221. Minutes of a Meeting1
1987 ECONOMIC SUMMIT—AFTERNOON PLENARY SESSION
PARTICIPANTS
- President Ronald Reagan
- Secretary George Shultz
- Secretary James Baker
- Prime Minister Amintore Fanfani
- Minister of Foreign Affairs Giulio Andreotti
- Minister of Treasury & Budget Giovanni Goria
- President Francois Mitterrand
- Prime Minister Chirac
- Minister of Finance Edouard Balladur
- Chancellor Helmut Kohl
- Minister of Foreign Affairs Hans-Dietrich Genscher
- Minister of Finance Gerhard Stoltenberg
- Minister of Economy Martin Bangemann
- Prime Minister Yashuhiro Nakasone
- Minister of Foreign Affairs Tadashi Kuranari
- Minister of Finance Kiichi Miyazawa
- Minister of Industry & Foreign Trade Hagime Tamura
- Prime Minister Brian Mulroney
- Secretary of State for External Affairs Joseph Clark
- Minister of Finance Michael Wilson
- President of European Council Jacques Delors
- Economic Communities Representative Martens
- Minister of Foreign Affairs of Belgium Leo Tindemans
- Member of the Commission of the European Communities Willy de Clercq
- Sir Geoffrey Howe, Secretary of State for Foreign & Commonwealth Affairs
- Chancellor of the Exchequer Nigel Lawson
FANFANI calls on Goria to report for Finance Ministers.
GORIA: Recalls Tokyo establishment of G–7 and duties assigned have made significant progress. Economies have grown, but slower. [Page 561] Have slowed exchange rates (sic). He is reading too fast to cover but we should be able to get text. Commitments at Plaza, Louvre, Washington. Exchange rates within ranges roughly compatible—usual formula.
Using indicators in multilateral surveillance. List a few—rapidly. We’ll have to define objective, etc., etc., etc. Might use ranges as goals. Need pragmatism and flexibility. These are main criteria for selecting indicators. Indicators may change from time to time. No automaticity. Can contribute to greater stability.
3:29 PM
GORIA: (Continued) Must give markets confidence in stability. Report should be absolutely confidential—could affect markets. Yesterday and today discussed international trade, especially agriculture will not go beyond OECD Ministerial. Might repeat precisely what was said at OECD. Committed to presenting material for communique. Unanimous agreement reached. Have a paragraph to substitute for paragraph 9 in present draft. International debts—discussion only started regarding poorest of poor. Prepared to reschedule, lower interest rates, and give grace periods. IMF directors initiative much appreciated. Everyone showed a will to reach an agreement next fall.
3:37 PM
No discussion of mid-level debtors. Fanfani; Sherpas (?) will polish statement tonight for review tomorrow.
3:39 PM
KOHL: Public expects two messages, East-West relations, and third world debt. Must go further than previous Summits Communique; must say much more than this report does. Find a way to get a statement for tomorrow that goes much further.
FANFANI: Thinks all agree we must say something decisive and precise. Question has important political aspects. Should also discuss agriculture.
MULRONEY: In Jan-Feb was in Zambia and Senegal, talked to Kaunda yesterday. 650–350 changes in per capita GNP over 4-1/2 years.(Canadian dollars)
External debt grew 67 percent. Per capita investment $47.
Followed IMF but had food riots.
MULRONEY (Continued) and stopped IMF. Aid should be grants not aid; ODA loans should be converted to grants. 60 percent of foreign earnings used to service debts. Endorse Camdessus proposal, Japan to put half the money to triple structural adjustment facility.2
[Page 562]3:49 PM
BAKER: Debt problem different for poorest of poor. Approach must be different for mid-income countries problem is growth. Four principles of (Baker Plan) still valid. Debt of least developed countries mostly official debt. US no longer in position to take 60 percent of exports from debtor countries. Thinks there will be new commercial bad flow. But banks after reserving, in position to be firmer.
