84. Minutes of a Meeting1
SUMMIT PREPARATORY MEETING
[Omitted here is discussion not focused on North-South issues.]
FRANCE—Main North-South issues will include role of LDCs in economic crisis and GNs. Underdevelopment is aspect of industrial country crisis. Helping them is a selfish way to help ourselves, [Page 230] not only economically but also politically. The U.S. Caribbean Basin Initiative is going in the right direction. On GNs, three steps are necessary: 1) it has to begin, 2) it has to protect frontiers/walls between UN and Specialized Agencies (SAs)—issues in SAs could not be taken up in general forum, 3) two problems important besides energy—food and stabilization of commodity prices. We cannot believe the there is nothing new on North-South issues. The French President will be back from long trip to Africa and will have visited UN officials, etc. before Summit. We hope that GNs will begin before Summit.
EC COMMISSION—Third world is too important to ignore. We cannot repeat what was done at Cancun or we will lose credibility.
US—We do not agree that there has been no progress on North-South relations. Perhaps some background is helpful. We began last year with some significant differences of view. We worked hard on a common paper that eventually developed a consensus view. We agreed that two aspects were most important: 1) economic revival of our economies and the world economy, coupled with sound domestic policies in the LDCs; 2) concessional aid for the poorest countries aimed at helping them eventually to participate in the world economy. We placed different emphases on these two points but we all agreed that both were important. On the substantive front, the U.S. did not wait. It moved forward to develop a comprehensive view of its development policy which the President presented before and at Cancun. Since then, we have completed the formulation of our policy toward multilateral banks, which will ultimately free up more concessional resources for the poorest countries. We announced only a week ago our Caribbean Basin Initiative.2 Look at this program. It is a practical example of the principles we articulated at Cancun. It shows how world economic measures—trade and investment—can work together with foreign aid to promote self-sustaining growth. And it involves costs which this Administration is nevertheless willing to incur even in the difficult domestic economic circumstances we face. Now, on top of all this, we adopted a helpful attitude toward GNs. Don’t forget, we never believed these discussions would be worth much. But because our friends and the LDCs seemed to want them, we went along. We asked only that these talks be structured in such a way to prevent damage to the institutions where the real development action would take place. Our Ambassador in New York took the initiative after Cancun. Our President spent numerous hours on this subject and chaired a long [Page 231] NSC meeting in December.3 And what has happened. We have not one response from the G–77. Maybe GNs has lost its appeal for others. Don’t expect us to revive it. But we are not waiting; we are moving ahead on what counts. Maybe GNs will ripen again later.
FRANCE—Why did US not accept EC compromise?
US—Why did LDCs not accept EC text?
FRANCE—Can we find new ways to move forward; new steps toward GNs?
CANADA—If there is a hint of loss of interest in GNs, it will collapse. So Trudeau and Lopez Portillo decided there could be no hint of loss of resolve.
GERMANY—If current situation continues, West will lose its credibility. On replenishment of the banks, we regret the recent developments. It is not of our making. We should not spend much time on North-South issues.
JAPAN—There is no answer yet from South. Facing this situation, what can we as the North do? There is not much to do then at this Summit.
CANADA—Trudeau’s position before Delhi was that we needed one last-minute surge of adrenaline.4 He addressed Cancun participants. He acknowledged great efforts in New York and the openmindedness of the U.S., the spirit of compromise it has shown. Trudeau’s diagnosis is mildly cautious and optimistic, as a result of U.S. efforts. There is no report yet from Delhi. Smith, however, is reported to be very gloomy. How Delhi events will percolate at UN is the question. Perhaps efforts should be coordinated to create an upbeat note after Delhi.
FRANCE—French President will insist on a clear position on GNs.
UK—This is where discussion must focus at Versailles. We must get these things right for communique.
US—There should be no doubt about the US commitment to help the poorest countries and alleviate poverty. But we will not do this in ways that we know have not worked. A recent study commissioned by [Page 232] our Treasury Department examines the policies that have been successful in developing countries.5 Those countries that have not allowed money supply to grow unchecked, that have exercised budgetary discipline, that have not subsidized interest rates, controlled prices and maintained unrealistic exchange rates, that have participated aggressively in international trade, welcomed foreign capital and encouraged savings—these are the countries that have succeeded. We must do everything we can to encourage policies that we know work. Aid is important but it has never helped when other conditions were not right.
- Source: Department of State, Bureau of Economic Affairs, Office of Economical and Agricultural Affairs Files, Official Economic Summit Files, 1975–1991, Lot 93D490: Versailles Summit—Preparatory Meeting February 27–28, 1982. No classification marking. The meeting was held to prepare for the Versailles Economic Summit. No drafting information appears on the minutes. A different set of notes on this meeting, written by Sprinkel, is in the Reagan Library, Executive Secretariat, NSC Trip File, Versailles Summit 1982 Preparatory Meeting—February 27–28.↩
- For the text of Reagan’s February 24 remarks on the Caribbean Basin Initiative to the Permanent Council of the Organization of American States, see Public Papers: Reagan, 1982, Book I, pp. 210–215.↩
- See Document 79.↩
- The Government of India hosted a G–27 conference in New Delhi February 22–24, which focused on building a consensus within the G–77 on a Global Negotiations position, South-South cooperation, and India’s leadership within the G–77. Telegram 2296 from New Delhi, February 6, outlined a recommended U.S. strategy for the meeting. (Department of State, Central Foreign Policy File, Electronic Telegrams, D820067–0919) Telegram 4347 from New Delhi, March 3, reported on the meeting. The Embassy noted that the “U.S. was reportedly identified as main obstacle to launching GNs, but we believe, from what we have heard, that consultations had positive benefit of making clear the firmness of U.S. position on GNs.” (Department of State, Central Foreign Policy File, Electronic Telegrams, D820115–0234)↩
- Presumably a reference to the paper, “Economic Outlook of the Non-OPEC Developing Countries,” prepared by the Treasury Department’s Office of Developing Nations’ Finance and distributed on January 29. A copy of the paper is in the Reagan Library, Norman Bailey Files, International Economics File, International Debt (01/29/1982).↩