US Department of State Dispatch Supplement
VOL. 3, NO 5
Title: Group of Seven (G-7) 1992 Economic Summit
PA
Source: Office of Public Communication, Bureau of Public
Affairs
Date: Aug, 15 19928/15/92
Description: Munich, Germany July 6-8, 1992
Category: Speeches, Testimony, Statements
Category: Fact sheets
Category: Policy Briefs (Gist)
Category: Chronologies
Region: Whole World
Country: United States, Germany, Italy, Canada, Japan,
United Kingdom, France
Subject: Trade/Economics, History,
International Organizations, Development/Relief Aid,
North America Free Trade, United Nations,
International Law, Environment, State Department,
Nuclear Nonproliferation, Democratization
[TEXT]
Economic Summit Communique
Issued by the leaders of the Group of Seven (G-7) following the
economic summit, Munich, Germany, July 8, 1992
1. We, the Heads of State and Government of seven major industrial
nations and the president of the Commission of the European
Community, have met in Munich for our eighteenth annual Summit.
2. The international community is at the threshold of a new era,
freed from the burden of the East-West conflict. Rarely have
conditions been so favourable for shaping a permanent peace,
guaranteeing respect for human rights, carrying through the
principles of democracy, ensuring free markets, overcoming poverty
and safeguarding the environment.
3. We are resolved, by taking action in a spirit of partnership, to
seize the unique opportunities now available. While fundamental
change entails risk, we place our trust in the creativity, effort and
dedication of people as the true sources of economic and social
progress. The global dimension of the challenges and the mutual
dependencies call for world-wide cooperation. The close
coordination of our policies as part of this cooperation is now more
important than ever.
World Economy
4. Strong world economic growth is the prerequisite for solving a
variety of challenges we face in the post-Cold War world.
Increasingly, there are signs of global economic recovery. But we
will not take it for granted and will act together to assure the
recovery gathers strength and growth picks up.
5. Too many people are out of work. The potential strength of
people, factories and resources is not being fully employed. We are
particularly concerned about the hardship unemployment creates.
6. Each of us faces somewhat different economic situations. But we
all would gain greatly from stronger, sustainable non-inflationary
growth.
7. Higher growth will help other countries, too. Growth generates
trade. More trade will give a boost to developing nations and to the
new democracies seeking to transform command economies into
productive participants within the global marketplace. Their
economic success is in our common interest.
8. A successful Uruguay Round will be a significant contribution to
the future of the world economy. An early conclusion of the
negotiations will reinforce our economies, promote the process of
reform in Eastern Europe and give new opportunities for the well-
being of other nations, including in particular the developing
countries.
We regret the slow pace of the negotiations since we met in London
last year. But there has been progress in recent months. Therefore
we are convinced that a balanced agreement is within reach.
We welcome the reform of the European Community's [EC] Common
Agricultural Policy which has just been adopted and which should
facilitate the settlement of outstanding issues.
Progress has been made on the issue of internal support in a way
which is consistent with the reform of the Common Agricultural
Policy, on dealing with the volume of subsidised exports and on
avoiding future disputes. These topics require further work. In
addition, parties still have concerns in the areas of market access
and trade in cereal substitutes that they seek to address.
We reaffirm that the negotiations should lead to a globally balanced
result. An accord must create more open markets for goods and
services and will require comparable efforts from all negotiating
partners.
On this basis we expect that an agreement can be reached before the
end of 1992.
9. We are committed, through coordinated and individual actions, to
build confidence for investors, savers, and consumers: confidence
that hard work will lead to a better quality of life; confidence that
investments will be profitable; confidence that savings will be
rewarded and that price stability will not be put at risk.
10. We pledge to adopt policies aimed at creating jobs and growth.
We will seek to take the appropriate steps, recognizing our
individual circumstances, to establish sound macro-economic
policies to spur stronger sustainable growth. With this in mind we
have agreed on the following guidelines:
-- To continue to pursue sound monetary and financial policies to
support the upturn without rekindling inflation;
-- To create the scope for lower interest rates through the
reduction of excessive public deficits and the promotion of savings;
-- To curb excessive public deficits above all by limiting public
spending. Taxpayers' money should be used more economically and
more effectively.
-- To integrate more closely our environmental and growth
objectives, by encouraging market incentives and technological
innovation to promote environmentally sound consumption and
production.
As the risk of inflation recedes as a result of our policies, it will be
increasingly possible for interest rates to come down. This will
help promote new investment and therefore stronger growth and
more jobs.
11. But good macroeconomic policies are not enough. All our econo-
mies are burdened by structural rigidities that constrain our
potential growth rates. We need to encourage competition. We need
to create a more hospitable environment for private initiative. We
need to cut back excess regulation, which suppresses innovation,
enterprise and creativity. We will strengthen employment
opportunities through better training, education, and enhanced
mobility. We will strengthen the basis for long-term growth
through improvements in infrastructure and greater attention to
research and development. We are urging these kinds of reforms for
new democracies in the transition to market economies. We cannot
demand less of ourselves.
12. The coordination of economic and financial policies is a central
element in our common strategy for sustained, non-inflationary
growth. We request our Finance Ministers to strengthen their
cooperation on the basis of our agreed guidelines and to intensify
their work to reduce obstacles to growth and therefore foster
employment. We ask them to report to our meeting in Japan in 1993.
United Nations Conference On Environment and Development
(UNCED)
13. The Earth Summit has been a landmark in heightening the
consciousness of the global environmental challenges, and in giving
new impetus to the process of creating a world-wide partnership on
development and the environment. Rapid and concrete action is
required to follow through on our commitments on climate change,
to protect forests and oceans, to preserve marine resources, and to
maintain biodiversity. We therefore urge all countries, developed
and developing, to direct their policies and resources towards
sustainable development which safeguards the interests of both
present and future generations.
14. To carry forward the momentum of the Rio Conference, we urge
other countries to join us:
-- in seeking to ratify the Climate Change Convention by the end of
1993,
-- in drawing up and publishing national action plans, as foreseen at
UNCED, by the end of 1993,
-- in working to protect species and the habitats on which they
depend,
-- in giving additional financial and technical support to developing
countries for sustainable development through official development
assistance (ODA), in particular by replenishment of IDA
[International Development Association], and for actions of global
benefit through the Global Environment Facility (GEF) with a view to
its being established as a permanent funding mechanism,-- in
establishing at the 1992 UN General Assembly the Sustainable
Development Commission which will have a vital role to play in
monitoring the implementation of Agenda 21,
-- in establishing an international review process for the forest
principles, in an early dialogue, on the basis of the implementation
of these principles, on possible appropriate internationally agreed
arrangements, and in increased international assistance,
-- in further improving monitoring of the global environment,
including through better utilisation of data from satellite and other
earth observation programmes,
-- in the promotion of the development and diffusion of energy and
environment technologies, including proposals for innovative
technology programmes,
-- by ensuring the international conference on straddling fish
stocks and highly migratory fish stocks in the oceans is convened as
soon as possible.
Developing Countries
15. We welcome the economic and political progress which many
developing countries have made, particularly in East and South-East
Asia, but also in Latin America and in some parts of Africa.
However, many countries throughout the world are still struggling
against poverty. Sub-Saharan Africa, above all, gives cause for
concern.
16. We are committed to dialogue and partnership founded on shared
responsibility and a growing consensus on fundamental political and
economic principles. Global challenges such as population growth
and the environment can only be met through cooperative efforts by
all countries. Reforming the economic and social sector of the UN
system will be an important step to this end.
17. We welcome the growing acceptance of the principles of good
governance. Economic and social progress can only be assured if
countries mobilise their own potential, all segments of the
population are involved and human rights are respected. Regional
cooperation among developing countries enhances development and
can contribute to stability, peaceful relations and reduced arms
spending.
18. The industrial countries bear a special responsibility for a
sound global economy. We shall pay regard to the effects of our
policies on the developing countries. We will continue our best
efforts to increase the quantity and quality of official development
assistance in accordance with our commitments. We shall direct
official development assistance more towards the poorest countries.
