North-South dialogue


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North-South dialogue report of a staff study mission to the Conference on International Economic Cooperation held in Paris, December 16-19, 1975
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vii, 21 p. : ; 24 cm.
United States -- Congress. -- House. -- Committee on International Relations
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International finance   ( lcsh )
International economic relations   ( lcsh )
Economic development   ( lcsh )
federal government publication   ( marcgt )
non-fiction   ( marcgt )


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At head of title: 94th Congress, 2d session. Committee print.

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University of Florida
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Table of Contents
    Front Cover
        Page i
        Page ii
        Page iii
        Page iv
    Letter of transmittal
        Page v
        Page vi
    Table of Contents
        Page vii
        Page viii
    Harmony or acrimony?
        Page 1
    Likely direction of CIEC
        Page 2
    Commissions and decisions of CIEC
        Page 3
        Page 4
    Appendix I. Memorandums from the preparatory meeting for the Conference on International Economic Cooperation, October 13, 1975
        Page 5
        Page 6
        Page 7
        Page 8
        Page 9
    Appendix II. Final communique of the Conference on International Economic Cooperation, December 19, 1975
        Page 10
        Page 11
    Appendix III. Address by Secretary of State Henry A. Kissinger at the Conference on International Economic Cooperation, December 16, 1975
        Page 12
        Page 13
        Page 14
        Page 15
        Page 16
        Page 17
        Page 18
        Page 19
        Page 20
        Page 21
        Page 22
    Back Cover
        Page 23
        Page 24
Full Text

,) )~fJ~,


THOMAS E. MORGAN, Pennsylvania, Chairman

ROBERT N. C. NIX, Pennsylvania PIERRE S. rDC PO
ROY A. TAYLOR, North ('Carolina
LEO J. RYAN, California
I)ONALD W. RIEGLE, JR., Michigan
HE:LEN S. MEYNER, New Jersey
DON I.RfI'.WAhington

S S I A,% A. CZARNECKI, Chief of Staff

J ^ i .i ';.**
, ., r (n)
,V .-.. UIr4-p .~ ,( )


)OMFIELD, Michigan
WINSKI, Illinois
NAN, JR., Alabama
RKE, Florida
NT, Delaware
[ALEN, JR., Ohio
STER, JR., Pennsylvania
L., Kansas
LMAN, New York
ER, Ohio
)MARSINO, California

T*,f, .>
**..*I a

A%4 t-i


Washington, D.C., February 9, 1976.
This report has been submitted to the Committee on International
Relations by the staff study mission that attended the Conference on
International Economic Cooperation, December 16-19, 1975.
The findings in this report are those of the staff mission and do
not necessarily reflect the views of the members of the full Commit-
tee on International Relations.
TroMAs E. MORGAN, Chairman.

Digitized by the Internet Archive
in 2013


FEBRUARY 9, 1976.
Chairman, Committee on International Relations.
DEAR MR. CHARMAN: Transmitted herewith is a report of a staff
study mission to the Conference on International Economic Coopera-
tion, which was held in Paris, December 16-19, 1975.
The CIEC resumed the Producer-Consumer Dialogue which took
place in April 1975 and is the first major forum for the consideration
of international economic issues since the adoption of the Resolution
on International Economic Cooperation by the Seventh Special
Session of the United Nations (September 1975).
The Congress of the United States has taken a strong interest in
the various proposals and discussion regarding the restructuring of
the international economic system and has taken an active role in the
formulation of U.S. foreign economic policy. Because of the com-
mittee's interest and responsibilities in these matters, you assigned me
to attend and report on the Conference on International Economic
Cooperation. The report follows.
Staff Consultant.


Foreword ----------------------------------------------- i------In
Letter of transmittal------------------------------------- v--------
Harmony or acrimony?-------------------------------------- 1------
Likely direction of CIEC------------------------------------------ 2
Commissions--------------------------------------------------------- 3
Decisions of CIEC----------------------------------------------- 3
I. Memorandumnis from the Preparatory Meeting for the Conference on
International Economic Cooperation, October 13, 1975:
Aide-Memoire attached to the French Government's letter of
invitation dated September 15, 1975------------------------- 5
Lists of subjects to be discussed by the Commissions, as pro-
posed by the United States of America---------------- 6-------
Document submitted by Algeria, Saudi Arabia, Brazil, India,
Iran, Venezuela, and Zaire, in connection with the subject to be
discussed by the Commissions------------------------------ 7
Final declaration of the Preparatory Meeting for the Conference
on International Economic Cooperation, October 16, 1975------ 7
II. Final Communique of the Conference on International Economic Co-
operation, December 19, 1975--------------------------------- 10
III. Address by Secretary of State Henry A. Kissinger at the Conference
on International Economic Cooperation, December 16, 1975-------. 12



Despite press emphasis onl the "acrimony" during the resumed
North-South Dialogue (CIEC) in Paris, the Conference of 19 devel-
oping and S industrial nations was, for tlhe most part, characterized
by harmony, and, with the exception of the presentations of a few
(deleegations. an absence of the usual new international economic order
rhetoric. The ministerial conference can be judged a success simply
by tlie. fact that it took place and successfully launched the four com-
mnissions-on Energy, Raw Materials, Development, and Finance-
and that the normal rhetoric was toned down-an indication that
many of the participants are desirous of initiating a constructive
Conclusion of the CIEC ministerial meeting was delayed by an Al-
gerian proposal that the guidelines 2 for the commissions should be
made more specific. The 19 developing nations were not unanimously in
favor of this proposal; many seemed to support it only reluctantly.
The compromise agreement-that the cochairmen will meet on Janu-
ary 26 to discuss the agenda-should be interpreted as a victory for
the moderates who are concerned that the dialogue and the work of
the commissions commence without demanding that the discussion
and outcome be prejudged.
There were indications that tlhe issue of enlargement of CIEC-
increasing the representation of the developing nations-might be
raised during the. ministerial conference. The fact that it was not is
another indication of the real desire of many participants to avoid
acrimony and to establish a rhetoric-free dialogue.
Of the numerous issues raised by the new international economic
order and the Sixth and Seventh Special Sessions of the United Na-
tions, those that can be dealt with now and on which there are possible
actions and compromises on specific proposals are before various in-
ternational institutions: monetary and aid issues are before the
IMF/World Bank and the regional lending institutions; trade
issues are before the GATT; UNCTAD is working on a code of con-
duct for technology transfers; the U.X. is considering the establish-
ment of an international center and bank for technology; considera-
tion is being given to the establishment of an International Energy
Institute and an International Industrialization Institute; an Inter-
national Fund for Agricultural Development (IFAD) is being estab-
lished to focus assistance in agricultural production; several specific
commodity agreements have recently been signed.
1 Industrial nations: Australia, Canada, EEC. Japan. Spain, Sweden. Switzerlanl. nnd
the United States; Developing nations: Algeria. Argentina. Brazil. Cameroon, Ecrypt.
India, Indonesia. Iran. Iraq. Jamaica, Mexico, Nigeria, Pakistan, Peru, Saudi Arabia,
Venmzuela. Yugoslavia, Zaire and Zambia.
2 See appendix II, p. 10.

The hard issues regarding the restructuring of the international
economic system-those on which there is least agreement-indexa-
tion. energy, raw materials-are before the CIEC commissions. The
one area regarding raw materials in which a concrete proposal has
been made-expanding tlhe compensatory financing mechanism of
the IMF in order to ease balance-of-payments problems due to the
decline in export revenues-falls within the broader issue of stabiliza-
tion of all export earnings and is being acted upon in the IMF/
World Bank forum. The espousal of the concepts of indexation and of
an integrated commodity program to protect the price of raw materials
hlas been utilized to publicize and draw attention to the problems of
many developing nations in raw materials but has not entailed any ex-
planation of how the concepts could be put into effect. To a large
extent, the developing nations either (1) are not sure where their
interests lie in regard to raw materials, because most are both exporters
and importers, or (2) favor protecting raw material and energy prices
but have no specific proposals for how this could be done.
Depending on the point of view of the particular country, CIEC
can be viewed as an undertaking aimed at energy, at raw materials, at
development, or at restructuring the international economic system.
At least initially, the United States viewed the producer-consumer
dialogue as an energy conference. The continued priority the United
States places on energy is demonstrated by its demand to cochair the
Energy Commission. Tlhe primary U.S. goal on energy has been to
seek a reduction in the price of petroleum. However, (1) the United
States and the other industrial nations have learned to live with $12/
barrel oil, and (2) there is general agreement that if there is to be a
reduct ion in the price of oil, it will come from the play of economic and
market forces, not from political concessions by the OPEC nations.
For their part, the OPEC nations are seeking protection from infla-
tion for their petroleum- and investment-generated income. To date,
this has been done within the confines of OPEC. No one has devised
a process for indexing petroleum within a broader arrangement and
it is unlikely the industrial oil consumers would consent if such a
scheme were put forward. Therefore, it would seem unlikely that any
concrete proposals or actions on energy will result from CIEC.
If the United States sees CIEC as mainly an energy conference,
then a failure to attain any of its energy goals would make it unlikely
that the United States would grant concessions in any of the other
areas. However, there are indications that the United States now
views CIEC in its broader context. This is crucial for the developing
nations, as they see the United States as the kingpin to any significant
action-as, the only nation with a veto.
Some interpret the U.S. interest in participating in CIEC as aimed
at separating the OPEC nations from the other developing nations.
If this is the case, it will be accomplished, not by attacking OPEC di-
r(cfly, lbut thlrolugh being forthcoming on the problems faced by the
developing nations and engaging in a full and open dialogue of where
tie interests of various nations really lie.