LAWSON: Backs what Baker said. Need to work toward more market oriented solution. Develop secondary markets. But for LLDC’s burden of debt is insupportable. Grants must be conditioned on policy reforms. What they need is not more lending and rescheduling, but debt relief. (Gap)
REAGAN: Have we been neglecting teaching how to farm, how to set private businesses? Using volunteers (Peace Corps).
4:00 PM
CHIRAC: Was for IMF in September take action promptly.3 Any proposal from Camdessus will be well thought out—we should endorse.
DECLERQ: Are all initiatives good but should not be scattered—should be concerted.
HOWE: Reagan point should not be passed over unsupported. Good results from human aid.
CLARK: Also supports volunteers.
HOWE: Not just volunteers.
LAWSON (British): Camdessus proposal good but not enough—must deal with debt to individual countries and international organizations.
FANFANI: Summarizes—emphasizing urgency.
NAKASONE: Agrees with Fanfani summary and other remarks. Discuss not just in terms of feelings, make scientific (sic) studies. Various roles—banks, MDB’s, volunteers. Japan will grant $500 million to sub-South African countries. But what is most efficient means of concerting action.
NAKASONE: (Continued) Take supplement IMF as target. Have experts meet, have clear strategy and long-term perspective.
KOHL: Very important subject—Latin America and Africa. FRG has written off $4.2 billion DM. This Summit must go out with clear message. Decide direction now, don’t wait until September. Must [Page 563] subject ethical quality. It is not the children or the starving who are to blame. Case by case, no across the board. Solutions: There are international organizations to devise methods. Political considerations important. Finance Ministers should draw up a text we can adopt tomorrow. We must do something.
MITTERRAND: Lack practical way to deal with debt. Must give Finance Ministers more specific instructions. Our intentions are varied. Must go further this evening.
4:22 PM
MITTERRAND: (Continued) Are we ready or are we not to put up funds immediately? Let’s spend 30 minutes, 15 minutes maybe 5 specifying what Finance Ministers should do.
SHULTZ: Any statement on Sub-Saharan Africa must have important dimension beyond funds. Refer to 85 famine. Problem of maldistribution of food still a problem. Africa a continent of plagues. Locusts last year. AIDS of stunning proportions, affect those who agree to manage a plan that centers only on debt (does not dismiss debt problem). Can be seriously incomplete. A lot more to problem than what is in jurisdiction of Finance Ministers.
ANDREOTTI: Talks about financial problems. Write-off would destroy their credits. Has analyzed whether debts for weapons. Weapons bought with cash. Some least developed countries have bled themselves dry buying weapons for cash. Need monetary and surveillance.
4:34 PM
FANFANI: Calls on Goria—are Finance Ministers prepared to prepare a paper tonight?
GORIA: Two issues: (1) International cooperation (2) The indebtedness situation. Need to decide on certain initiatives Camdessus proposal good. Paris Club—reached, lower interest, grace. He will assume responsibility to convene Finance Ministers for dinner and prepare a statement to submit to Sherpas before too late.
[Omitted here is discussion of the OECD and other issues.]
5:25 PM Adjourn.
- Source: Reagan Library, Stephen Danzansky Files, Summit File, The President’s Trip to the Tokyo Economic Summit 05/03/1986–05/07/1986; NLR–733–15–7–3–1. Confidential. No drafting information appears on the minutes. The meeting was the afternoon plenary session of the Summit. Minutes of the opening meeting of the Venice Summit, which took place June 9 from 9:57 a.m. to 12:08 p.m. are ibid.↩
- A reference to the IMF Managing Director’s proposal to significantly increase the resources of the Structural Adjustment Facility (SAF) over the course of 3 years, beginning January 1, 1988.↩
- Most likely a reference to the annual meeting of the Board of Governors of the World Bank Group and the International Monetary Fund, which took place from September 29 to October 1.↩