Poverty, population policy, education, health, the role of women and
the well-being of children merit special attention. We shall support
in particular those countries that undertake credible efforts to help
themselves. The more prosperous developing countries are invited
to contribute to international assistance.
19. We underline the importance for developing countries of trade,
foreign direct investment and an active private sector. Poor
developing countries should be offered technical assistance to
establish a more diversified export base especially in manufactured
goods.
20. Negotiations on a substantial replenishment of IDA funds should
be concluded before the end of 1992. The IMF [International
Monetary Fund] should continue to provide concessional financing to
support the reform programmes for the poorest countries. We call
for an early decision by the IMF on the extension for one year of the
Enhanced Structural Adjustment Facility and for the full
examination of options for the subsequent period, including a
renewal of the facility.
21. We are deeply concerned about the unprecedented drought in
southern Africa. Two thirds of the Drought Appeal target has been
met. But much remains to be done. We call on all countries to
assist.
22. We welcome the progress achieved by many developing countries
in overcoming the debt problems and regaining their
creditworthiness. Initiatives of previous Summits have contributed
to this. Nevertheless, many developing countries are still in a
difficult situation.
23. We confirm the validity of the international debt strategy. We
wel-come the enhanced debt relief extended to the poorest countries
by the Paris Club. We note that the Paris Club has agreed to consider
the stock of debt approach, under certain conditions, after a period
of three or four years, for the poorest countries that are prepared to
adjust, and we encourage it to recognise the special situation of
some highly indebted lower-middle-income countries on a case by
case basis. We attach great importance to the enhanced use of
voluntary debt conversions, including debt conversions for
environmental protection.
Central and Eastern Europe
24. We welcome the progress of the democracies in Central and
Eastern Europe including the Baltic states (CEECs) towards political
and economic reform and integration into the world economy. The
reform must be pursued vigorously. Great efforts and even
sacrifices are still required from their people. They have our
continuing support.
25. We welcome the substantial multilateral and bilateral
assistance in support of reform in the CEECs. Financing provided by
the EBRD [European Bank for Reconstruction and Development] is
playing a useful role. Since 1989, total assistance and
commitments, in the form of grants, loans and credit guarantees by
the Group of 24 and the international financial institutions, amounts
to $52 billion. We call upon the Group of 24 to continue its
coordination activity and to adapt it to the requirements of each
reforming country. We reaffirm our readiness to make fair
contributions.
26. We support the idea of working with Poland to reallocate, on the
basis of existing arrangements, funds from the currency
stabilization fund, upon agreement on an IMF programme, towards
new uses in support of Poland's market reform effort, in particular
by strengthening the competitiveness of Poland's business
enterprises.
27. The industrial countries have granted substantial trade
concessions to the CEECs in order to ensure that their reform
efforts will succeed. But all countries should open their markets
further. The agreements of the EC and EFTA [European Free Trade
Association] countries aiming at the establishment of free trade
areas with these countries are a significant contribution. We shall
continue to offer the CEECs technical assistance in enhancing their
export capacity.
28. We urge all CEECs to develop their economic relations with each
other, with the new independent states of the former Soviet Union
as well as more widely on a market-oriented basis and consistent
with GATT [General Agreement on Tariffs and Trade] principles. As a
step in this direction we welcome the special cooperation among the
CSFR [Czech and Slovak Federal Republics], Poland and Hungary, and
hope that free trade among them will soon be possible.
29. Investment from abroad should be welcomed. It is important for
the development of the full economic potential of the CEECs. We
urge the CEECs to focus their policies on the creation of attractive
and reliable investment conditions for private capital. We are
providing our bilateral credit insurance and guarantee instruments
to promote foreign investment when these conditions, including
servicing of debt, are met. We call upon enterprises in the
industrial countries to avail themselves of investment opportunities
in the CEECs.
New Independent States Of the former Soviet Union
30. The far-reaching changes in the former Soviet Union offer an
historic opportunity to make the world a better place: more secure,
more democratic and more prosperous. Under President Yeltsin's
leadership the Russian government has embarked on a difficult
reform process. We look forward to our meeting with him to discuss
our cooperation in support of these reforms. We are prepared to
work with the leaders of all new States pursuing reforms. The
success is in the interest of the international community.
31. We are aware that the transition will involve painful
adjustments. We offer the new States our help for their self-help.
Our cooperation will be comprehensive and will be tailored to their
reform progress and internationally responsible behaviour, including
further reductions in military spending and fulfillment of
obligations already undertaken.
32. We encourage the new States to adopt sound economic policies,
above all by bringing down budget deficits and inflation. Working
with the IMF can bring experience to this task and lend credibility to
the efforts being made. Macroeconomic stabilisation should not be
delayed. It will only succeed if at the same time the building blocks
of a market economy are also put into place, through privatisation,
land reform, measures to promote investment and competition and
appropriate social safeguards for the population.
33. Creditworthiness and the establishment of a dependable legal
framework are essential if private investors are to be attracted.
The creditworthiness of the new States will in particular be
assessed by the way in which they discharge their financial
obligations.
34. Private capital and entrepreneurial commitment must play a
decisive and increasing part in economic reconstruction. We urge
the new States to develop an efficient private business sector, in
particular the body of small- and medium-sized private companies
which is indispensable for a market economy.
35. Rapid progress is particularly urgent and attainable in two
sectors: agriculture and energy. These sectors are of decisive
importance in improving the supply situation and increasing foreign
exchange revenue. Trade and industry in our countries are prepared
to cooperate. Valuable time has already been lost because barriers
to investment remain in place. For energy, we note the importance
of the European Energy Charter for encouraging production and
ensuring the security of supply. We urge rapid conclusion of the
preparatory work.
36. All Summit participants have shown solidarity in a critical
situation by providing extensive food aid, credits and medical
assistance. They also have committed technical assistance. A broad
inflow of know-how and experience to the new States is needed to
help them realise their own potential. Both private and public
sectors can contribute to this. What is needed most of all is
concrete advice on the spot and practical assistance. The emphasis
should be on projects selected for their value as a model or their
strategic importance for the reform process. Partnerships and
management assistance at corporate level can be particularly
effective.
37. We stress the need for the further opening of international
markets to products from the new States. Most-favoured-nation
treatment should be applied to trade with the new States and
consideration given to further preferential access. The new States
should not impede reconstruction by setting up barriers to trade
between themselves. It is in their own interest to cooperate on
economic and monetary policy.
38. We want to help the new States to preserve their highly-
developed scientific and technological skills and to make use of
them in building up their economies. We call upon industry and
science in the industrial countries to promote cooperation and
exchange with the new States. By establishing International Science
and Technology Centres we are helping to redirect the expertise of
scientists and engineers who have sensitive knowledge in the
manufacture of weapons of mass destruction towards peaceful
purposes. We will continue our efforts to enable highly-qualified
civil scientists to remain in the new States and to promote research
cooperation with Western industrial countries.
39. We welcome the membership of the new States in the
international financial institutions. This will allow them to work
out economic reform programmes in collaboration with these
institutions and on this basis to make use of their substantial
financial resources. Disbursements of these funds should be linked
to progress in implementing reforms.
40. We support the phased strategy of cooperation between the
Russian Government and the IMF. This will allow the IMF to disburse
a first credit tranche in support of the most urgent stabilisation
measures within the next few weeks while continuing to negotiate a
comprehensive reform programme with Russia. This will pave the
way for the full utilisation of the $24 billion support package
announced in April. Out of this, $6 billion earmarked for a rouble
stabilisation fund will be released when the necessary
macroeconomic conditions are in place.
41. We suggest that country consultative groups should be set up for
the new States, when appropriate, in order to foster close
cooperation among the States concerned, international institutions
and partners. The task of these groups would be to encourage
structural reforms and to coordinate technical assistance.