The main benefit of CIEC would seem to be derived from the estab-
lishment of a real dialogue on the most controversial issues. To the
extent the hard issues are confronted in the CIEC commissions, they
can be kept out of the consideration of less intractable issues and
thereby prevented from hindering progress elsewhere. The tone set
at CIEC will affect the tone in other forums. The second major benefit
from CIEC will be educative-to shed light on the problems facing
countries and to minove the discussion beyond the rhetorical level to
the consideration of specific problems and solutions.
As for the purposes to be served by the four commissions, the Energy
Commission, like the CIEC in general, can hope mainly to establish
a dialogue on energy and bring a better understanding of one another's
problems. It can serve to provide a clear elucidation of the setbacks
which high oil prices have brought to economic conditions within in-
dustrial nations and to the prospects for development of Third and
Fourth World nations-and thereby to international economic sta-
bility and to the economic interests of all nations-and to the concern
of petroleum-exporting nations for protecting the earning power of
their one source of export revenues.
The Raw Materials Commission can serve a similar goal: in p'artic-
ular, it can help enlighten both sides to the problems involving par-
ticularly commodities and possibly lead to the signing of commodity
agreements covering individual commodities outside the CIEC
It is uncertain the direction in which the Development Commission
will go. It was created at the urging of the developing nations. It
would be the commission that would discuss food issues and broad de-
velopmental strategy, and could delve into issues before the other
commissions, even into energy resource and raw materials develop-
ment in the developing countries.
The industrial nations would like to focus the Finance Commission
on the financial aspects of issues before the other three commissions,
while the developing nations hope to direct it toward a consideration
of the international monetary and financial system. It is likely that
the dialogue will include the broader picture, and the Commission
could be particularly useful in considering and developing ways to
bring the OPEC nations with a major stake in the international
financial system into the formal and informal consultative mecha-
nisms of international decision-making. However, the industrial ma-
tions are unlikely to make significant, concessions in this area. :.icli as
granting the developing nations as a whole a laro'er voice in interna-
tional monetary decision-making. (The OPEC vote is to be raised
from 5 percent to 10 percent in the IM3F, lbult this is being done in re-
turn for an increase in OPEC's financial participation in the IMF
and is not seen by some developing nations as an increase in the voice
of tlhe developing nations as a whole.)
Their niinisterial conference confirmed the 0 coclairnmen of CIEC-
Allan J. MacElaclien (Secretary of State for Eixteernal A affairs of
3 See appendix II, p. 10.

Canada) and Manuel Perez-Guerrero (Minister for International
Economic Affairis oif Venezuela).
Each (Commi.,sion is composed of 15 nations; 5 industrial and 10
E,,'l/y 1Coin/, ;.son.-United States and Saudi Arabia (cochair-
men), and Algeria, Brazil, Canada. Egypt, EEC, India. Iran, Iraq,
Jam iica, Japan. Switzerland. Venezuela, and Zaire.
pt''i/,, Ma /. 'li,. Coil?1ss;on.-Jalpailn and Peru (cochairmen), and
Algentina. Alist-traiia. Cnameroon. EE(', Indonesia. Mexico, Nigeria,
Spainl. 1-nited States. Venezuiela. Yugoslavia. Zaire. and Zambia.
D ,'Jofm<, ( Com,'x,.,o..--dE(E and Alberia (coclairmen), and
Aruenitina. Ca( ameroon, Caniada. India. Jimnai'a. Japan, Nigeria. 1Paki-
stami. Peru, Swvedeh, unitedd States. Yugo,-lavia al1d Zail1e.
I";h, we Coin....%;.o.-EEC and Iran (cocl'airlmen) and Brazil,
Egypt. India, Indo.nesia. Iraq. Japan. Mexico. Pakistan, Saudia
Arabia. Sweden. Switzerland, United States., and Zambia.
International organizations concerned witli thle matters being dis-
cs.sed can be invited to participate in the discussions of a commission
but will not have a vote. Decisions will be made by consensus-deter-
mined when thliere is no objection. It is thought that each commission
will meet for a 1)eriod of 3 to 5 days every 4 to 6 weeks.
Thel cocliair i en will meet on Janulary 26, 1976, to consider the
agenda of the various commissions. The commissions will commence
meeting on February 11, 1976. A second ministerial meeting will take
place in about 12 months.



1.1. It has been agreed that the questions to be discussed during the dialogue
between industrialized countries and developing countries are energy, raw mate-
rials and the problem of development, including all related financial questions.
1.2. These questions will be dealt with on equal footing. The participants in
the dialogue will in particular spare no effort to advance toward constructive
solutions on each of these subjects.
2.1. A new preparatory meeting will be held in Paris at as early a date as
possible, and no later than October 15, compridng the same members, at the
same level and in accordance with the same rules of procedure (particularly
as regards observers) as the preparatory meeting last April.
2.2. The name of this meeting will be: "Preparatory meeting for the conference
between industrialized countries and developing countries" or "Preparatory
meeting for the conference on international economic cooperation".
2.3. The task of the preparatory meeting will be:
To confirm the consensus reached at the April preparatory meeting on the
convening of a limited but representative conference, on the number of its
participants and on the procedure for their selection.
To submit to the conference proposals on the setting up of committees and
their composition (members and observers).
2.4. The preliminary meeting should be plrelpared in such a way that it reaches
a consensus within no more than two to three days.
3.1. The preparatory meeting will be followed up, within a maximum of two
months, by the conference itself. The conference will comprise 27 members, eight
from the industrialized countries and 19 from the developing countries. Each of
these two groups will select its representatives to the conference within one month
after preparatory meeting.
3.2. The conference will open at the ministerial level. In order to ensure the
actual participation of all the ministers, it would be preferable that its duration
does not exceed three days.
3.3. The essential task of the conference will be to decide on the proposals to be
submitted for its approval by the prel)paratory meeting.
3.4. This should induce it to set up four committees, corresponding to the
themes of the dialogue, to determine their composition, to set general guidelines
for them within the framework of paragraphs 4.3. to 4.6. inclusive and to a-ree
on what follow-up their work should have.
4.1. Thliese committees will not have more than 15 members. In determining-
its representation in each committee, each of the two groups at the conference
will choose from among its members, those who, because of their special interest
and the overall significance of their participation seem best suited to take p;irt
in order that the work may be carried out in an effective and responsible man-
ner. The chairmanship of each of the committees will be assumed by two co-
chairmen designated by each of the two groups respectively.
4.2. The committees will be composed of high-level experts representing tlieir
4.3. The committee on energy, within the framework of an overall s.udy of
l)rospects for energy production and consumption in the world, inclndin'g hydro-
carbons, will lie entrusted with facilitating through suitable ways 1111id nc;in.
the arrangements between oil producers and consumers which may seem
4.4. The committee on raw materials, through suitable ways and me i 11 and
taking the exi.stinz situation into account, will be entrusted with facilitation_, the
.'rrnzements which may seem advisable in the area of raw mnteriais-UiKi.'1d-
in f Iood ,rod't.s-wlich are of particular interest to the developing .couitries.

4.5. The committee on development, through suitable ways and means and
tatkiniz thi existing situation into account, will be entrusted with facilitating the
arrangements which may seem advisable in the area of cooperation for
4.4. The committee on financial affairs, while respecting the jurisdiction of
international institutions (IMF, world bank), will study all financial problems,
izcl idin.g their monetary aspects, related to the work of the three preceding
('i11iIIiitrees. It will be composed of an appropriate number of members from
tich utif these three committees.
4.7. The committees on raw materials and development will, in particular.
take into consideration the work carried out by other appropriate international
lilies and will establish the necessary contacts with these groups.
4.8 Joint meetings of the co-chairmen of these committees may be planned if
the Ineed aris'es.
4.). o()bservers from organizations which are directly concerned with the prnlo-
lemis being discussed will be able to attend the committees and will have the
right tipo speak.
5.1. The conference will meet again at the ministerial level in about 12
io(ili lbts.
5.2.. (Onei or several meetings of the conference at the level of government
OfficialNn may possibly be held at least six months after the first meeting of the
coi inference at the ministerial level.



(1) Oil pricr.e, their relationship to long term demand and supply for energy
aid to world economic progress ;
(2) Security of supply and markets for oil and oil products ;
(3) Cooperation alliOlng developed and developing countries to promote increased
ener -g-y supplies.
(1) .\A(,ce-s to ,4iplily and imlnrkets for raw materials;
(2) 'lro'ei s of stability (if export earnings;
(3) Growtlh and (liversiticatioI of export trade;
(4) l-:inliainveienIt of loIng run supply of raw materials through application of
capital. mannagemient, and technology with mutual resplect for contractual
(5) l Eilhanceiint. (if functioning and stability of markets for commIodities, in-
('ludii.l. food. oil a Icase-hy-case basis.


