Foreign Relations of the United States, 1981–1988, Volume XXXVIII, International Economic Development; International Debt; Foreign Assistance

118. Briefing Memorandum From the Under Secretary of State for Economic Affairs (Wallis) to Secretary of State Shultz¹

Washington, undated

SUBJECT

• Foreign Ministers Meeting June 8, 9:45 a.m.–12:30 p.m., Economic Aspects

Geoffrey Howe has said that he wants the Foreign Ministers, during their meeting on Friday morning,² to go over some of the economic issues which will be discussed at the Summit. The principal issues on which you should concentrate are trade, energy, North/South dialogue, and East-West economic relations. (I expect the Finance Ministers will discuss, during their separate meeting that morning, financial issues, monetary reform, debt and the economic recovery and outlook.) Other issues which could come up during your meeting include environment, technology and cooperation on the space station.

Following are brief statements of the issues. I have attached the talking points on each from the President’s book.³

[Omitted here is information on trade and energy.]

North/South Dialogue

We expect the Italians, French and probably Japanese to argue strongly for a favorable reference to the need for a “dialogue” on essentially political grounds.⁴ We oppose such a reference for both economic and political reasons: On economic, because the dialogue would have no substantive content apart from what we are trying to do in the GATT, IMF and IBRD (Development Committee), and it remains essential that we preserve the integrity of those institutions from “second guessing” by another forum; on political, because a suggestion that we are prepared to set up an alternative process (or convene another North/South summit) will relieve the pressure which has been building on both reluctant DCs and LDCs to face the real issues (e.g., adjustment, trade liberalization, market-oriented development strategies) in the fora which exist, as well as to cast public doubt on the value of the substantive strategies which the rest of the Economic Declaration will have articulated. As a fallback, we could, if necessary, accept some reference to North/South relations in general along the following lines: Noting we have received several communications on issues of trade, debt and finance from a number of LDCs, and recognizing that the issues we have discussed are of critical importance to them, we urge all to join with us in a search for solutions to our common problems in a spirit of mutual respect and cooperation.⁵

[Omitted here is information on East-West economic relations.]

1. Source: Department of State, Bureau of Economic Affairs, Office of Economical and Agricultural Affairs Files, Official Economic Summit Files, 1975–1991, Lot 93D490: London Summit—Briefing Papers 1984. Secret. Robert Morris initialed for Wallis.
2. June 8.
3. The talking points are attached but not printed.
4. In a June 7 memorandum to McFarlane on the subject of a June 7 luncheon with Reagan to prepare him for the London Summit, McMinn wrote that they should warn Reagan that “Mitterrand, Craxi and others may press for a favorable reference to the North/South dialogue—‘global negotiations’ and/or the Gandhi proposal.” McMinn wrote that the United States should resist this objective. (Reagan Library, Douglas McMinn Files, Economic Summit Files, London—Summit meetings & Correspondence)
5. Telegram 175066 to all diplomatic posts, June 14, assessed the “economic aspects” of the London Economic Summit, and reported that the Summit Economic Declaration reflected the U.S. position that “North/South issues cannot be addressed in isolation or separately from” proposals designed to address debt, trade, and finance problems facing the world economy. The Declaration deflected “pressure for a revived North/South ‘dialogue’ outside the framework of the institutions created to deal with these issues in an operational way (GATT, IMF, IBRD).” Finally, the Declaration invited “the LDC’s to join us in the search for practical solutions, stressing that our approach will be characterized by ‘a spirit of goodwill and cooperation.’” (Department of State, Bureau of Economic Affairs, Office of Economical and Agricultural Affairs Files, Official Economic Summit Files, 1975–1991, Lot 93D490: London Economic Summit—1984)