Safety of Nuclear Power Plants In the New Independent States
Of the former Soviet Union and In Central and Eastern Europe
42. While we recognise the important role nuclear power plays in
global energy supplies, the safety of Soviet-design nuclear power
plants gives cause for great concern. Each State, through its safety
authorities and plant operators, is itself responsible for the safety
of its nuclear power plants. The new States concerned of the former
Soviet Union and the countries of Central and Eastern Europe must
give high priority to eliminating this danger. These efforts should
be part of a market-oriented reform of energy policies encouraging
commercial financing for the development of the energy sector.
43. A special effort should be made to improve the safety of these
plants. We offer the States concerned our support within the
framework of a multilateral programme of action. We look to them
to cooperate fully. We call upon other interested States to
contribute as well.
44. The program of action should comprise immediate measures in
the following areas:
-- operational safety improvements;
-- near-term technical improvements to plants based on safety
assessments;
-- enhancing regulatory regimes.
Such measures can achieve early and significant safety gains.
45. In addition, the programme of action is to create the basis for
longer-term safety improvements by the examination of:
-- the scope for replacing less safe plants by the development of
alternative energy sources and the more efficient use of energy,
-- the potential for upgrading plants of more recent design.
Complementary to this, we will pursue the early completion of a
convention on nuclear safety.
46. The programme of action should develop clear priorities, provide
coherence to the measures and ensure their earliest implementation.
To implement the immediate measures, the existing G-24 [Group of
24] coordination mandate on nuclear safety should be extended to the
new States concerned of the former Soviet Union and at the same
time made more effective. We all are prepared to strengthen our
bilateral assistance.
In addition, we support the setting up of a supplementary
multilateral mechanism, as appropriate, to address immediate
operational safety and technical safety improvement measures not
covered by bilateral programmes. We invite the international
community to contribute to the funding. The fund would take
account of bilateral funding, be administered by a steering body of
donors on the basis of consensus, and be coordinated with and
assisted by the G-24 and the EBRD.
47. Decisions on upgrading nuclear power plants of more recent
design will require prior clarification of issues concerning plant
safety, energy policy, alternative energy sources and financing. To
establish a suitable basis on which such decisions can be made, we
consider the following measures necessary:
-- The necessary safety studies should be presented without delay.
-- Together with the competent international organisations, in
particular the IEA [International Energy Agency], the World Bank
should prepare the required energy studies including replacement
sources of energy and the cost implications. Based on these studies
the World Bank and the EBRD should report as expeditiously as
possible on potential financing requirements.
48. We shall review the progress made in this action programme at
our meeting in 1993.
49. We take note of the representations that we received from
various Heads of State or Government and organizations, and we will
study them with interest.
Next Meeting
50. We welcome and have accepted Prime Minister Miyazawa's
invitation to Tokyo in July 1993.
Political Declaration
Issued at the Group of Seven (G-7) economic summit, Munich,
Germany, July 7, 1992
Shaping the New Partnership
I
1. We, the leaders of our seven countries and the representatives of
the European Community, support the democratic revolution which
has ended the East-West confrontation and has fundamentally
changed the global political landscape. Since we last met, further
dramatic changes have accelerated progress towards democracy,
market-based economies, and social justice. The way has been
opened for a new partnership of shared responsibilities, not only in
Europe which at long last is reunited, but also in the Asia-Pacific
region and elsewhere in the world. We are entering an era where
confrontation has given way to cooperation.
2. This new partnership will take many forms. The former
adversaries of East and West will cooperate extensively on
economic, political and security issues. We look for the world-wide
development of similar patterns of cooperation within regions and
between regions. As developed countries, we offer continuing
support and assistance to developing countries. We believe that
transnational problems, in particular the proliferation of weapons of
mass destruction, can be solved only through international
cooperation. Partnership will flourish as common values take root,
based on the principles of political and economic freedom, human
rights, democracy, justice and the rule of law. We believe that
political and economic freedom are closely linked and mutually
reinforcing and that, to that end, good governance and respect for
human rights are important criteria in providing economic
assistance.
3. The countries of Central and Eastern Europe and the new states of
the former Soviet Union can now seize unprecedented opportunities -
- but they also face enormous challenges. We will support them as
they move toward the achievement of democratic societies and
political and economic freedom. We encourage them to create a
stable constitutional and legal framework for their reform
programmes and commend their efforts to cut substantially the
proportion of public spending devoted to the military sector.
4. The treaty signed at Maastricht by the twelve members of the
European Community is a historic step on the way to European Union.
Its implementation will enhance political stability on the European
continent and open up new opportunities for cooperation.
5. Since we last met, the creation of the North Atlantic Cooperation
Council has enhanced the cooperative relationship of the North
Atlantic Alliance with countries in Central and Eastern Europe and
with the states of the former Soviet Union. WEU [Western European
Union], too, is strengthening its relationship with countries in
Central and Eastern Europe.
6. The need for international cooperation has also been underlined
by new instabilities and conflicts due to resurgent nationalism and
interethnic tensions. Communal and territorial disputes are being
settled by force, causing death, destruction, and widespread
dislocation of innocent people throughout the former Yugoslavia, in
parts of the former Soviet Union, and elsewhere in the world.
7. The full and immediate implementation of all CSCE [Conference
on Security and Cooperation in Europe] commitments is essential in
building security and stability in Europe. All CSCE states must solve
their disputes by peaceful means and guarantee the equal treatment
of all minorities. We call upon the Helsinki CSCE Summit to take
decisions to strengthen the CSCE's capabilities for conflict
prevention, crisis management and peaceful resolution of disputes.
We also look forward to the establishment of a security cooperation
forum at the Helsinki Summit. In this regard, we welcome the
recent decisions by NATO foreign ministers and WEU ministers on
support for peacekeeping operations carried out under the
responsibility of the CSCE . We support the development of a regular
and productive dialogue between Japan and the CSCE on matters of
common concern.
8. In the Asia-Pacific region, existing regional frameworks, such as
the ASEAN [Association of South East Asian Nations] Post-
Ministerial Conferences and the Asia-Pacific Economic Cooperation,
have an important part to play in promoting peace and stability. We
are seriously concerned at the present situation in Cambodia and
urge all parties concerned to support UNTAC [UN Transitional
Authority in Cambodia] and uphold the still fragile peace process to
bring it to a successful conclusion.
9. We welcome Russia's commitment to a foreign policy based on
the principle of law and justice. We believe that this represents a
basis for full normalization of the Russian-Japanese relationship
through resolving the territorial issue.
II
1. The end of the East-West confrontation provides a historic
opportunity, but also underlines the urgent need to curb the
proliferation of nuclear weapons, other weapons of mass destruction
and missiles capable of delivering them. We are firmly of the view
that the indefinite extension of the nuclear Non-Proliferation Treaty
[NPT] at the 1995 Review Conference will be a key step in this
process and that the process of nuclear arms control and reduction
must be continued. The motivation for nuclear proliferation will
also be reduced through efforts to advance regional security.
2. We urge countries not yet parties to the NPT to join. We look
forward to the early adherence to the NPT as non-nuclear weapons
states of Ukraine, Kazakhstan and Belarus as well as the other non-
Russian states of the former Soviet Union. We shall continue
through bilateral contacts and the International Science and
Technology Centres in Moscow and Kiev our efforts to inhibit the
spread of expertise on weapons of mass destruction. We attach the
highest importance to the establishment in the former Soviet Union
of effective export controls on nuclear materials, weapons and other
sensitive goods and technologies and will offer training and
practical assistance to help achieve this.
3. The world needs the most effective possible action to safeguard
nuclear materials and to detect and prevent the transfer or the
illicit or clandestine production of nuclear weapons. Nuclear
cooperation will in the future be conditional on adherence to the NPT
or an existing equivalent internationally binding agreement as well
as on the adoption of full-scope International Atomic Energy Agency
[IAEA] safeguards, as recently laid down by the Nuclear Suppliers
Group. The IAEA must receive the resources necessary to strengthen
the existing safeguards regime and to conduct effective special
inspections of undeclared but suspect nuclear sites as one means of
achieving this. We will support reference by the IAEA of unresolved
cases of proliferation to the UN Security Council.