(1) Problems caused by pI yments deficits of developing countries particularly
the most seriously affected ;
(2) Financial assistance, arra ugemnents conducive to the transfer of technology.
international investmileit and capital market access to accelerate growth inll
developing countries;
(3) l'roinotion of agricultural and floo( production through, inter alia. enlarge-
ilent of world food plodulction all pacity, particularly illn developing cou-ntries.
:1l1d food aid;
(4) P'rotioni? o rf development through (enlhanned trade opportunities among de-
ve.loped :n d1( detveloqing countries;
(5) 1',,1i'-ie- for ipri'iiiot Ing ra;lpd indiidntril growth.

Financial issues related to work of other coinmiissions, for example:
On EnergyI
Financial consequences of energy prices;
Conditions for international investment, including placement of surplus
oil funds.

On Raw Materials:
Financial implications of commodity arrangements;
Export earnings stabilization.
On Development:.
Financing of investment projects in the developing countries;
Financing of food imports of developing countries and increased agri-
cultural production;
Approaches to payments deficits of developing countries.

The delegations of the countries mentioned above recommend that the general
guidelines be inspired by the provisions of the Resolution 3362 of the Seventh
Special Session of the United Nations General Assembly on "Development and
International Economic Cooperation", and also take into account, inter alia, the
1. The Commission on Energy should consider: development and demand of
energy, hydro-carbons and other resources, including the protection of the pur-
chasing power of energy export earnings.
2. The Commission on Raw Materials should consider: development and sup-
ply conditions of raw materials in respect of development needs of developing
countries, including the revalorization and protection of the purchasing power of
developing countries export earnings.
3. The Commission on Development should consider: trade (access to markets
for products of developing countries, etc.; accelerated industrialization; transfer
of technology; development of agriculture; development of infrastructure; prob-
lems of supply of food and fertilizers (special attention to devising measures
for ensuring adequate supplies of food and fertilizers at reasonable prices to
developing countries) ; special and urgent attention to the question of the grave
difficulties of MSAC's created by the current economic situation; and the need
to increase present assistance to meet their pressing requirements.
4. The Commission on Financial Affairs should consider: relevant aspects of
international monetary problems; financial co-operation and investment; and
financial flows and investments in industrialized countries, including the prob-
lems of long-term investments, the protection of the real value of financial assets
and problems of the international financial markets.
15 OCTOBER 1975.
Paragraph 1 of Doc RP 11/10 should read as follows:
"1. The Commission on Energy should consider: development and conditions
of supply and demand of energy, hydro-carbons and other resources, including
the protection of the purchasing power of energy export earnings."

1. The participants in the Preparatory Meeting for the International Con-
ference proposed by the President of the French Republic, which was held in
Paris from 7 to 15 April 1975, met again at the International Conference Centre
from 13 to 16 October 1975 under the technical chairmanship of Mr. de Guirin-
gaiud, Ambassador of France, with a view to pursuing preparation for the dia-
logue on energy, raw materials, problems of development, including all related
financial questions.
2. The ten delegations confirmed the agreement of their authorities on the
convening of an international conference on these questions. They decided that
the Conference will be called the "Conference on International Economic Co-
operation", that it will lbe held in Paris, that it will be composed of 27 members
designated as indicated below, and that it will be convened at ministerial level
on 16 December 1975 for a session of two or possibly three days. The Secretary-
General of the United Nations will be invited to the Ministerial Conference.

3. The European Economic Community, the United States and Japan, on the
one hand, and the seven developing countries participating in the Preparatory
Meeting (Algeria, Brazil, India. Iran, Saudi Arabia, Venezuela, Zaire), on the
other hand, will assume responsibility for the designation, from among their
respective groups and according to the procedures which the industrialized
cuitintries a nd the (ldeveloping countries respectively, deem appropriate, of five
industrialized countries and twelve developing countries, to be added to the
laesent lpartiripaint s so as to bring to twenty-seven the number of participants in i
thle ('nferente. The French Government will lie notified, within a period which
should i ii t exceed one month, of the list. thus established of the delegations to
it. ivitedi to the Ministerial Conference.
4. TheI teni delegations also decided that the Conference should have two co-
.elia:irilen choi sen resljectively bi each f til the two participating groups frl'iin
aming its members, and that they should preside alternatively over the meetings
illn Ia n:anntr toh le a.gree(l between them. Tile participants inll the Preparatory
Meet-ing reconiimiiend that the two co-chairmen should be designated as soon as
jli-,oi.l after tile lists if 'participi tits in tlie Conference have been completed.
tlil1 they st'est that the t\w',) co-'haiirinlleu .-hsin d lIetgin, immediately after being
ldesig-i:ated. to take togthr all nneces.s.;iry steps. in liiiison with the hos-t country,
tip tlsIrel' Tl:;it tlhe Miniisteriail Conference proceeds satisfactorily.
5. Tie Prepajraat iry Meeting lnproposes to the Ministerial Conference that it set
li1 1 (.' iiitiiissiIlli for enller'gy, I ; I co tlission for raw materials, I COIUlisSiOln fur
(levvelopinment and a commission for finanmciaI affairs. Each of these colhlnissions
s.liiii co0isti is ,f i'reelli linlve'es. ttin of ithemi represenltilng (levelopilng countries
:aid fiIve representing. industrialized coimttties, chos-,en by each of the two groups
ui 1;1r'tiil'-ants illn lie Ci tlereucell ( f!lrom alll lollg its liellt ibIt'is.
6. In determining the coniposition of its relpresentationl in each commission.
each of the two groups at the Conference should choose from among its niembiers
tlvi-'e whi. bet;Lause if their special interest and thle overall significance of Illt'id
larticipatiinl, seemll best suited to take part in order that the work may be
carried out iti an effective and responsible manner.
7. The chairmanship) of each of the commis-ions should be assumed by two
co-chairimen designated by each of the two groups respectively. Joint meetings of
thle co-chairmen of the commissions may be planned if the need arises.
S. The Preparatory Meeting recommLen(ds that the intergovernmental fune-
tionlal irgan.'lizatiozis which are directly concerned with the problems considered,
and which the Mini.-sterial Conference deems to be able to make a useful con-
tributio n to their discussion, bie represented on a permanent basis in the coire-
spondinr connlisionons by observers with the right to speak but without the right
to vote, tndll hence not participating in tlie formation of a consensus. In addition
to the l'nited Nations Secretariat, tile list of these organizations should include,
id111 BRD1). Furl t'ruimore, e(ach conlnlissio iii;imy invite appropriate intergovern-
Intrlitl| fliluictioIai1l orgallizIations to participate as observers ud hocl in the ex-
aiijil;n io of JiiofiitI qruestioins.
). Miliiv.ers of theo ('ollifereice wishing to fillowiv the work of a commission to
iicz iln tlevy fi not leulntig should be uetitli'l tl o lPaIoiint a representative inll the
capacity of aiuditor wvithlnout the right to si'aik.
Ip. 'lu'l act']iitis of in e foutr colninissions whose establishment is recoin-
inenhili' by Hii l'Prnp.ratfiry Meetilig will proceed on the basis of the relevant
Jiei114raii o tlie .iA-le-Mnioire ainmiexed It thie Frncnich Governm11Ient's invilatio'u
to this Meelt ilg. illt (lite light of tlae following clarifincations and interl)retatiins:
(0) It i-4 ulndierstiood that the Con nmissionI on Energy will facilitate all
rarTtgfi.iiimmfs winiu'h Jimay seem advis:mlle' in the field (if energy.
0b) It is 1 1114 lert ,iI inat lie ('ominuiiSsion on Roaw Materials will take into
aouit' f tine inui'gs mnt.adelt in other inlerna:t ilia] forums-I. and will b i e(q-
trinti with faiititarting (lie est:allislhnt i'nt (or reilnfoirce.tnnent, as tlihe case mla
Il.. oIf am'rani'n1gem'nIitts wvuii'hi ltany s'ieemn ai\dvisa.bliet in Iliei' eld i t I raw mnllterials-
ic'lldingI foodlstuiff.s-wvi.hih areit o t 1rli'ir izntttret- to developingll
c i'ill iI ries..
(r) It is nildelti'. ofd inn! thi( ('oinnjiia (n Iii, l(Ii',lu nii it will take intol
:i o ,unl 1-ie iIn-i~nusy ill e'I'tier li .nternm lioinln fr'nrnm' 'nd:nll ll ti e results o ntlll edl,
an.u1d \lil bp emilrnslel will icilila- I inj lie mstanItislinine iw orreiuiforceni itf.
as t imej ni v 1I'e. of ,nant'ns bin ;iiiel('ili 1 li'velopliimt of
deiV (IIiini 1 e'iznfrims?, nun fin' t i.isis uirf imse i'-mijit-r.ItIioU.

