Foreign Relations of the United States, 1977–1980, Volume III, Foreign Economic Policy

252. Report Prepared by the Special Representative for Economic Summits (Owen)¹

Washington, January 2, 1981

Report of Meeting of Summit Personal Representatives, Paris December 9 and 10, 1980

1. General. At the evening meeting of December 9, three general questions were discussed:

(a) Summit Arrangements. Canadian representatives explained that the heads of government were expected to arrive at Ottawa July 19; they will dine July 19 and meet July 20 in a nearby resort (Montebello), and will return to Ottawa for the second day’s meeting (July 21). Dinner on Sunday, July 19, will be a tete-a-tete among leaders only, to help them to get to know each other. The Tuesday, July 20, session in Ottawa will include Ministers, as in the past. There remained a difference of view about the appropriate format for the Monday, July 20, session in Montebello. Three possibilities were discussed:

—The Canadian Personal Representative proposed that all Monday should be spent in private talks among leaders, with only the Personal Representatives present as note-takers. Ministers would meet separately in either Ottawa or Montebello—preferably to discuss issues requiring Ministerial, rather than heads of government, action.

—The German Personal Representative proposed that the Venice format be followed, which would mean that two Ministers would be present with each head of government for the Monday morning economic discussions, and Foreign Ministers, only, would be present for the heads of governments’ Monday afternoon discussion of foreign policy issues. The Germans felt strongly about the need for such Ministerial attendance; the Chancellor would find it difficult, from the standpoint of coalition politics, to exclude either of the Ministers (both being of the other coalition party).

—The British accepted the German suggestion regarding Foreign Minister attendance at the Monday afternoon discussion of foreign policy, but wanted to limit the Monday morning discussion of economic issues to heads of government and Personal Representatives. The question was raised by some delegations as to whether heads of government might want to have at least one Minister present in the morning when North/South issues were under discussion.

It was agreed that each of us should check with his leader and report views to Canada as soon as possible.

Comment: The Germans felt more strongly about including Ministers in the discussion of economic issues than the others felt about excluding them. Agreement on including them seems likely.

Derek Burney, of the Canadian Government, will be in touch with press colleagues of the other Summit governments about media coverage. Discussion of this matter indicated that while some governments want more informal Summits in theory, none want to reduce on-site media coverage of Summits by their national media—if only for fear of offending excluded correspondents.

(b) Foreign Policy Consultation. The Canadian Personal Representative stressed the need for more effective foreign policy consultation among the Summit nations and suggested that the Summit Preparatory Group and the Summit itself might provide a framework for such consultation. The British and other Representatives suggested that it would be best to proceed pragmatically—i.e., to follow the Venice precedent by arranging a meeting among the seven nations’ foreign policy experts a month or two before the Ottawa Summit in order to prepare for discussion of foreign policy issues at that Summit. The Canadians seemed to recede from their more ambitious proposal in the face of this suggestion. There was no discussion of existing Four Power procedures for political consultation.

(c) Future Summits. It was noted that the Ottawa Summit would be the last in the first cycle of seven Summit meetings, one of which had now taken place in each of the Summit nations. A question to be considered at Ottawa would be whether to proceed with a second cycle. If so, the next host would be France in 1982 and the United States in 1983. (This is consistent with past practice, which has, with a few exceptions, not involved Summits being hosted by a country that is holding a national election in the Summit year. That practice is not surprising: Since one of the main reasons for holding Summits has been to justify by international consensus such politically unpopular economic decisions as increased access to domestic markets for foreign imports, heads of government have rarely sought to draw attention to Summitry in domestic election campaigns, although Prime Minister Thatcher is reported to believe that the preceding Labour government tried to do so.)

2. North-South. The morning meeting on December 10 discussed the list of questions that the Canadian government had prepared, on the basis of submissions from other Summit governments, regarding North-South issues. (See Tab A.)² These questions were intended to provide a basis for the study of foreign aid that the Personal Representatives had been asked at the Venice Summit to undertake for the Ottawa Summit. It was agreed that each Personal Representative should submit short answers to these questions, which would be discussed at the next meeting of the Personal Representatives. (I have asked the US agencies concerned to prepare these draft answers.) The next meeting will be February 18 and 19, with a dinner beforehand on February 17. The United Kingdom Personal Representative indicated that HMG might host the meeting in London. Three people per country should attend. (The US Delegation to such meetings has consisted in the past of the US Personal Representative, the Under Secretary of the Treasury for Monetary Affairs, and the Under Secretary of State for Economic Affairs.) After discussion of these questions by the Personal Representatives in February, they will agree on how the paper reflecting that discussion should be prepared for the Ottawa Summit. A 4–5 page introduction, dealing with the wider policy framework within which these questions is to be addressed, will be prepared by Horst Schulman, the German Personal Representative.

