90. Memorandum From Secretary of State Haig and Secretary of the Treasury Regan to President Reagan1
SUBJECT
- Strategy for Success at Versailles
The Versailles Economic Summit is an historic opportunity to reverse the tendency of nations to look inward as a result of domestic economic difficulties. Your leadership is required to strengthen international economic cooperation, the international trading system and allied unity on economic issues vis-a-vis the USSR. Positive results in these areas will also set the tone for the rest of your European trip, particularly the NATO Summit. Each participant at Versailles has a shopping list, with inevitable conflicts among objectives and among means of pursuing those objectives. In the final phase of preparation, progress will depend, to a degree, on the willingness to engage in some “give and take” to arrive at a package acceptable to all.
Country Positions
We plan to stress the need for improved consultation and coordination in the setting of medium-term economic policies, with the objective of achieving greater economic discipline and greater international financial stability. Our other priorities are to strengthen the multilateral trading and investment system and to reinforce Western solidarity in economic relations with the East.
The Europeans, suffering from weak economies and high unemployment, are cautious; many would rather avoid specific or “overly ambitious” commitments on trade and East-West issues at the moment. On the other hand, they will play up North-South issues, specifically the “global negotiations,” largely for symbolic reasons. The Japanese will support the broad trade objectives for their own reasons, but are closer to the Europeans on East-West questions. The French will be pushing a technology initiative, which is a Mitterrand pet, but which envisages a large government role in the identification, development and control of technology. This issue gives us an opportunity to stress how our market-oriented approach stimulates new technology and innovation.
[Page 245]Trade-offs
There are some trade-offs within each of these issues, and we may be able to trade off between some areas:
[Omitted here is information not focused on North-South issues.]
— On North-South issues, we recognize the importance of aid especially for the poorest countries, but we are pressing an approach that stresses the importance of sound economic policies, effective use of aid, of financial flows other than aid and of a free market orientation in trade, investment and domestic policies in developing countries as essential ingredients in the development process.
The Europeans, largely for symbolic reasons, are pressing for Summit acceptance of a number of points: global negotiations, an IBRD energy affiliate, an IDA special fund, and more financing for stabilization of LDC export earnings. These are in bracketed language in the draft Declaration. Provided we could get firm European agreement to protect, in global negotiations, the specialized agencies such as the IMF and GATT, we would explore some procedural compromises which could buy us stronger commitments from other nations in support for our positions. This might also improve prospects for progress on credits to the USSR.
[Omitted here is information not focused on North-South issues.]
- Source: Reagan Library, Douglas McMinn Files, Economic Summit Files, France—Senior WH Group Meetings. Secret. Sent under a May 21 covering memorandum from Clark and Deaver to multiple recipients as a preparatory document for a May 21 Senior White House Group meeting with Reagan on the Versailles and NATO Summits.↩