(d) It is understood that the Commission on Financial Affairs may dis-
cuss financial issues, including their monetary aspects, of importance to
member countries, while respIecting the jurisdiction of international institu-
tions (IMF, IBRD).
(e) It is understood that the four Cmnin.-sions should function in parallel
and that the results of their work are linked and should be submitted to
the Ministerial Conference.
11. It is agreed that any delegation may raise any subject relevant to the
themes of the dialogue for discussion in the Cominissions.
12. It has been agreed in accordance with Thile relevant paragraplihs of the above-
mentioned Aide-Memoire that the Ministerial C'onferen.e will ie called upon to
set the general guidelines for the work of the Commissions.
13. The Preparatory Meeting recommends to the Ministerial Conference that
the relevant paragraphs of the above-mentioned Aide-Memoire, as interpreted
and clarified above, as well as the above-mentioned principle that any relevant
subject may be raised for discussion in the Commissions, serve as the general
guidelines for the Commissions.
14. Some delegations have already tabled with this Preparatory Meeting docu-
ments proposing subjects to be discussed in the Commissions. The Preparatory
Meeting recommends that the Ministerial Conference agree that these and any
other proposals which may be tabled subsequently in accordance with the general
guidelines be discussed in the Commissions.
15. As regards the practical measures, the Preparatory Meeting recommends
that the Conference adopt English, Arabic, Spanish and French as official lan-
guages and working languages.
16. The Preparatory Meeting recommends that the Conference adopt the Rules
of Procedure which it itself had adopted, and which are based, in particular, on
the principle of "consensus", according to which decisions and recommendations
are adopted when the Chair has established that no member delegation has made
any objection.
17. The Preparatory Meeting considers that the Conference should have an
international secretariat with an exclusively administrative and technical func-
tion, the Ministerial meeting being responsible, on the basis of proposals by the
two co-chairmen, for determining its organization, establishing its operational
procedure and allocating the financial costs in respect of it. It is understood,
however, that pending a decision on the provisions to be adopted for the continua-
tion of the work, the French Government will assume responsibility and provide
the secretariat for the Ministerial meeting scheduled for December 1975, under
the conditions in which these services were provided for the Preparatory Meetinlg.
18. The Preparatory Meeting finally recommends that the Ministerial Confer-
ence decide to meet again at ministerial level in about twelve months' time. One
or several meetings of the Conference at the level of government officials could
possibly be held at least six months after the first meeting of the Conference at
ministerial level.
19. In conclusion, the participants paid tribute to President Giscard d'Estain."
for the initiative taken by him, thanks to which a dialogue was successfully
initiated, and to the French Government for all the efforts it has made towa rds
that end.



1. The Conference on International Economic Cooperation met in Paris at
ministerial level, from December 16 to December 11. Representatives of the
following 27 members of the conference took part : Algeria. Argentina, Australia,
Brazil, Camineroin, Canada's EEC, Egypt, India, Indonesia, Iran, Iraq, Jamaica,
Japlan. Mexico, Nigeria, Pakistan. Peru, Saudi Arabia, Spaint, Sweden, Switzer-
land. United States, Venezuela. Yugoslavia, Zaire. Zambia. The ministerial rep-
resentatives who attended the conference welcomed the presence of the Secretary-
General of the United Nations.
2. The work of the conference was opened by HI.E. The President of the
French Republic. MIr. Valery Giscard D' Estaing.
3. The Honorable Allan J. MacEachen, Secretary of State for External Affairs
of (Canada. and Dir. Manuel Perez-Guerrero, Minister of State for International
Economic Affairs of Venezuela. Co-chairmnen of the Conference an International
Economic Coopjeratiion. presided at the ministerial meeting.
4. The ministerial representatives at tihe Conference expressed their views
with regard to the international economic situation. They made suggestions as to
how the pr(oblelns which they had identified might be resolved. Attention was
drawn to thle pliI.dt of tihe most seriously affected countries. They recognized
that the Comference oii International Economic Cooperation provides a unique
opportunity to address these problems and to further international economic
ctit operation for the benefit of all countries and peoples.
5.. The conference decided to initiate an intensified international dialogue. To
this end, it established four commissions (on energy, raw materials, development.
and financial affairs) which will meet periodically through the coming year. It
was agreed that each of the four commissions would consist of fifteen mnem-i-
hers. ten of them representing developing countries, tive of them representing
indust realized countries.
6. The commission shall start their work on February 11, 1976. Preparation
for tl(e work (if the four commissions shall be reviewed at a meeting of the
,,o-ch:,irmen of the conference and of thle four commissions after consultation
with time other participants in the conference. This meeting will take place on
JanIary 2;, 1971; within the framework of the general guidelines contained in
parmraphrahs 10-14 (if the final declaration of tihe second preparatory meeting
wlitii a re approved by thlie conference.
7. Thle conference, agreed that the following participants should serve on the
Energy: Algeria, Brazil, Canada, Egypt, EEC, India, Iran, Iraq, Jamaica,
Jap;ian, Saudi Araia,i. Switzerland, I'nited States, Venezuela, Zaire.
Raw Manter:ials: Argentina. Australia, Cameroon, EEC, Indonesia. Japan,
M'xic., Nigeria, I'.ru, Spain, IUnited States, Venezuela, Yugoslavia, Zaire,
DIevelopnli t : Algeria, Argentina, ('a mnieroon, Canada, EEC, India. Jamaica,
Japan. Nigeria. Pakistan. Peru, Sweden, United States. Yugoslavia. Zaire.
Finance : Brazil. .EEC, Egypt, India, Indonesia, Iran. Iraq, Japan. Mexico,
Pakistan, Saudi Arabia, Sweden, Switzerland, United States, Zambia.
The Co-Chairmen of lime Commissions will be: Energy: Saudi Arabia and
United States; Raw materials: Japan and Peru; Developlment : Algeria and EEC;
Finance,: EEC and Tran.
Joint meetings of tlie co-chairmen of the conference and of the commissions
ii,:y be held if the need arises.
.s. It was agreed that members of the conference who wish to follow the work of
:1 ,o.Imnmission to which they do not l(elong should bie entitled to appoint a repre-
snt al ivi, i i tlte capacity of auditor without the right to speak.

9. The Conference decided that a number of intergovernmental functional orga-
nizations which are directly concerned with the problems to be considered would
be able to make a useful contribution to their consideration. It therefore invited
these organizations (United Nations Secretariat, OPEC, IEA, UNCTAD, OECD,
FAO, GATT, UNDP, UNIDO, IMF, IBRD, SELA) to be represented on a perma-
nent basis in the relevant Commissions. Their observers will have the right to
speak but not the right to vote and hence will not participate in the formation of a
consensus. Each Commission may, in addition, invite appropriate intergovern-
mental functional organizations to participate as observers ad hoc in the ex-
amination of specific questions.
10. The Conference decided to establish an international secretariat with an
exclusively administrative and technical function on the basis of proposals put
forward by the two co-chairmen. It named Mr. Bernard Guitton as head of the
secretariat and approved plans for its organization and operational procedures.
The financial costs arising from the establishment of the secretariat and from fu-
ture meetings of the Conference will be borne by members of the Conference on
the basis of a formula agreed by the Conference.
11. It was agreed that the four commissions should nimeet in Paris. Subsequent
meetings of the commissions will be convened by their co-chairmen.
12. One or several meetings of the Conference at the level of government
officials may be held at least six months after this ministerial meeting. The minis-
terial conference agreed to meet again at ministerial level in about twelve months
13. The Conference adopted the rules of procedure recommended by the Prepar-
atory Meeting which are based on the principle of consensus, according to which
decisions and recommendations are adopted when the chair has established that
no member delegation has made any objection. English. Arabic, Spanis.l and
French are the official and working languages of the Conference. The rules of
procedure apply to all the bodies of the Conference.
14. The Conference took note of the resolution of the General Assembly en-
titled "Conference on International Economic Cooperation" (Resolution 3515
(XXX)) and agreed to make reports available to the 31st session of the U.N.
General Assembly.
15. The members of the Conference paid special tribute to President Giscard
d'Estaing for the action he had taken to bring about the dialogue which is now
engaged and expressed their warm appreciation to the Government of France
for its hospitality and for the efforts and obligations it had undertaken in order
to make the Ministerial Conference a success. End text of communique.

The Co-Chairmen proposed that the conference:
(1) Agree to the appointment of Mr. Bernard Guitton of France as executive
secretary. The executive secretary will lie charged with the administration of
the Conference and its commissions and to that effect will act on behalf of the
members of the Conference.
(2) Agree that the executive secretary will report to and consult with the
co-chairman of the Conference with respect to the administration of the Confer-
ence and its comnlmis.ions, the recruitment of staff, and expenditures he incurs.
(3) Agree that there should be two deputy executive secretaries, one from a
developed and the other from a developing -member of the Conference.
(4) Authorize the executive secretary to make arrangements for recruiting.
within the limits of the approved budget, a small number of additional profes-
sional staff and appropriate support staff.
(5) Authorize the executive secretary to take whatever action may be required
for the day-to-day nda(minis.tration of the Conference and its commissions.
(6) Agree that the cost of the secretariat and all other costs involved in the
administration of the Conference and its commissions be borne by the members
of the Conference; half of such costs to be met by developed countries and half
by dlevelopin.g countries.
47) Invite the Co-Chairmnen of the Conference to convene a finance and admin-
istration committee of nimmihers of the Conference at an early date. This com-
mittee would receive bifludgetary proposals from the executive secretary and
should approve a budget covering the costs referred to in paragraph 6.
(8) In order to permit the early establishment of the commissions, request the
Government of France to provide, through reimbursable advances, the appropri-
ate financial facilities necessary for the creation and functioning of the secretariat
-pending the effective financial participation of Conference members.