4. We reaffirm our willingness to share the benefits of peaceful
nuclear technology with all other states, in accordance with our
non-proliferation commitments.
5. We will continue to encourage all countries to adopt the
guidelines of the Missile Technology Control Regime [MTCR] and
welcome the recent decision by the plenary session of the MTCR to
extend the scope of the guidelines to cover missiles capable of
delivering all kinds of weapons of mass destruction. Each of us will
continue our efforts to improve transparency and consultation in the
transfer of conventional weapons and to encourage restraint in such
transfers. Provision of full and timely information to the UN Arms
Register is an important element in these efforts.
6. We will continue to intensify our cooperation in the area of
export controls of sensitive items in the appropriate fora to reduce
threats to international security. A major element of this effort is
the informal exchange of information to improve and harmonize
these export controls.
7. Arms control agreements which have been signed by the former
Soviet Union, in particular the START [Strategic Arms Reduction
Treaty] and CFE [Conventional Forces in Europe] treaties, must enter
into force. The full implementation of the CFE Treaty will create
the foundation for the new cooperative security framework in
Europe. We welcome the far-reaching follow-on agreement on
strategic nuclear weapons concluded by the United States and Russia
in June as another major step towards a safer, more stable world.
Further measures, in particular the unilaterally announced
elimination of ground-launched short-range nuclear weapons by the
United States and the former Soviet Union, should be carried out as
soon as possible. We support Russia in its efforts to secure the
peaceful use of nuclear materials resulting from the elimination of
nuclear weapons. The Geneva negotiations for a convention on the
effective global ban on chemical weapons must be successfully
concluded this year. We call on all nations to become original
signatories to this convention.
III
1. The new challenges underline the need for strengthening the
United Nations, taking account of changing international
circumstances. Since our last meeting in London the tasks and
responsibilities of the United Nations have further increased in a
dramatic way, especially in the area of crisis prevention, conflict
management and the protection of minorities. The United Nations
has played a central role in the international response to
developments in the Gulf, in Cambodia, in the former Yugoslavia and
in other regions of the world.
2. We support the UN role in maintaining international peace and
security. The accession to the UN of new states has reinforced the
importance of this role. We call upon all these new member states
to abide by their solemn undertakings to uphold the purposes and
principles of the UN Charter.
3. We reaffirm our commitment to cooperate on existing refugee
problems. We deplore action by any state or group against
minorities that creates new flows of refugees and displaced
persons.
4. We support moves undertaken so far by the Secretary-General to
reform the Organization, including the appointment of a high-ranking
emergency relief coordinator. The Secretary-General's report "An
Agenda for Peace" is a valuable contribution to the work of the
United Nations on preventive diplomacy, peace-making and peace-
keeping. We assure him of our readiness to provide the political
support and resources needed to maintain international peace and
security.
5. We strongly support improved cooperation between the UN and
regional arrangements and agencies as envisaged in Chapter VIII of
the UN Charter, which have an increasing role in solving conflicts.
6. In closing this Declaration, we reaffirm that recognition of the
inherent dignity and of the equal and inalienable rights of all
members of the human family is the foundation of freedom, justice
and peace in the world. Human rights are not at the disposal of
individual states or their governments. They cannot be subordinate
to the rules of any political, ideological or religious system. The
protection and the promotion of human rights remain one of the
principal tasks of the community of nations.
Helmut Kohl: Chairman's Statement
Issued following the Group of Seven (G-7) economic summit, Munich,
Germany, July 8, 1992
Nagorny Karabakh, Moldova, Ossetia
We deplore the continued fighting in Nagorny Karabakh. We urge the
parties to the conflict to cease hostilities immediately and appeal
to them to allow additional measures to be carried out such as troop
disengagement and the return of refugees to their native areas. We
emphasize that we shall on no account recognize faits accomplis
brought about by force. We appeal to all parties to the conflict to
participate in the negotiations in Rome and later in Minsk with a
view to finding a just and lasting political settlement in line with
CSCE [Conference on Security and Cooperation in Europe] principles.
We observe with deep concern the escalation of the conflict on the
left bank of the Dniestr in the Republic of Moldova. We urgently
appeal to all parties concerned to cease hostilities at once and to
refrain from any attacks.
We support the efforts to achieve a peaceful settlement made by the
Presidents of the Republic of Moldova, Romania, the Russian
Federation and Ukraine at the summit meeting of littoral states of
the Black Sea in Istanbul on 25 June 1992, and support their appeal
to the CSCE to help find a solution.
We are pleased to note that the ceasefire in southern Ossetia is
being largely observed and appeal to all parties concerned to do
everything in their power to expedite a peaceful settlement of the
conflict in Georgia. The political leaders in southern and northern
Ossetia are again urged to sign and abide by the ceasefire agreement
negotiated between the Presidents of the Russian Federation and
Georgia. We call upon the parties concerned to quickly bring about a
peaceful settlement of the dispute on the basis of CSCE principles,
and to respect the territorial integrity of the states affected and
the rights of the minority populations living there.
The Baltic States
Equal treatment of all minorities in the Baltic states is a basic
ingredient of peace and stability in the area.
We understand the concern of the Baltic states about the deadlocked
negotiations with Russia on the withdrawal of former Soviet forces.
We are also aware of the practical problems facing Russia in
removing them. However, these problems must not be allowed to
hinder the application of the principle of international law to the
effect that military forces may not be stationed on the territory of
another state without its consent. It is therefore important to
quickly reach agreement in the current negotiations on a timetable
for the withdrawal of the troops.
Middle East
We reaffirm our unqualified support for the Middle East peace
process initiated by the Madrid peace conference. We express the
hope that the direct bilateral negotiations between the parties to
the conflict, as well as the multilateral negotiations on regional
issues, will lead to a just, lasting and comprehensive peace
settlement based on Security Council resolutions 242 and 338.
We welcome the progress made by all five multilateral working
groups at their recent first meetings. These talks are a major part
of the efforts to promote confidence-building between the nations
affected on the road to peace in the Middle East. We appeal to all
sides to create an atmosphere of confidence and trust.
Iraq
We note that Iraq still refuses to comply with all resolutions of the
Security Council without reservation. We shall continue to demand
the elimination of all Iraqi weapons of mass destruction and the
release of all prisoners. We warn the Iraqi regime against
repressive actions against all the peoples of Iraq in violation of UN
Security Council resolution 688.
Iraq must accept the responsibility for the well-being of its
citizens and for the equal treatment of its minorities. It is
essential for Baghdad to comply with Security Council resolutions
706 and 712 so that food and medical supplies can be distributed on
an equitable basis. We condemn any use of force against those who
provide help to the population.
Korea
We welcome the progress achieved in the dialogue between North and
South Korea. It gives us reason to hope for a further reduction of
tension.
We are concerned about North Korea's suspected nuclear weapons
programme. The IAEA [International Atomic Energy Agency]
Safeguards Agreement must be fully implemented and an effective
bilateral inspection regime must be put into practice.
China
The recent developments towards economic reform in the People's
Republic of China are encouraging. We also want to see China making
greater efforts towards political reform. The situation with regard
to human rights calls for considerable further improvement. We
welcome China's accession to the Non-Proliferation Treaty and her
application of the guidelines and parameters of the Missile
Technology Control Regime. We hope that China will play a more
constructive role in the international sphere.
The Mediterranean
We consider it necessary to devote more attention to developments
in the Mediterranean. Our aim must be to launch joint efforts to
enable the countries concerned to develop in a way that will both
maintain peace and security and at the same time promote
understanding of the principles of democracy and ensure greater
respect for human rights.
We support the recent efforts of the Secretary General of the United
Nations to find a solution to the Cyprus conflict. We call on all
sides to cooperate with the Secretary General to seize the present
opportunity to negotiate a settlement to this long-standing and
tragic problem along the lines of Security Council resolution 750.
