Payments, trade talks make headway — P.M.

Press, 14 May 1984, Page 8

Payments, trade talks make headway — P.M.

NZPA staff correspondent Washington

An informal two-day international meeting on world trade and payments problems ended in Washington at the week-end with a consensus, according to the Prime Minister, Sir Robert Muldoon, that there must be more meetings of politicians to negotiate the intricacies of changes in the General Agreement on Tariffs and Trade.

Working parties of officials are meant to conclude studies by the end of this year on such items as bringing agricultural products under the G.A.T.T., but few at the high level meeting in Washington, convened by United States trade representative, Mr Bill Brock, appeared to believe that the working parties would finish their work on time.

“You cannot get any will from officials who go to Geneva to negotiate in G.A.T.T. with a brief from their Cabinet,” Sir Robert told New Zealand reporters afterwards.

“They do what their brief says... whereas at the political level you can make some compromises. “The suggestion is that it may be decided that those (meetings) or some of them, be at Ministerial or political level and that this informal group might meet again — which we have not determined — but move the thing forward and in essence give the G.A.T.T. a new mandate.” Sir Robert said that real impetus came for accelerating studies on the feasibility of bringing agricultural

trade under the G.A.T.T. — a traditionally weak area — and that Mr Brock was determined to do something about the European Common Market’s Common Agricultural Policy, which leads to heavily subsidised agricultural production and problems for New Zealand meat and dairy exports. Sir Robert cautioned that G.A.T.T. had done “next to nothing” on agriculture since 1948, “so it is not going to change much overnight,” but said there was now “real progress” on the issue. If the Reagan Administration was re-elected, “and it looks as though it probably will be — I would be quite optimistic. “I think we made more progress at this meeting than they would make at any formal one,” he said.

The International Monetary Fund and the World Bank both held regular Ministerial meetings, Sir Robert pointed out, but G.A.T.T. held its first Ministerial meeting in nine years in 1982, “and it was a shambles.” Sir Robert and Mr Brock both said in briefings yesterday that the structure of the Washington conference — aides were excluded and no formal resolutions or communiques were required — made it unusually constructive.

Represented were the E.E.C., France, Japan, the United States, Australia, New Zealand, Brazil, India, South Korea, the Philippines, Yugoslavia, Sweden, Canada, Mexico and the ■I.M.F. and G.A.T.T. - a judicious mix of developing countries, “debt-crisis”

countries and trading nations in between.

“We just sat there for all that time, Ministers only, and looked for common ground, and found quite a lot with countries that are normally taking an entirely different point of view,” Sir Robert said. The Prime Minister did not mention the phrase “Bretton Woods” in any of his briefings in Washington, but he indicated that acceptance of his basic thesis — that long-term changes must be made in the trade and payments system — is gaining wider acceptance, a view that is being borne out by comments from American Administration officials such as Mr Brock. Sir Robert reiterated his view that the present recovery will be short-lived, collapsing next year or in 1986, and that new or modified mechanisms need to be put in place by then. “That is the amount of time they have got to get some movement,” he said. “When the next downturn comes you are going to get countries such as Brazil, Argentina, probably Mexico, maybe Venezuela, others... the Philippines of course...all coming to a crisis at once. All the arithmetic we have got makes that clear.”

Figures produced at the meeting by the I.M.F. indicated that private banks would need to increse lending to the 36 “crisis nations” by SUS2O billion this year, Sir Robert said.

“Unless they can see something that gives them a bit of confidence, it might

be difficult for that to happen.” The big banks would “certainly be at risk” of going under when the downturn came, Sir Robert said, “and they know it.”

He said that in the United States the banks underwriting loans to Third World countries needed to mobilise up to 1000 smaller banks to come in with them. He agreed that they would be chary about continuing such loans.

“On the other hand,” he said, “it is clear that at the highest level the American Administration is giving attention to this.” Sir Robert said he believed the I.M.F. would have to become involved.

Sir Robert left Washington yesterday for London for a Commonwealth meeting on trade and payments. He goes on from there to the Organisation of Economic Co-operation and Development in Paris, then to a meeting of the Pacific Basin Economic Council in Vancouver, Canada.

Before he left Washington, Sir Robert was presented with a jar of jellybeans, a gift from President Reagan. All participants at the meeting received a sample of the President’s favourite sweets.