BER 16. 1975

The challenge of our time is to build a stable and just international structure.
This task has two principal dimensionIs. There is thle imperative of peace-the
more traditional problems (iof building security, resolving conflicts, easing ten-
.siris. lThese issues, dominate the ageenila of relations between East and West. No
less urgent is the ieimperative (of justice.-the compelling requirements of global
ec,noi,mic progress and social advance. These a;re now the major issues in the
relhliiltihiip l between North and South. They too, carry tle potential for either
confltlict or order. Neither tihe goal of peace nor tlhiat of social justice can be
a-ili-tved in isolation. We must succeed in both quests or we will succeed in
Sr.ial justice and eclilonic progress are our concerns at this. Conference. We
iiimet here t no laincli the )Dialogile that has been slo often urged, and so long
;iwvaittd. Thle coniveniig of this meeting should itself lie a reason for hope. For
we lwii'ieve it represents a cominitment to tlhe path of conciliation. It demonstrates
a rec.grIitiin tliat (.consumer and producer. industrial and( agricultural, developed
I ill] dtevelloping. rich anid pour, imulist tigethernl address the challenges of the global
T'le i limited States will work with deilication amid energy for a positive outcome.
We will do so ill our ownli self-interest :indl ill the interest of a more just and pros-
pe'ros co(14,null111niity (of nlatioll:n. WVe will d1o oii utmnist to help mobilize the world's
res1,,4u1re's a ld( tlie talents ,ot men and w l 'men everywhere in the service of eco-
noicii~ proigress anil c')iiinioii wellb~eing.
Ini the iv st two, years we have all learned that no nation or group of nations
e. ii .I.v e iis e.olomii"c iproildw'i, inll isoilin0. Inl a world whi(.i is becoming in-
r-i.a...i glv intordepelde('lit, we have xwitnesse'd that iniU:tion ( and recession afleetc
;i ;1ll. We hanve seen that ,no cvntry( c-ili achieve redrtes- by expoirtillg its eco-
liiiic dlifliliesl1 r o yr by ex-ntiig an exorbiii t:t e',.llomi(c Irice from (others.
Buit our dv' cIaIlleiHZe is political. Eom.iilliic di-itret.s naigniilies tie lie prohleils
of g-mvernilllleit li n all our countriess. cl(.iding the lprospeetsi of social peace andl
dlemrocratie inititutions. We have seen tIlt Inational ec,',onomi I problems thus
Ibeiome ilntrilnatillal ; they spawn chishes of interest and proteM.tionist pressures
iOno ,4!n-lilln the filabric t'if collailr.iltiti lieven aniig traldiliml friends. We have
;ill cillioe to illht'rstallid I lit if uinresolv'ed. tile. c'mpeti'g (lnims of developed and
dv'loping. o4.dll e ailill'r nlid pIrmoiu'cer, % ill thwart e anyI effort ti build a stable and
ip!',,', c'..ive iliift' ir1iilm;il sl rii''tizre.
)Ili," fill ili. depe'ds ow olit ,oil] liid eclloilliv flirt.(s it oi4 choices tliat
thi fd'riii'ii 'ike'. 'l'le w ld's i i'fii i iat ilio illl(. sItl'l.ggle' ill lii ,ioiill or ideoilogic'al c',Il-
tntintm--r ltiey 'icn ;icklow~ledgte their iterdt'iet'deii'ii e adl act out of a sinse
il" ciiiii iiiiiiity. lh i' l'lite'l mSt li's lhs cli.'i.l ell tihe pl ll ;iili ol' o1 ii ier.tioll.
'T I 'nieilI Ml;ilnis. ;!s IIlw wild's strllinges t ec'imoliny, ]lhas de imonstrated its
resiliecie,; we ;n i' 1 Iliti roid lo recoivlry. We 'iVtliti, 's, silrvive lilly liew roullilid
l e'it" Buiili .iri'ir,. But it i- ily oN.(. iltIy's iclliviitionii lit tests of streniglhi
1,-Iite.lit,ti l il itll. lhie ap:i 'prilach t'liat we tuook at tle Sevenilh Slie'il ,Sessiuin of
lie 'lnliiil N mliiiiis Giovi;il . posit iveor fill ilrie
'l''' S iie iil S',.'-ioii i'c.:i'r l'u c'inl eii' T-. This o'nilil ii'iit to (, o jiter.'iil l -Il ci I lircoiil u i : lc 'l lin l'k in lli11i1
:lifT:illr- if il .spirit is cirri'il foi-\\ ;ilil. VW e' oi e, oul" [iciiO O litiuIlls, n it slog iM..
S ]I i 11 i' i 1to wollrk. Lit i0 s iiilil'imi'liti llite 11i'.i'e u of (lie Sp'c'ilil Sessioin
:illd i;il*o iit its illllinli iedI li-k 1.4t us iliiake Ili s u:clnfe'relce' :i di( cisive step'-
to\v';i'd n li i"-h'r aiclii vt' i iil.


'We are here because two years ago the international structure was gravely
tested by a crisis inll energy. No problem on the international agenda is more
crucial to the world economy. As this conference demonstrates, it has led us
to a much broader cons-ideration of the ranllge of related issues.
The unprecedented expansion of the global economy in the decades since
World War II relied UIHIm the plentiful suplily of energy at reasonable prices.
It produced economic growth, fostered industrialization and encouraged devel-
opment in every quarter of the globe.
Thus. the energy crisis-caused by a combination of the 1973 embargo and
the fivefold increase in the pice of oil-has dealt a serious blow to global
stability and prosperity.
Inflation. rece.,ssion all(d payilents balances significantly worsened in all the
industrialized world and in those developing nations which had realized sub-
stantial progress toward industrialization. The poorest of the developing coun-
tries, struggling to make modest steps toward progress, were dealt thle cruelest
blow of all. Their hoplies for growth were-and continue to lie-thwarted. Their
development planning has been disrupl)ted. Even their agricultural production
has Ibeen undermined by the increased cost of petrochemical fertilizers. For the
va-t majority of the developing world economic justice was poorly served.
In response to the energy crisis, the United States sought first to reach a
con.-ensus among the industrialized nations. We worked together to assure basic
security against future arbitrary disruptions in oil supply and against potential
oil-induced financial difficulties. We pledged ourselves to long-term COoi)erationll
in energy conservation and the development of alternative energy supplies.
tWe agreed not to resort to protectionist measures, and we began unprecedented
cooperation in our economic policies as dramatized by the recent Economic
Summit at Ramlbouillet.
These actions were not. taken in a spirit of confrontation. Most are prudent
stepl)s of self-protection, which have effect only if a confrontation is provoked
by others. Others involve an urgent program for the development of alternative
sources to the benefit of all.
But. the collaboration of the industrial countries has always been conceived
as only part of a larger program for economic progress. From the beginning,
we have foreseen an effort to develop a constructive dialogue leading to close
and mutually beneficial long-terni economic ties. with oil-producing nations-
so that our investment and technical support would contribute to their develop-
ment, and their prosperity would contribute to the worldwide expansion of
trade and development. We recognize that the only durable basis for constructive
relations is an economic system which fosters the Ipro.perity of all. Each of
us has a stake in the progress of others.
Last April, at the invitation of the President of France, we agreed to begin
this discussion. The industrial nations wanted to foiiu on energy. The oil-
producing and other developing nations wanted to give equal priority to a wide
range of (levelopmnent issues, including prices and markets for other raw mate-
rials, and to international financial questions. The industrial nations regarded
these issues as too varied and complex to 1be addressed effectively in a single
forum. The April Preparatory Conference failed to reconcile these positions.
To demonstrate its desire for a constructive and cooperative solution the
united States worked closely with other participants in developiing a mutually
sat.i factory arrangement: energy, tlie concerns of the less developed countries
about raw materials. development annd related financial matters would be
a(ldressed as part of a discussion of global economic problems, while main-
taining enough distinction between them for a useful dialogue.
The UInited States is committed to a serious and wide-rangin, progrnm of
cooperation with the developing world. My country understand full well, and
has, shown in its many proposals, that, tlk dialoguee must encompIass issues of
concern to all sides-including the needs of the iiany nations not in attendance
here: For us, this clearly requires a (liqcuFsion of the effects of energy prices
on the world economy. For cooperation depends on mutual respect, mutual under-
standing and mutual benefit.
To this end, at the Seventh Special Session of the United Nations General
Assembly three months ago, tlie United Stateq made a series of )proposals in
several areas:
To ensure the economic security of developing countries against short-
falls in export earnings, food shortages, alnd natural disasters;

To accelerate their economic growth by improving their access to capital
ma rkets. technology, and foreign investments;
To better the conditions of trade and investment in key commodities on
which many of their economies are dependent, and to set an example in
the vital area of food;
To improve the world trading system and make it better serve develop-
ment goals and realize through the Multilateral Trade Negotiations a
strengthening of developing country participation ; and
To address the especially urgent needs of the poorest countries devastated
Dy -current economic conditions.
The Seventh Special Session ended on a note of conciliation and cooperation.
TIe spirit of the Session was carried forward to the October Preparatory Con-
ference in lParis where the Declaration laid the basis for our meeting today.
This will blie the attitude of the I'uited States here. Progress has been made in
mIanty areas, and this Conference must move us forward.