Africa
In Africa respect for basic human rights, political pluralism and
market economy systems are gaining ground. We will continue to
support this pro-cess of political and economic reform.
Substantial progress towards the complete dismantling of apartheid
in South Africa has been interrupted by another instance of brutal
violence. We call on all sides to resume negotiations as soon as
possible and make greater efforts to prevent violence. We appeal to
all parties concerned to continue through the negotiations on the
path to democracy devoid of racial barriers. Sustainable economic
growth is essential for an enduring solution of South Africa's
problems.
The situation in the Horn of Africa is still alarming. Ethnic strife in
Ethiopia continues even after the controversial elections.
The ending of anarchy, chaos, violence and hunger in Somalia still
depends on the willingness of numerous local groupings to allow the
United Nations, the International Committee of the Red Cross and
other organizations to bring in food and medical supplies for the
people. We welcome and support the UN peace mission for Somalia,
UNOSOM.
Latin America
We appreciate the progress achieved in consolidating democracy and
market economy structures in Latin America.
In this connection we welcome the efforts of the OAS [Organization
of American States]--including sanctions--to secure Haiti's return
to constitutional order. We also look forward to Peru's return to
constitutional order. We welcome the signing of the peace
agreement for El Salvador and the efforts of both parties to
implement it quickly. We encourage efforts in other countries of the
region to settle ongoing conflicts.
There is growing recognition in the region that the mastering of
global challenges such as environmental protection and drug
trafficking, calls for close international cooperation. We are
prepared to participate in and support cooperation in the region. The
growing links between terrorist organizations and drug traffickers
fill us with concern.
The steps Argentina and Brazil have taken to allow full inspection of
their nuclear activities, and their decision to give effect to the
Treaty of Tlatelolco and to consider signing the comprehensive
safeguards agreement with the IAEA, will be conducive to
cooperation in this sphere as well.
Drugs
Through our initiatives of recent years we have considerably
strengthened international cooperation to combat drug trafficking.
Meanwhile well over twenty countries, as well as the European
Community and various international organizations, including the UN
International Drug Control Programme, are involved in the work of
the Financial Action Task Force to investigate the laundering of drug
money, and of the Chemical Action Task Force to prevent chemicals
being diverted to the illicit manufacture of drugs. The fight against
drugs remains a major challenge. In order to meet this challenge
effectively we shall continue our efforts to achieve broad
international cooperation. In this context we attach special
importance to the role of the United Nations, especially its Drug
Control Programme.
Terrorism
We condemn terrorism in all its forms and reaffirm our resolve to
cooperate in combatting it. We call upon all countries involved to
renounce support for terrorism, including financial support, and to
take effective action to deny the use of their territory to terrorist
organizations.
We denounce equally strongly the taking of hostages. We welcome
the recent release of two hostages in Lebanon. We call again for the
immediate and unconditional release of all hostages who may still
be held and for an accounting for all persons taken hos-tage who may
have died while being held.
We underline the need for Libya to comply with [UN] Security Council
Resolutions 731 and 748 promptly and fully. We call upon all
countries to enforce rigorously the sanctions against Libya so that
those responsible for the bombings of PA [Pan Am flight] 103 and
UTA [flight] 772 may be brought to justice and Libya's support for
terrorism is ended.
We support the measures of the International Civil Aviation
Organization aimed at increased security in Civil Aviation. We
consider the Convention on the Marking of Plastic Explosives for the
Purpose of Detection to be a significant step towards this aim.
Communique on the Yugoslav Crisis
Issued at the Group of Seven (G-7) economic summit, Munich,
Germany, July 7, 1992
We, the leaders of our seven countries who represent the European
Community, are deeply concerned about the ongoing Yugoslav crisis.
We strongly condemn the use of violence in the former Yugoslavia
and deplore the suffering inflicted upon its population. We
particularly deplore those actions directed against civilian
populations, as well as the forced expulsion of ethnic groups.
Although all parties have contributed to this state of affairs, the
Serbian leadership and the Yugoslav Army controlled by it bear the
greatest share of the responsibility.
We support the EC Conference on Yugoslavia chaired by Lord
Carrington as the key forum for ensuring a durable and equitable
political solution to the outstanding problems of the former
Yugoslavia, including constitutional arrangements for Bosnia and
Hercegovina.
We call on all parties to resume negotiations in that conference in
good faith and without preconditions. We welcome the close
consultations between the conference chaired by Lord Carrington,
the EC [European Community], the U.N. and the other parties
concerned with the Yugoslav crisis. These consultations could lead
to the holding of a broader international conference to address
unresolved questions, including issues related to minorities. We
stress the absolute need for the parties in former Yugoslavia to
show the will for peace, which is indispensable to success and
without which the peoples of former Yugoslavia will continue to
suffer.
The tragic humanitarian situation, especially in Bosnia and
Hercegovina, is unacceptable. We fully endorse the efforts of the
international community to provide relief. We welcome the efforts
made in achieving the opening of the airport of Sarajevo; and we
support actions taken by UNPROFOR [UN Protective Force] to secure
the airport.
The blockade of Sarajevo must be lifted, and the shelling of the town
stopped in order to sustain a comprehensive relief operation. We
express our gratitude to all participants in the airlift to Sarajevo
and the supply of its population. We appeal to all parties in Bosnia
and Hercegovina not to imperil the humanitarian effort.
We firmly warn the parties concerned, including irregular forces,
not to take any action that would endanger the lives of those
engaged in the relief operation. Should these efforts fail due to an
unwillingness of those concerned to fully cooperate with the United
Nations, we believe the Security Council will have to consider other
measures, not excluding military means, to achieve its humanitarian
objectives.
The airlift to Sarajevo can only be the beginning of a larger
humanitarian effort. Safe access by road to Sarajevo, as well as to
other parts of Bosnia and Hercegovina in need, must be guaranteed.
The needs of the hundreds of thousands of refugees and displaced
persons require further significant financial support. We are willing
to contribute and ask others also to make fair contributions.
We underline the need for Serbia and Croatia to respect the
territorial integrity of Bosnia and Hercegovina and for all military
forces not subject to the authority of the government of Bosnia and
Hercegovina to either be withdrawn or disbanded and disarmed with
their weapons placed under effective international monitoring.
We call on all parties to prevent the conflict from spreading to other
parts of the former Yugoslavia.
We urge the Serbian leadership to respect minority rights in full, to
refrain from further repression in Kosovo, and to engage in serious
dialogue with representatives of Kosovo with a view to defining a
status of autonomy according to the draft convention of the EC
Conference on Yugoslavia.
Sanctions decided by the U.N. Security Council in Resolution 757, as
well as all other provisions of relevant U.N. resolutions, must be
fully implemented. We support the efforts of the U.N. peacekeeping
forces in implementing the U.N. peace plan for Croatia in all its
elements.
We demand that Serbs and Croats extend their full cooperation to the
U.N. peace plan and make every effort to bring the bloodshed in
Croatia to an end.
We do not accept Serbia and Montenegro as the sole successor state
of the former Yugoslavia.
We call for the suspension of the delegation of Yugoslavia in the
proceedings of the CSCE [Conference on Security and Cooperation in
Europe] and other relevant international fora and organizations.
Fact Sheet: Economic Summits 1981-92
Leaders of the Group of Seven (G-7) industrial countries--the United
States, Japan, France, Germany, the United Kingdom, Italy, and
Canada--plus the President of the European Commission, have
discussed and made decisions on a wide range of international
economic and political issues at economic summit meetings that
have been held annually since 1975. The following information
provides background on each of the 12 summits since 1981.
Munich July 6-8, 1992
Summary
Leaders at the Munich summit emphasized the necessity of achieving
stronger world economic growth as a prerequisite for solving the
problems of the post-Cold War era. Concern over lack of progress in
the global trade negotiations, the future of high-risk nuclear
reactors still operating in the former Soviet republics, and the civil
war in the former Yugoslavia dominated the discussions. Russian
President Boris Yeltsin joined G-7 leaders at the close of the
summit to review the pace of reform efforts in his country.