3. Other Economic Issues. At lunch on December 10, these issues were discussed:

(a) Macro-Economic Policy. The first step in planning the Ottawa Summit discussion of macro-economic issues will be to ask someone to perform the function that Charlie Schultze has undertaken to the satisfaction of Summit governments in the past—i.e., to prepare a paper on macro-economic prospects and policies for the Summit Preparatory Group. The general expectation was that this person will be Charlie Schultze’s successor as head of EPC Bureau of the seven Summit nations’ macro-economic experts. The new head of the US Council of Economic Advisers will be asked to host a March meeting of this Bureau in Washington, where he will presumably also be asked to head the Bureau and write this paper. The Canadian Personal Representative will raise this matter at the February Personal Representatives’ meeting.

(b) International Monetary Policy. Whether, and if so how, the Ottawa Summit might address international monetary issues, including the substitution account, will be considered at the Personal Representatives’ February meeting.

(c) Nuclear Fuel Supply. There was a brief discussion of whether the Ottawa Summit should consider the issue of US nuclear fuel supply for Europe and Japan. The Personal Representatives agreed that the US would prepare an informal paper describing ways in which this issue might be addressed, and the pros and cons of doing so. I have asked the State Department to prepare such a paper, drawing, among other things, on the substance of the discussions that Ambassador Gerard Smith had in late 1979 with British, French, German, and Japanese representatives about changes in present nuclear fuel supply arrangements.

4. Energy. At the afternoon meeting on December 10, the Ottawa Summit energy agenda was discussed.

(a) Monitoring. All agreed that the Ottawa Summit should monitor fulfillment of energy commitments made at the Venice Summit. This will include monitoring of Venice agreements regarding international cooperation to develop new technologies, as well of individual countries’ national actions to achieve the agreed Venice energy production and conservation goals. The seven nation High Level Group, established at Venice to undertake this monitoring in cooperation with IEA head Lantzke, will prepare a preliminary report for the Personal Representatives by early March, and a final report in May or June. The French suggested that this Group might also consider whether the production and conservation targets agreed at Venice should be changed, since they believe that these targets rest on over-optimistic assumptions regarding future OPEC production. The Japanese and others demurred, but seemed mildly pacified when the French indicated that they would only raise the need for change in targets if the High Level Group reported that large changes were required by new developments.

(b) Relation to World Bank. It was agreed that the Ottawa Summit might give a further push to the World Bank’s creation of an affiliate, largely financed by the private market, to help the LDCs produce more energy, as discussed at Venice, and that this should be a second item on the Ottawa Summit’s energy agenda.

(c) Oil Bank. The French and Italian Personal Representatives pushed for Summit discussion of proposals that their Energy Ministers have made for new agreements regarding creation of an allied oil stockpile and drawing rights on that stockpile. It was agreed that each Summit Personal Representative would advise the Canadians in two weeks as to whether he would object to the High Level Group examining these proposals. Since then the British have objected, suggesting that these issues should be considered, instead, in the International Energy Agency and the European Community. The Japanese and Germans have also indicated some reservations, but are prepared to go along with a consensus in favor of considering these issues. The other Personal Representatives agreed that the French and Italian governments were entitled to consideration of their proposals in the course of Summit preparations. The Canadians will raise this issue again at the February meeting.

(d) Long-Term Strategy. It was agreed that each Personal Representative would distribute to the other Representatives before the February 18–19 meeting a paper about whether long-term oil pricing and production strategy should be included on the Ottawa Summit agenda. (The view of the State Department, which is preparing the US paper, is that it would not be desirable for the Summit to get into this issue, unless it seems that the OPEC countries are likely soon to agree on such a strategy.)

(e) Nuclear Waste. It was agreed that the US Personal Representative would distribute to the other Representatives before the February 18–19 meeting a paper indicating whether the Ottawa Summit should consider this issue and, if so, in what context. (This task has also been assigned to the State Department.)

5. Illicit Payments. I reminded the Personal Representatives’ Group that the Venice Summit had agreed that if our effort to conclude a UN agreement prohibiting illicit payments “falters, we will seek to conclude an agreement among our countries, but open to all, with the same objective.” Others noted that the US now labors under a disadvantage, since US law prohibits such payments while exporters in other countries are not similarly inhibited. The Canadian chairman asked that the US prepare a paper on how such an agreement might be negotiated in preparation for the Ottawa Summit, with a view to seeking acceptance of the agreement at that Summit. (I have asked the State Department to prepare such a paper, for distribution to the Personal Representatives before their February meeting.)

Henry Owen³

1. Source: Carter Library, National Security Affairs, Staff Material, Office, Outside the System File, Box 60, Chron: 1/81. Confidential. Sent to Brzezinski under cover of a January 5 memorandum from Owen; Brzezinski initialed Owen’s cover memorandum and wrote “fine.” (Ibid.)
2. Tab A, attached but not printed, is an undated and unsigned list of 21 questions entitled “Aid and Other Contributions to Developing Countries—Consolidated Short List of Questions.”
3. Printed from a copy that bears this typed signature.