The four ('nnCommissions that this Conference is establishing have much work
l,1fore them:
The Commission on Energy should promote an effective world balance
between energy demand and supply. It should work for practical cooperation
amongg industrialized and developing countries to develop new energy sup-
plies. And it should lay the foundations. of a mutually beneficial long-term
relationship between energy producers and consumers.
The Commission on Raw Materials should work to establish the condi-
tions for stable, long-run supplies of raw materials vital to global progress
at prices that are remunerative to producers and fair to consumers.
The Commission on Development should strive to accelerate economic
development in all nations, especially the poorest. Ini particular, it should
bring together industrial nations and oil-wealthy nations to provide financial
sul)pJrt for the development initiatives of the United Nations Special
The Commission on Finance should address financial issues as they relate
to the work of the other three commissions. It should seek to strengthen the
sense of shared financial responsibility for thlie health and growth of the
international economy.
With a cooperative aippJroach, the Commissimons can give direction and impetus
to related activity in other forums and organizations, under whose jurisdiction
a number of these issues fall. They c:in serve as clearin.g- houses for information.
:iidl ,motivate other ,1 doing siniilar wiork. They can identify areas
where* ne(.assary w irk is nit 1bein lone. andul devise new e initiatives where needed.
Tle United States will s liport progress oi a l Ircoid riiige of topics in the (on-
text if tlhe Four (Conunissions. Hut we haave a special interest in the following
a reas:
First. the price oif ,il l-nd( the security vof oil supply as they affect the
international economy ;
Second. tHitie serious balance of payments pr'oliems of developing countries ;
Third. tlie oiditimins of international investmentI :
Fol-thrtill, the issues oif k.ey ,.lcoimJidiities. especially food ;
Fifth. tlhe prulderns of trade. aind
Sixth. thi.he urent iiee'tl of the jiiiirest countries.
LTeu il' discuss e'c'l( of the', in trllnl.

First. LE'nergv,
Tho li j ppliti:titui o(f ..i.n,'e :iiid tec'lnology I nt 1 p tlie vast energy jI tential
imiza'prkiii'd lncratl the e.a rtli. raditiie b Iy thie sln. 11 el,,.Idted by the movement
of wind :iianl \ater ;'cross tthlie' ;rtl'fls siirfic. (" Ior lckeil in i e core of matter. is
firiil:iaieiit;il to It lopb l 'I4s of fm millions to pill h f iIemselves ;ilbove a bare struggle
fil j. i- .,.. 'l,,r lh, ex('Nit.siDm, of then gllanl (.',ti',..y t'r bth developed ii2dl
,lI.'.v]l)iitiiDL unl]pil'i'-; ul i. .l llc'avily olD ouI ll'J i'r s..iisg ;nii dl efid'fiently ex loph'y-
Sii I liD ll' 1 (DneD.y r(soirces.
jl'. j v %%,-,' i '] r I i I ''s gy r(-(), llrt -..
Sllill' ilit i .I ;lre' ;:-rticilnrly v l iido veil ith ilh se 1'.. i rul' .cesi'.. somlie lh ve
tie '.ci'i'ifir l !in ?l te,'liiiloticoil ,Xj 'DriIi,': to ep o 1iI', id ilizi e thiat polel ntiil.
Tll'. iTiir't:itimi, n oil flow oif ,.tirzny, investment 'ipltsil tlre(luired to produce it. miid
i-l,, 1-i. irdNlii('i- frnii, fui.s hav he. o:m1e in ,.ffet ; .-rlol*il energy systfi.m wli'ich


sustains all our economies. Only through international cooperation can all na-
tions benefit from these processes and can the world economy harness its energy
resources most effectively.
The United States is committed to a cooperative approach. We have much to
offer. We have produced more energy than any other nation in the history of
mankind; our energy science and technology are the most advanced, and we
have tremendous potential for future energy development in our country and
abroad. The United States also has much to gain from cooperation. Our energyr
needs are the world's largest, our ability to raise living standards for all our
citizens depends on greater energy production and the more efficient use of
energy resources.
This Dialogue and this Conference have these tasks:
First, it is time to reach a common evaluation of the relationship between
changes in energy prices and the stability and performance of the world
The abrupt and arbitrary increase in the price of oil has been a major factor
in rates of inflation and unemployment unprecedented since the 1930's. It has
led to serious balance of payments deficits, indirectly through global recession
and directly through higher priced imports.
By extraordinary effort, the industrial countries, on the whole, have put their
payments back in balance over the last year, although at a high cost to the well-
being of their peoples. Thus the immediate burden of the massive petrodollar
deficit is now borne largely by the developing countries which have little or no
oil resources.
Developing countries by definition tend to have less of a margin to reduce
consumption, to restructure energy use, or to shift toaltfernative sources, when
the oil price rises. They are the most vulnerable-and the most wounded.
A lower oil price would make possible more rapid economic recovery around
the globe. It would assist the developing countries by easing their enormous
balance of payments burden and their debt burden, and increasing foreign
demand for their exports. A lower price, along with stability of supply, would
also benefit producer nations over the long term by easing the urgency for
consuming countries to develop alternative supply sources.
Conversely, any further increase in prices would seriously hamper economic
recovery, retard international trade, compound the internal difficulties of many
countries, weaken the ability of the advanced nations to assist the developing,
and strain the fabric of international cooperation.
It is time for a serious discussion of this issue. We are prepared to make a
sustained effort to achieve understanding.
Second, we must collaborate to find new sources of energy and intensify our
conservation efforts. All consuming countries, developed and developing, must
use energy more efficiently and develop more abundant supplies. Producers need
to prepare their economies for the day when they will have exhausted their
easily accessible oil reserves.
Individually, the industrialized countries are accelerating the development
of their own energy sources. The United States is developing its conventional
fuels and also new sources, including nuclear power, to replace fossil fuels. We
have committed massive resources to research and devoted our best talents to this
effort; we expect it to result in a substantial increase in U.S. energy production.
In Europe, major efforts have been latinched along the same lines, with the
North Sea as the most dramatic example of the potential. The development of
alternative energy sources is vital.
In the near future, the industrial countries will take the first steps towards
welding these national programs into a coherent cooperative program. These
programs are designed -to promote conservation and to accelerate the development
of alternative energy supplies through large-scale joint projects and cooperation
in research and development. We will demonstrate our commitment to the
maximum development of new energy by a-reeing not to permit imported oil to
be sold in our internal markets below a common minimum safeguard price.
This effort will brings a better balance to the world energy market. But as it
gathers support, it will bring important benefits to developing as well as indqus-
trial countries. The programs that the industrial countries are undertaking, and
those that manv developing countries have within thpir potential to undertake.
can lead to additional and more secure supplies of energy, which can be a spur
to their prosperity and development. All nations will hnvae ancces to a larger

po.,l of energy resources, and there will be less competition for oil. The efforts
of developing countries to increase their own production of energy, if supported,
can lie thle single most important step they take to secure their development
for future generations.
At the Seventh Special Session of the General Assembly, the United States
irolposcud an International Energy Institute. Through such an organization, the
developed countries and O.P.E.C. countries can assist poorer developing nations
to utilize energy more efficiently, increase their own production, and improve
allocation and distribution of existing resources. It could identify current or
lnew energy technologies most relevant to their special needs. The Institute can
help oil-producing countries to improve the ui;e of their own energy.
I iiL tihem' mist advanced techniques of analysis, the Institute could hell) assess
-ill '.tu1trii.s' energy resources and requirements. Staffed by experts drawn fromI
uiiv\eriiient. industry, and academic life in both industrialized and developing
'c.,riritues, it cou!d provide training for local and regional technicians or spe-
ci;ili.-ts in energy problems. It could become a central point of contact where
1,iyiiyakers and experts could exchange ideas on plans and (programs.
We see tihe Institute :is a first bridge between the massive effort the indus-
Sri:iized countries have now launched to develop alternative sources of energy,
iid tolie effort which tlhe developing countries must now undertake.
ii; addition. the initd State.s has suggested a number of other means by
which the talents. and experience of the developed nations, collectively and in-
dividuially, can assist developing states to find and exploit new energy sources
:rild consrerve their national patrimony. We will advance these proposals in the
I:auergy Conmuission. We anticipate a full exchange of views on their scope and
Oil producers, and nations with the technology to help develop oil resources,
.s:,re ;in interest In cooperation on conservation and exploration. But this vo-
,ipe,-itirn will be easier to forge in a stable energy market with a more allpro-
priate structure of energy prices.
Third, the United States seeks a greater participation and contribution of
the oil-producing countries in the international economy. With the extra-
,rdiiir;ry trarisfer of wealth that has taken place, it is the common interest that
tl(;- ,,il-producing n.1tions be constructive members, not challengers, of the world
,.,.,,onoic. syst.remn ; that investment and the latest technology be made available
ti, tl'in on a reimbursable basis for their development programs; and that lthe
flo\- (if goods and services be enhanced between producing and consuming
count ris.
We believe that these three issues-a better understanding of the effects of oil
price increases on the world economy; cooperation on conservation and new
production ; and tlhe orderly integration of OPEC economies into thie global econ-
,iy--are priority tasks for the energy forum.