Economic Accomplishments
-- Pledge to work collectively and individually to promote
sustainable world economic growth, encourage investment, and
create new employment opportunities.
-- Support for conclusion of the Uruguay Round of multilateral trade
negotiations by the end of 1992.
-- Call for the new independent states of the former Soviet Union to
continue economic reform policies aimed at building market
economies. Support for financial credits and a debt rescheduling
program for Russia and the creation of consultative groups for
Russia and other new independent states.
-- Pledge to continue efforts to increase the quality and quantity of
official development assistance in accordance with existing
commitments, with emphasis on the poorest countries.
Political Accomplishments
-- Pledge to continue shipments of humanitarian aid to Bosnia-
Hercegovina, combined with support for more vigorous enforcement
of UN Security Council sanctions against Serbia-Montenegro,
including the use of military force if necessary.
-- Agreement on the need to safeguard nuclear materials and to
prevent the transfer or illicit production of nuclear weapons. Call
for a multilateral effort to improve the safety and management of
Soviet-design nuclear power plants.
-- Recognition of the progress of the new states of Central and
Eastern Europe in achieving economic and political reform, and a call
for increased investment by the industrialized countries to
supplement these efforts.
-- Support for the role of the United Nations in maintaining
international peace and security and recognition of the need to
strengthen the conflict prevention and crisis management
capabilities of the Conference on Security and Cooperation in Europe.
-- Call for all countries to carry forward the momentum of the UN
Conference on Environment and Development by publishing national
action plans by the end of 1993, providing additional technical and
financial assistance to developing countries, and implementing
commitments on climate change, protection of forests and oceans,
and preservation of marine resources.
London July 15-17, 1991
Summary
The London summit emphasized the need to strengthen the
international order following the revolutions in Central and Eastern
Europe and the intervention against Iraq in the Gulf. Looking ahead
to the upcoming UN Conference on Environment and Development in
1992, participants pledged support for a variety of initia-tives
designed to integrate environmental considerations into government
policies. A unique feature of the London meeting was the special
invitation to Mikhail Gorbachev to meet at the conclusion of of the
summit with the heads of the G-7 (Group of Seven) industrialized
countries. Talks focused on the economic situation in the Soviet
Union.
Economic Accomplishments
-- Recognition of the successful efforts of the Paris Club to
negotiate debt reduction packages for lower middle-income
countries to improve their potential for economic growth.
-- Commitment to secure stable worldwide energy supplies, remove
barriers to energy trade and investment, encourage high
environmental and safety standards, and promote international
cooperation on research and development in these areas.
-- Agreement on the necessity of enhancing both the quality and
quantity of support for priority development issues, such as
alleviating poverty, improving health education and training, and
providing additional debt relief for the least developed countries.
Political Accomplishments
-- Commitment to continued support for reform efforts in Central
and Eastern Europe and to the integration of these countries into the
international economic system.
-- Commitment to achieve a frame-work convention on climate
change and a preliminary agreement on management, conservation,
and sustainable development of forests before the UN Conference on
Environment and Development in June 1992.
-- Pledge to promote mobilization of financial resources to assist
developing countries with environmental problems, support stronger
international efforts to deal with environmental disasters, and
increase cooperation in environmental science and technology.
Houston July 9-11, 1990
Summary
The Houston summit was held against the backdrop of movement
toward democracy and freer markets in many parts of the world,
including elections in Central and Eastern Europe and Nicaragua,
momentum toward German unification, and political reforms in the
Soviet Union. The summit leaders agreed on most international
economic and political issues, but intense discussions were needed
on agricultural subsidies in the Uruguay Round of multilateral trade
negotiations, economic assistance to the Soviet Union, and global
warming before consensus could be reached.
Economic Accomplishments
-- Agreement on progressive reductions in internal and external
support and protection of agriculture and on a framework for
conducting agricultural negotiations in order to successfully
conclude by December 1990 the Uruguay Round of multilateral trade
talks under the auspices of the General Agreement on Tariffs and
Trade (GATT).
-- Request to the International Monetary Fund (IMF), the World
Bank, the Organization for Economic Cooperation and Development,
and the European Bank for Reconstruction and Development to
undertake, in close coordination with the European Community (EC),
a study of the Soviet economy, to make recommendations, to
establish the criteria under which Western economic assistance
could effectively support Soviet reforms, and to submit a report by
the end of 1990.
-- Support for aid to Central and Eastern European nations that are
firmly committed to political and economic reform, including freer
markets, encouragement of foreign private investment in those
countries and improved markets for their exports by means of trade
and investment agreements.
-- Pledge to begin talks, to be completed by 1992, on a global
forest convention to protect the world's forests.
Political Accomplishments
-- Promotion of democracy throughout the world by assisting in the
drafting of laws, advising in fostering independent media,
establishing training programs, and expanding exchange programs.
-- Endorsement of the maintenance of an effective international
nuclear nonproliferation system, including adoption of safeguards
and nuclear export control measures, and support for a complete ban
on chemical weapons.
Paris July 14-16, 1989
Summary
The Paris summit marked the celebration of the 200th anniversary
of the French Revolution and the Declaration of the Rights of Man. It
also was the first economic summit meeting for President Bush,
who had just returned from trips to Poland and Hungary. These
developments reinforced for the summit leaders the importance of
supporting political and economic reform in Eastern Europe. The
leaders also expressed strong concern about environmental and
narcotics issues; at least one-third of the economic declaration
dealt with the environment.
Economic Accomplishments
-- Agreement on several multilateral trade issues, including a
pledge to make effective use of the GATT dispute settlement
mechanism, to avoid new restrictive trade measures inconsistent
with the GATT, and to make further substantial progress in the
Uruguay Round in order to complete it by the end of 1990.
-- Commitment to a strengthened debt strategy that will rely, on a
case-by-case basis, on such actions as economic reforms by
developing countries, more resources by a financially stronger World
Bank and the IMF, continued debt rescheduling by creditor
governments, and more voluntary, market-based debt reductions by
commercial banks.
-- Continued cooperation in foreign exchange markets.
-- Support for ending as soon as possible and not later than the end
of the century the production and consumption of
chlorofluorocarbons covered by the Montreal Protocol on Substances
that Deplete the Ozone Layer.
-- Commitment to limit the emissions of carbon dioxide and other
greenhouse gases as well as conclusion of an international
framework convention on global climate change.
-- Support for the preservation of tropical forests and
condemnation of the practice of dumping waste in the oceans.
Political Accomplishments
-- Call for a meeting of all interested parties to discuss concerted
assistance to Poland and Hungary and a request that the EC
coordinate these efforts.
-- Support for effective programs to stop illegal drug production
and trafficking, including assistance to the anti-drug efforts of
producing countries and the United Nations, increased international
cooperation to seize drug proceeds and prevent money laundering,
and support for a 1990 interna-
tional conference on cocaine and drug demand reduction.
-- Continued strong condemnation of international terrorism by
states, including hostage taking and attacks against international
civil aviation.
-- Condemnation of political repression in China and agreement to
suspend the shipment of arms and the extension of loans to China.
Toronto June 19-21, 1988
Summary
The summit, one of the most harmonious of the 1980s, marked the
end of the second 7-year cycle of economic meetings. The leaders
expressed satisfaction at their accomplishments in bringing down
inflation in the 1980s and laying the basis for sustained strong
growth and improved productivity. Among still unresolved problems,
they noted the emergence of large payments imbalances among
major countries, greater exchange rate volatility, and continuing
debt service difficulty in developing countries. In response to these
developments, the leaders made further refinements in the
multilateral surveillance system to improve the coordination of
their economic policies. They also committed themselves to further
trade liberalization at the Uruguay Round and offered new initiatives
to relieve the debt burden of the poorest developing countries.
Economic Accomplishments
-- Improvement of the multilateral surveillance system by adding a
commodity price indicator to the existing indicators monitored by
the seven nations, and by integrating national structural policies
into the economic coordination process.
