanted to discuss approaches to long-term structural changes, including commodity arrangements and Global Negotiations.
Wallis expressed the view that Global Negotiations were a dead issue. The U.S. had put forward some constructive proposals on Global Negotiations, and they were all but ignored. There was little chance that we would take the matter up again. He did not see much point, from the U.S. point of view, in dealing with the G–77 as a group. The South nations seemed to have little in common beyond a desire to get funds from the North. It made more sense for the U.S. to deal with G–77 nations individually. The type of structural changes Loncar referred to, including translocation of function, were best brought about by market forces.
High Level Visits: In the course of the meeting Wallis mentioned to Loncar that it was his understanding that Vice President Bush would visit Belgrade in September.2
- Source: Department of State, Bureau of Economic and Business Affairs, Investment Policy Files, 1981–1984, Lot 85D193: UNCTAD VI—General. Confidential. Drafted by Joseph McGhee (EUR/EEY/YO) on May 10; cleared in EUR/EEY, EUR, and E. The meeting took place at the Department of State. The date “May 16, 1983” is stamped on the memorandum to indicate when it was received in the Secretary’s office.↩
- Bush and his wife visited Belgrade September 16–18. In telegram 7776 from Belgrade, September 21, the Embassy reported on the visit. (Department of State, Central Foreign Policy File, Electronic Telegrams, D830546–0875)↩