The balance of payments problems of developing countries are an iimmldi.att'
nud lrrent task for this Conference to address, closely related to the energy
i,-f. 0Current projections indicate that the developing world in 1076 will be
.,lhe.!fivel.v in deficit ly about $35 billion. Bilateral and multilateral aid, along
wit] dirret invest ment, will finance roughly $25 billion of this. The questim is
lieiter Ihorrow virig from i t.nalion'al 'd capital markets can again this year inike
up Ill r, rinindi.ler. If not, some countries will be forced to reduce im)iorts. .iit
li;ur.l'lvelopei t i prratra and furfiher mort gage their future. Tien deficits of
tle rh'v.loiii Lc', c('iuntrnie' this could endanlger liot only their own well-being iblt
i.',th, li '-t:lailhity of flithe international trade and financial system.
.\ IAtil iillid' of idlras and proposals are already before us. Let us address steps
tli:t :,. 'n be taken now.
I'ir-t. flie tme.l'l..'rs of lthe IMF should promptly agree on the details of the ]Filid whiici lie U'nited States has proposed to furnish concessiounal fitinic-
inl'u,. fr ili, poorl'sti coulintris. It would provide these countries additional rn-
s'iirr(s of $1-2 million na year, using tlie profits from TIF gold sales as well as
i:,liii'!|l 'otlrilMiutions,. vWe a r well on Ihe way to resolving outstanding issuw.s
(in IMiF .Ild ,1; l.t us lake final action on thlie Trust Fund in Jalnuary.
Svi.I'ril. lie lnlv 'iihee'rs of the IMP should collmiplete negotfiantions next nViiol l (11on
ie Ilw 1e\ v 1ll'h lr.rinit Secril ty F1cility. Thle U'nited Stales nnd l this 1,:,jlr,
]Pr'IpU%:al to provide noe su11tvantial firmnaiuing to countries facing temporary

shortfalls in export earnings due to the world business cycle or commodity
fluctuations. We proposed this on September 1st; its realization in January
would be an impressive demonstration of international resolve and responsive-
Third, the IMF should approve a one-third increase in member quotas, thus
expanding its potential financing for all members.
Final approval can and must be taken on each of these proposals at the meet-
ing of the IMF Interim Committee in Jamaica in early January. Together with
substantial unused regular drawings still available to developing countries,
these measures will add significantly to the capacity of developing countries
to sustain their needed imports and their development programs.
But however substantial these facilities, they may not be enough. Once the
new Trust Fund and these other proposals have been implemented in January,
we must determine how best to respond to the remaining balance of payments
problems of the developing countries. The United States is committed to finding
a constructive solution.
Our specific response will depend in part on whether there is a general across-
the-board financing problem or one concentrating on a few countries.
One promising approach would be to expand the credit that developing coun-
tries can draw from the IMF by liberalizing the rules governing access to regular
IMF resources. The IMF Board could, for example, increase the size of each
credit drawing, base them on exI)and(led new quotas, or add a new drawing
beyond those now available. Decisions on such proposals will need to be based
on close analysis of their effect on the financial integrity of the IMF. Secretary
Simon will present our analysis and proposals for increased use of the IMF at
the Interim Committee meeting.
We cannot emphasize enough the need for immediate action in this area to
supplement the long-term proposals which have already been made. The respon-
sibility does not lie with the industrialized countries alone. We cannot be ex-
pected to bear the major burdens for remedying balance of payments problems
in which the actions of others play such a significant role. There is a collective
obligation to act. There must be a joint program involving the industrialized as
well as the oil-producing countries.

The balance of payments deficits of the developing countries will perhaps mod-
erate as the global economy recovers from recession. But sustained economic
growth requires the continuous application of capital, technology, and manage-
rnent skills to develop needs.
Private investment has always been a major factor in the growth of the
global economy. My own country has benefited from foreign investment through-
out its history. Today, more than ever, the developing countries need this capital
in addition to the limited supply of official development assistance.
To make this possible, governments of developing countries need better access
to world capital markets. The United States has urged that technical assistance
and expertise be provided to developing countries that are ready to enter long-
term private capital markets for the first time. We have proposed a major expan-
sion of the resources of the World Bank's International Finance Corporation to
strengthen the private sector in developing countries and to enhance their inter-
national competitiveness for private capital. We have recommended creation of
an International Investment Trust to mobilize private portfolio capital for invest-
ment in local enterprises. And we are contributing to the work of the IMF/
World Bank Development Committee to assist in removing impediments to
developing countries' access to capital markets.
But we also believe that one of the most important vehicles for transferring
capital, technology and management skills to where they are most needed is
private enterprise. There simply is not enough governmental capital available.
Because of ideological considerations, these private enterprises operate in an
investment climate increasingly clouded by unpredictable national legislation
and uncertain rules of the game.
In this environment everyl)ody suffers. Host countries are deprived of the
capital resources, technology and management which these enterprises uniQuely
provide, as well, as a source of tax revenue. Home countries are deprived of the
overseas markets, investment income, and the new ideas and techniques which
come with foreign contact. And the enterprises themselves are squeezed at both


ends, making overseas investment less worthwhile for them and reducing their
contribution to home and host country alike and to the global product.
The United States has taken an active part in international efforts to facilitate
international investment on a basis that serves the interests of all parties. We
are willing to explore voluntary guidelines for the behavior of both transnational
enterprises and government. At the United Nations I stated four basic principles
that should be included:
Transnational enterprises must obey local law and refrain from unlaw-
ful intervention in the domestic affairs of host countries.
Host governments must treat these enterprises equitably, without discrimi-
nation among them, and in accordance with international law.
Iorih governments andtl businesses must respect the contractual obligations
they freely undertake.
Principles for transnational enterprises should apply to domestic enter-
pirises where relevant.
But efforts should not be limited to general guidelines for investment. Other
reinedial measures are possible.
Taxation is one such area. Because they operate in multiple jurisdictions,
trzunsnational enterprises may sometimes be subject to either double taxation
,,r inappropriate tax incentives. The result in either case is that investment
patterns are distorted. We must find ways to enable both host and home countries
to coordinate their tax policies and make them inmure equitable to each other and
to productive enterprises.
A second area for improvement is intergovernmental consultation on invest-
ment disputes. This i especially important to developing countries whose prog-
ress is d(-pendent on a climate conducive to an adequate flow of investment. It is
time to develop generally accepted international rules for the settlement of in-
vestment (disputes and the arbitration of differences, and other guidelines for
dealing with problems arising between governments and enterprises. The United
States recommends that the World Bank's International Centre for the Settle-
mient of Investment T)isputes be given a greater role in solving important invest-
went controversies.
International assistance for development must also focus on the advancement.
select ion, and a application of modern technology.
Many countries in the developing world are already on the path of industrial-
ization. They have proved their capacity to take advantage of the vast store-
house of modern technology. The United States encourages this endeavor. We
liave long been in the forefront of the effort to train more managers, technicians.
and researchers in the developing countries to carry this forward.
Most technology transfer takes place through international investment and the
onerations of transnational enterprises on a licensing, equity or contract basis.
The U.S. understands the concern of many developing countries not to become
the repository of obsolescent technology. Technology must be suited to local
ner'd:l. the terms and conditions must hbe mutually acceptable, and it must lie
effectively managed and utilized. Developing countries must be enabled to make
their own informed choices of foreign or domestic technology, to adapt it to
their own needs and conditions, and to manage its application skillfully. This
teehnolngy transfer requires the development of human capabilities-the
management and skills that constitute the infrastructure of technological
People-their training and their placement in a country's managements sys-
ferns-are the key to niakinac technology n Irod(ucing resource. International co-
uprntion can make no greater contrilbutinn to development than to foster the
tr:niinjn of specialists in ahcli country competent to select, bargain for and man-
aire technologies. We ee, this requirement as an important topic for consideration
lv tih Commis.sion on iDevelopment. and we will make concrete proposals. to this
ot Ni .t O!)TTTr~
A li'altliy glolill ,.enmnny rep(iires tl)ht both urodiers and consumers find
iir itcr-tfion against fthlie evle of rnawv materials s irplum, and 4iortage which ehblnke-
grnwth andi disruii.ts inninnr. We mitust ensure more rnlinblo supplies. of vilal
(o'111,m 41dities on fterni, fair Io all.
Tlii' problem is mostt nrt'nt in food. mankind's nimot critical need. ThlP (yclhs
"f ff-'n't nnd fTn minpe. widely flutitlluing nriePs of l',mce fondstiffs., nnd lredicTgwns
in tlie sy stm nf .tornagea nnd tranpqourtm tion cnnilinume to afflict mankind. These