-- Support for efforts at the Uruguay Round to achieve trade
liberalization in all areas including trade in services, intellectual
property rights (such as copyrights and trademarks), and trade-
related investment measures, to strengthen the GATT's surveillance
and enforcement mechanism, and to reduce all direct and indirect
subsidies affecting agricultural trade.
-- Support for a $75-billion general capital increase for the World
Bank to strengthen its capacity to promote adjustment in middle-
income developing countries.
-- Agreement to relieve the debt burdens of the poorest developing
countries, particularly in Sub-Saharan Africa, by urging creditors to
grant partial debt forgiveness, reduced interest rates, and/or
lengthened debt maturities.
-- Support for the ratification of the Montreal agreement on the
ozone layer and the completion of other ongoing negotiations on
emissions and the transport of hazardous wastes.
Political Accomplishments
-- Confirmation of the policy of constructive dialogue and
cooperation between East and West, particularly in the light of
greater freedom and openness in the Soviet Union.
-- Reaffirmation of previous summit agreements to combat
terrorism and support for the policy of no takeoffs for hijacked
aircraft once they have landed.
-- Support for US government initiatives to improve cooperation
against narcotics trafficking.
Venice June 8-10, 1987
Summary
The Venice summit took place against a backdrop of escalating
tension in the Persian Gulf. On the economic front, summit leaders
addressed the continuing issue of how to reconcile domestic
economic policies with the need for a more stable international
monetary, financial, and trading system.
Economic Accomplishments
-- Reaffirmation that further shifts in exchange rates could be
counterproductive.
-- Agreement on the need for effective structural adjustment
policies, especially for creating jobs.
-- Agreement to improve the multilateral trading system under the
GATT and to bring about wider cover-age of world trade under
agreed, effective, and enforceable multilateral discipline.
-- Agreement that the long-term objective in agriculture is to
allow market signals to influence the orientation of production, and
to work in concert to adjust agricultural policies, both domestically
and in the Uruguay Round.
-- Call for newly industrialized countries with rapid growth and
large external surpluses to reduce trade barriers and allow their
currencies more fully to reflect underlying economic conditions.
Political Accomplishments
-- Agreement affirming the principle of freedom of navigation in
the Persian Gulf and the importance of the free flow of oil and other
traffic through the waterway, and supporting the adoption of just
and effective measures by the UN Security Council to resolve the
conflict.
-- Agreement on the need for more effective national efforts and
international coordination to prevent the acquired immune
deficiency syndrome (AIDS) from spreading further.
Tokyo May 4-6, 1986
Summary
The Tokyo meeting, by achieving significant economic and political
declarations, was hailed as one of the most successful economic
summits in recent memory. There was greater specificity about
attempts to increase policy coordination and a decision to begin a
new round of trade talks. On the political side, the joint statement
on terrorism was a landmark achievement. One reason for the
success was that leaders at the Tokyo meeting had considerable
experience dealing with each other at previous summits.
Economic Accomplishments
-- Establishment of new arrangements to assess the consistency and
compatibility of their economic policies, based on economic
indicators, and including enhanced surveillance over exchange rates.
-- Formation of a new Group of 7 (finance ministers of summit
nations) to achieve greater economic policy coordination.
-- Agreement to use the September 1986 GATT ministerial meeting
in Uruguay as a platform for launching the new round of multilateral
trade negotiations and to support an extension of GATT discipline to
new areas such as services, intellectual property, and investment.
-- Recognition of the need to cooperate to redirect agricultural
policies and adjust the structure of agricultural production in light
of world demand.
-- Endorsement of measures to assist Third World development,
including the US initiative to alleviate debtor country problems, in
order to encourage implementation of effective structural
adjustment policies, and increased financial support to the
International Development Association and the IMF.
Political Accomplishments
-- Agreement on a tough statement denouncing international
terrorism, vowing to fight it relentlessly and singling out Libya as a
key target in the fight against terrorism.
-- Call for a new international convention requiring information
exchanges on nuclear accidents and emergencies, in the wake of the
accident at the Chernobyl nuclear power station.
-- Commitment to continued East-West dialogue and negotiation, and
support for a balanced, substantial, and verifiable arms reduction
agreement.
Bonn May 2-4, 1985
Summary
The summit participants undertook to pursue, individually and
cooperatively, policies conducive to sustained growth and higher
employment. Building on common, agreed principles for achieving
these goals, the leaders indicated specific priorities for their own
national policies. The United States asked the Federal Republic of
Germany and Japan to stimulate their economies. The leaders
undertook to seek to make the functioning of the world monetary
system more stable and more effective and discussed ways to reach
more realistic exchange rate relationships.
Economic Accomplishments
-- Agreement to work to strengthen their economies, halt
protectionism, improve international monetary stability, increase
employment, and reduce social inequities.
-- Promise to follow prudent economic policies, including the
exercise of firm control over public spending to reduce budget
deficits.
-- Agreement to give increased impetus to preparations for the
launching of new multilateral trade negotiations under the auspices
of the GATT.
Political Accomplishments
-- Support for the US negotiating position in the arms control talks
with the Soviet Union, which was urged to act positively and
constructively to reach agreement.
-- Commitment to fighting the common threat posed by growing
international drug trafficking and abuse, including the coordination
of legislation to thwart international drug smuggling.
London June 7-9, 1984
Summary
The meeting marked the passage from a period of constructing firm
domestic bases for noninflationary growth to one of enhancing the
openness of international trade and finance. As the previous
Williamsburg summit signaled the beginning of recovery and offered
an outline of future strategies in the international economy, the
London summit gave a clearer focus to future tasks and actions.
There was a strong endorsement of the basic anti-inflationary
stance first advocated by President Reagan at the Ottawa summit in
1981. The political declarations were the cornerstone of the London
summit.
Economic Accomplishments
-- Agreement to continue and strengthen policies to reduce
inflation, interest rates, and budget deficits and to control monetary
growth.
-- Commitment to work toward making their economies more
competitive and flexible to reduce unemployment and develop new
technologies.
-- Agreement to take steps to ease the repayment terms of Third
World debtor countries working to improve their economic
performance.
Political Accomplishments
-- In a 500-word Declaration on Democratic Values, affirmation of
their commitment to a rule of law which respects and protects the
rights and liberties of every citizen and provides a setting in which
the human spirit could develop in freedom and diversity.
-- Determination to pursue the search for extended political
dialogue and long-term cooperation with the Soviet Union and its
allies and endorsement of US willingness to resume nuclear arms
control talks with the Soviet Union.
-- Commitment to consult and cooperate in expelling or excluding
known terrorists from their countries.
-- Hope for a peaceful and honorable settlement to the Iran-Iraq
conflict.
Williamsburg May 28-30, 1983
Summary
The United States hosted a very successful summit as virtually all
President Reagan's economic and political objectives were fulfilled.
As Western economies were beginning to recover, the allied leaders
accepted several US economic policies (e.g., lower taxes, more
emphasis on private sector initiative). The allies acknowledged the
need for united action to bring about domestic and global economic
growth. The joint statement on intermediate-range nuclear forces
(INF) also was an important victory for the United States because it
specifically endorsed the diplomatic and military strategy that the
United States and its NATO allies were pursuing in relation to the
Soviet Union. The introduction of more flexibility and informality
into the proceedings (e.g., fewer previously prepared texts)
contributed to the successful meeting.
Economic Accomplishments
-- Agreement on broad strategies to consolidate domestic and
international economic recovery, including steps to reverse the
trend toward protectionism, promote greater convergence of
economic performance, and encourage the development of new
technologies.
-- Commitment to reduce structural budget deficits by limiting the
growth of expenditures and to pursue appropriate budgetary and
monetary policies to lower interest rates, inflation, and
unemployment.
-- Decision to convene a meeting of finance ministers to review and
improve the operation of the international monetary system.
-- Commitment to energy conservation and the development of
alternative energy sources.
-- Reaffirmation that East-West economic relations should be
compatible with the security interests of the allies.
