Faltering will to help small States

Press, 23 October 1978, Page 10

Faltering will to help small States

By

CEDRIC MENTIPLAY

Comment from the Capital

When the Prime Minister returned from his recent round of monetary and economic meetings he expressed the view that the bigger nations (which he did not specify) lacked the “political will” to help the smaller and emerging States in terms of ideals expressed in the sonorous phrases of United Nations speeches. The disappointment which he felt then was not defined later, as the end of the Parliamentary session and other matters, including preoarations for the General Election claimed his attention. When the pressure eased a little, I asked him to define more closelv what he had meant on his return from Ottawa, New- York and Washington.

“The theme certainly at the Commonwealth Finance Ministers’ conference, and also at the International Monetary Fund and World Bank meetings, was one of disappointment,” he said, “At the last two meetings, which are much bigger, the developing nations do not have the same voice. One sneaks for the group — for the black African nations, one on behalf of the South American countries, one. for the West Indian States. It

doesn’t sound as loud — but the disappointment and the protest is there.” He explained that manv of these smaller nations have development schemes which are in the manufacturing area. Having produced goods of various kinds, and attempting to export them, they encounter barriers in what they see as their potential markets. “They are getting very angry about this,’ Mr Muldoon said. “They say: ’What is the use of our building up our economies if you won’t permit us io trade with you?” Agriculture protectionism has always been an issue, but this is now beyond that. It goes to manufactures and partial manufactures — part-assemblies, and things like that.”

It is in this specific area that Mr Muldoon has noted disquiet building tip. The smaller nations every once in a while looked at the progress made over the last five years, and saw very little. “They are inclined to say: ‘There has been a lot of talk, but no progress’.” The difficulty seen by Mr Muldoon is that in the last month or two the chances of success at the multi-lateral trade negotiations of the

General Agreement on Tariffs and Trade have looked less likely. He understands that the ' Japanese negotiators have gone back to Tokyo and have reported that'Japan must make better otters, or risK the failure of the entire project. “There was a general air of pessimism, if you take the delegates as a whole,” he explained. ”.>ome ot roe leading countries, notably tne United States, endeavoured to strike a note of optimism, but there was a very contrary feeling. The G.A.T.I. multi-lateral trade negotiations, which looked very promising a while ago, certainly do not look so good today.” He predicts that the test will come in the next two months, as the negotiations resume in Geneva. “The whole thing may spill over into the time of the new’ Congress in the United States. The Americans can take powerful action, if the G.A.T.T. multi-lateral trade negotiations do not succeed. And Congress would very likely be of a mind to step in.”

Mr Muldoon’s main prediction is based on this possibility. “Potentially we are in a ” situation where next year you may see some major conflicts in the field of international trade. This should not affect us too much, because they can’t do anything to us that is much worse than what they’re doing now. But as between the United States and some of its-other trade partners, there can be real trade partners, there can be real trade conflict.” I invited him to identify the Powers which he described as not having the “political will” to carry out previously-expounded intentions. He would not be referring entirely to the United States? “Not exclusively,” Mr Muldoon said. “They include all the major industrial countries. They will say: ‘Oh, we have an election coming up’, as in the United States; or ‘We have a coalition Government that might fall apart’, as in the United Kingdom: and the Japanese say something similar. They have a small majority in

their Parliament, and their farmers hold the 7 balance of power. “All around, the smaller countries are saying: ‘lt is all very well to have all these meetings and talk, and all these communiques; but there is no political will among the wealthy countries to do wha‘ has to be done’.” He talked, too, about G.A.T.T., and about its malfunction over the last quar-ter-century. The existence of the non-tariff barrier, and of the specified exemption, had worked against producing the understanding which was the original goal. I suggested that the original goal of G.A.T.T. was the elimination of tariff barriers. Mr Muldoon sees it this way: “They still have nontariff barriers of all kinds. But G.A.T.T. itself was a compromise as the result of the failure of the Havana Conference to reach agreement on a body to regulate world trade. Instead, they got G.A.T.T.. which has now gone for. well over 25 years. G.A.T.T. has never been much good in agriculture, but they kept going.”

Ths Tokyo Round, which began five years ago, has been going so long that it was originally called the Nixon Round. It is now coming to a conclusion. "We may get something out of it, as a last gasp,” is Mr Muldoon’s judgment. “But at the moment, for international trade, it is looking less promising than it did four months ago. The general atmosphere that I detected at this meeting was one of some pessimism in the field of trade. We haven't got an international monetary system to take the place of Bretton Woods. “We have vast sums of Stateless currency sloshing around — what we used to call* Eurodollars — and now all kinds of other currencies as well, far in excess of the total reserves of the countries that can use their reserves to stabilise their currencies. Altogether we have quite a dangerous situation.” “I may not be the best orator in the House, but I don’t think I’m a bad tactician.” — Mr Bruce Beetham, Member of Parliament for Rangitikei. (The correct version of a quotation that was printed incorrectly in our last Comment from the Capital.)