show few signs of abating. And in the long-run, growth in demand for food
threatens to outrun the expansion of supply.
As the world's largest producer and exporter of food, the United States recog-
nizes its special responsibility:
At home, we have been committed to policies of maximum food production
and have removed all production restraints.
Internationally, we have proposed a system of grain reserves to help mod-
erate fluctuations in world prices and supplies.
We believe that our grain reserves proposal can be a model for cooperation
on other commodity problems. It takes into account the interests of producers
and consumers. It makes special provision for the concerns of developing coun-
tries. Its reliance on buffer stocks minimizes the distortion of trade, and
improves the efficiency of the market. We now await the cooperation and com-
mitment of others to help implement this proposal.
Most importantly, we are increasing our assistance to developing countries-
not merely for short-term relief, lut to lielp them boost their own agricultural
production. Our bilateral aid programs in this area have been expanded greatly.
We also strongly support the proposal first made by oil exporting countries for an
International Fund for Agricultural Development. We have announced our will-
ingness to make a contribution of $2 0 million, or one-fifth of the worldwide
goal of $1 billion.
Other commodities are of (critical importance to many countries, either as pro-
ducers or consumers. Many developing countries depend crucially on earnings
from commodity exports to lift their people above subsistence levels, to support
basic social programs, and to finance the beginnings of industrialization. The
solution to commodity issues will affect not only the developing countries, but
also the industrial c,,untrie.--who are in fact the largest producers, consumers
and exporters of commodities. The economies of all countries are affected by the
instabilities of thie market-the vulnerability of agricultural commodities to the
vagaries of weather and shifts in world demand; the sensitivity of agricultural
and mineral markets to fluctuatimns in the business cycle in industrial countries;
and the higher prices of critical energy imports.
At the Seventh Special Session a consensus was achieved that commodity
issues should be approached (cooperatively.
The United States position is that a realistic and constructive approach will
require that we:
Establish producer-consumer forums for discussions of key commodities;
Reduce obstacles to producers' access to markets and to consumers' access
to supplies;
Rely more on buffer stocks, where feasible and necessary, in preference
to restrictions on trade and production ;
Improve the productivity and marketability of agricultural raw materials;
Expand worldwide production capacity in other key commodities.
We now stand ready to (.cooperate in establishing producer-consumer forums
to discuss copper, bauxite, and other commodities. We plan to address the ques-
tion of supply and market access in the multilateral trade negotiations in the
next several months. We have proposed that the IFC and the IBRD make available
increased financing for mineral development and look forward to progress in the
near future. We plan to support the UN revolving fund for national resources
exploration. Finally, we have proposed establishment of an organization to
finance and coordinate research on non-food tropical products to improve their
productivity and competitiveness.
Wre look forward to additional discussion of these measures in thIe Raw Ma-
terials Commission.
An expanding and more open international trading system is a principal factor
in the growth and development of both developed and developing nations. We are
committed to the strengthening of this system so it can better serve the needs of
She international community and include importantly the developing nations.
Trade enables nations to earn their own way. It is the most consistent with
national dignity and with the efficiency of the (conolmic system.
Over the last five years, in a major step of international cooperation., all the
major industrial nations have committed themselves to establish a gt-iieralized
system of tariff preferences, giving developing countries better aev.ces to the
markets of all industrial nations.


The United States will implement its generalized system of preferences In
two weeks time. Under this system we will eliminate duties on 2,724 tariff
items, representing some 19 percent of dutiable non-oil imports from eligible
countries in 1974. This will open upl) significant potential new markets for the
products of developing countries in the United States.
Tropical products are a promising area of export expansion for many de-
veloping countries. The international trading system should encourage this
expansion. In the Multilateral Trade Negotiations in Geneva, work is begin-
ning on a package of tariff concessions on tropical products for early implementa-
tion. We attach much importance to this effort.
Tariff escalation-the process by which tariffs are progressively increased
on goods as they move higher on the ladder of processing-is an obstacle to the
eXlsrts and industrialization of nimany developing countries. At the UN Special
Session, we proposed that reduction, or in some cases elimination, of tariff
escalation be an important goal for the multilateral trade negotiations. The effort
to identify and negotiate specific changes will begin next year.
This effort, however, is related in our view to the issue of access to supply
(if raw materials. Consumers cannot be expected to improve access to their mar-
kets for finished products if they face restrictions on supplies of related raw
materials. Thus, the Geneva negotiations must also improve access to supply
as well as access to markets.
Reducing or eliminating non-tariff barriers to trade is another major task
facing the international trading community. We will make a particular effort
to negotiate special and differential treatment for developing countries in this
An improved and strengthened world trading system would not be complete,
however, if it did not ensure greater sharing by developing countries of both
benefits and responsibilities. Developing countries should gradually take on the
normal obligations of reciprocity and trade rules as they progress.
The multilateral trade negotiations are the most effective forum for pursuing
all these objectives.
The United States put forward proposals in many of these areas at the recent
meeting of the Trade Negotiations Committee in Geneva, as goals for 1976. The
developing countries will also benefit from progress in all other areas of the
negotiations, which we now hope will be completed in 1977.
The United States is committed to a role of leadership in the Multilateral
Trade Negotiations. We will seek rapid progress for the benefit of both de-
veloping and developed countries. I believe that this conference and its relevant
(ominmissions should endorse the work of the MTN. It should provide continued
support for the negotiations by monitoring and contributing ideas to the work
in Geneva.

Our deliberations here must address the plight of the one-quarter of man-
kind whose lives are overwhelmed by poverty and hunger and numbed by in-
sevurity and despair. This group has suffered immeasurably from high prices
(Pof food and fuel. Their export revenues have been seriously undermined by
global recession.
In these regions less than one person in five is literate; one baby in ten
dies in childhood, and in some areas closer to one out of two; life expectancy
is les, lth'n fifty years; and birth rates continue to be intolerably high. Public
expenditures for education and health care are low-and per capital income has
l(een de(Pcliniing for the last four years.
And so today, alongside the Third World with its increasing power and asser-
tiveness, there has come into being a Fourthli World, wliere human beings still
strugIe for bare existence.
In onoe internnitormnl einf(.renne after another, we have all pointed to the
Foanrth World with sincere intentions, of giving imediate help, providing long-
ti'rmi assistance, and ldevising, sitcial arrangement,. We have agreed that this
is a mnjor fetf f a just internaitioimil stIructure. It is time for all of us here
to net on our words.
Three : ;irea is nerd i mrnedii atee action.
First. many (if hi p olre,,rst cannott finnncc hallance of panayment deficits Phe-
(allIlc',i % hey cii ;not gaii in lcss to capital nimrkliet or because of high interest
rate's ol wh'llt little finuii'rf they can ll iltilin. T'lie Truist Fund which the I'united


States proposed in the IMF to provide up to $2 billion for emergency relief is
of special benefit to them. Let us reach a consensus to create this trust fund at
next month's IMF meeting in Jamaica.
The second area for immediate action is food aid. No obligation is more basic
than our ensuring that the poorest are fed. This fiscal year the United States
expects to provide more than six million tons of food aid-or more than 60
per cent of the ten million-ton global target set by the World Food Conference
and a 20 p)er cent increase over last year's contribution. Others must donate their
fair share.
Third, the poorest countries need preferential and expanded access to official
concessionary financial aid. The United States will do its part. More than
70 per cent of our bilateral development assistance now goes to low-income
countries. The concessional financing of the international financial institutions
should also be expanded. At the Seventh Special Session, my government pledged
to support the fifth IDA replenishment and the regional development banks.
We are making every effort to secure Congressional appropriations for funds
already committed. We hope that the traditional and new donors will help the
poorest through financial contributions to both bilateral and multilateral
Let us urgently rededicate ourselves to action on behalf of the poorest among
us. Such action is the responsibility of the entire world community-not just the
industrial countries, but also the more affluent in the developing world. While
no one commission will be dealing with the totality of problems of the Fourth
World each Commission has a responsibility to be conscious of the need for
special consideration for the poorest.

Ladies and Gentlemen, the nations and economies of the world are many; our
differences are great. But our reasons for pulling to-gether are far greater.
Therefore, our dialogue here must be candid but with a positive spirit and
cooperative attitude. The prosperity, the progress and indeed the security of
the world may depend upon whether we succeed in finding realistic answers to
the kinds of problems before us at this conference. For lasting peace around the
globe will depend not only on containing conflict, but on mounting progress. It
requires not merely the preservation of stability, but the fulfillment of human
The issues we face are often technical, but their implications could not be
more profound. They go to the heart of our future. Only rarely in history does
mankind consciously swing out from familiar, well-marked paths to move in new
directions. Only rarely does humanity comprehend as clearly as we do today that
change is imminent and that the direction to be taken is subject to human decision.
The nations of the world face such an opportunity now.
We have the possibility of forging international relationships that will govern
world affairs for the next several decades. We can bring together developed and
developing, producer and consumer, in cornimon endeavors-or, we can go our
separate ways. with every one of us paying the price for a lack of vision in lower
standards of living and increased international tensions. Mutual interest should
brini us. together; only blindness can keep us apart.
The American people have always believed in a world of conciliation rather
than a world ruled by intimidation, pressure or force. My country, in spite of its
own strengths and advantags, has. chosen the path of cooperation. We will
remain committed to that path. But we cannot travel it alone: others will have
to join us. All of us here must base our policies on the reality that we have a
practical and moral stake in each other's well-being.
I am confident of our cooperation and of mour uiiecess. The result will be a fair
and prosperous world economy of benefit to all nations, and with it new hope,
opportunity and justice for all peoples.
Thank you.


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