Political Accomplishments
-- Agreement to achieve lower levels of arms through serious arms
control negotiations with the Soviet Union, and a commitment to
proceed with INF deployment if the negotiations failed to result in
an accord.
Versailles June 4-6, 1982
Summary
The summit was surrounded by contro-versy over the issue (settled
6 months later) of oil pipeline equipment sanctions against the
Soviet Union, including the question of the applicability of US law to
European companies. The leaders agreed to pursue greater
coordination of their economic policies and to seek convergence of
economic performance, at a time of recession in the Western
industrial countries.
Economic Accomplishments
-- Establishment of a multilateral surveillance system to enable
countries to consult on economic policies and seek convergence of
economic performance as the primary vehicle for achieving stable
exchange rates.
-- Agreement to pursue prudent monetary policies and achieve
greater control of budgetary deficits in order to bring down high
interest rates.
-- Prudent use of government export credits to the Soviet Union and
its allies.
-- Efforts to improve the multilateral system controlling the
export of strategic goods to the Soviet Union and its allies.
-- Approval of a preparatory process of negotiations on assistance
to developing countries and development of other forms of practical
cooperation with them.
Political Accomplishments
-- Call for an immediate halt to violence by all parties in Lebanon,
in the wake of the Israeli invasion there.
Ottawa July 19-21, 1981
Summary
This summit was a "get-acquainted" session between President
Reagan and the other allied leaders. The President emphasized his
domestic economic policies to promote sustainable, market-
oriented, and non-inflationary growth. He also called attention to
the potential for erosion of Western security resulting from
excessive dependence on Soviet energy resources (notably natural
gas) and the export of strategic goods to the Soviet Union.
Economic Accomplishments
-- Agreement that the goals of reducing inflation and unemployment
were highest priority and that low and stable monetary growth was
essential to bring down inflation.
-- Commitment to liberal international trade policies and continued
opposition to protectionist pressures.
-- Commitment to accelerated development and use of all energy
sources and encouragement of greater public acceptance of nuclear
energy.
-- Agreement to consult and coordinate economic policies relating
to East-West trade and to ensure that these policies were
compatible with political and security objectives. Agreement on the
need to upgrade existing controls on exports of strategic goods to
the Soviet Union and its allies.
Political Accomplishments
-- Condemnation of the continuing Soviet occupation of Afghanistan.
-- Condemnation of international terrorism.
-- Disapproval of the escalation of tension and the continuing acts
of violence in the Middle East.
Fact Sheet: International Monetary Fund
Background
In July 1944, the UN Monetary and Financial Conference at Bretton
Woods, New Hampshire, created a framework of international
economic cooperation to reverse the protectionist trade policies and
competitive exchange rate devaluations that damaged the world
economy in the 1930s. A key agency in the new arrangement, the
International Monetary Fund (IMF), was established in December
1945, with headquarters in Washington, DC.
One of the chief differences between the IMF and its sister
institution, the World Bank, is that IMF assistance addresses
balance-of-payments problems, while World Bank assistance is
aimed more at promoting economic development.
Membership
The IMF provides a permanent forum for its members to cooperate on
international monetary policies to promote sustainable growth in
the world economy. Formally, it is a UN specialized agency. IMF
membership is a prerequisite to membership in the World Bank, and
the two institutions work together closely. Mongolia and Albania
joined the IMF in 1991. In May and June 1992, Switzerland, Russia,
Armenia, Kyrgyzstan, Estonia, Lithuania, and Latvia became IMF
members. The remaining former Soviet republics (Azerbaijan,
Belarus, Georgia, Kazakhstan, Moldova, Tajik-istan, Turkmenistan,
Ukraine, and Uzbekistan) are expected to join shortly.
Funding
Each member contributes to the IMF's general resources according to
its quota, expressed in Special Drawing Rights (SDRs*), which is
generally based on its relative economic and financial importance in
the world economy. Quotas, in turn, determine IMF voting share and
access to Fund resources.
At its May 1990 meeting, the IMF's interim committee agreed to a
50% increase in quotas to about SDR 136.6 billion. The United States
will retain the largest quota, with about 17.6% of total shares.
Japan and Germany will share second position with about 5.5% each,
and the United Kingdom and France will share the next position with
just under 5% each. Implementation of the quota increase is linked
to ratification by members of an amendment to the Articles of
Agreement to allow suspension of voting and related rights of
members that fail to fulfill their obligations to the Fund.
Operations
The IMF has regulatory, surveillance, and financial functions that
apply equally to all members. It conducts regular reviews of
national economies and the world economy, advises members on
sound economic policies, and seeks to ensure compliance with IMF
rules to eliminate exchange restrictions and maintain orderly
exchange rate arrangements. The Fund cooperates with the World
Bank, particularly in developing comprehensive reform programs for
their poorest members. The IMF also cooperates with the General
Agreement on Tariffs and Trade (GATT) and the Bank for
International Settlements (BIS).
The IMF also provides adjustment assistance to members facing
balance-of-payments difficulties. In response to the developing
country debt crisis in the 1980s, the IMF created new facilities and
medium-term financing arrangements designed to support members'
economic adjustment efforts. IMF programs stress sound fiscal and
monetary policies, appropriate interest and exchange rates, and
reliance on market forces.
Under the strengthened international debt strategy endorsed in
1989, the IMF renewed its efforts to help debtor countries pursue
market-oriented policies by supporting debt and debt-service
reduction operations negotiated between commercial bank creditors
and reforming debtor countries. Particular emphasis has been given
to measures that encourage new foreign investment and the
repatriation of flight capital. To date, nine countries (Mexico,
Philippines, Costa Rica, Chile, Venezuela, Uruguay, Morocco, Nigeria,
and Argentina) have negotiated IMF arrangements with special Fund
resources to support debt and debt- service reduction operations.
Most countries undertake IMF-supported adjustment programs
because they face unsustainable external and internal economic
imbalances and reduced access to international credit. IMF financial
and tech-nical assistance allow adjustment in a more orderly
manner than would be possible otherwise. Economic policy reforms
also improve a member's access to new bank loans and official donor
assistance.
Fund disbursements and commitments increased significantly in
1991 in response to rising demands on IMF resources to support
economic adjustment efforts, and the economic effects of the
Persian Gulf-related increase in oil prices. New loan commitments
rose from $3.1 billion in 1990 to $11.2 billion in 1991. Drawings on
IMF resources totaled $10.1 billion in 1991, compared with $5.8
billion in 1990. The IMF's net outstanding credit also increased over
this period, from $28.2 billion to $32.1 billion. Continuing
adjustment efforts among IMF members, as well as the entry of the
republics of the former Soviet republics, are expected to keep
demand for Fund resources at a high level in coming years.
In response to the financial effects of the Persian Gulf crisis, the
IMF in November 1990 adopted a series of modifications to its
lending policies. These included a temporary provision allowing
members to draw on IMF resources to offset the effects of increased
oil import costs. This provision disbursed more than $3 billion in
timely balance-of-payments assistance to 15 members during 1991.
Arrears to the Fund grew in the 1980s, totaling more than $4.5
billion in late 1990. At its May 1990 session, the interim
committee endorsed a strengthened arrears strategy to reward
sound economic performance and discourage accumulation of arrears.
Under the new approach, an existing arrears country will be able to
earn "rights" toward extraordinary financing to settle its arrears.
These rights are based on sustained economic performance under a
Fund-monitored program. Strengthened remedial measures will
include suspension of voting and representation rights of members
that do not fulfill their Fund obligations.
As of May 1992, the IMF had approved "rights" accumulation
programs for Peru and Sierra Leone (with a program for Zambia
pending), while Honduras, Guyana, and Panama had cleared their IMF
arrears with the help of bilateral support groups. The growth in IMF
arrears has slowed significantly since the initiation of this new
strategy.
Box: US POLICY AND THE IMF
The United States strongly supports the IMF and its central role in
the international financial system. IMF activities complement a key
US foreign policy objective: maintaining a stable, open world trade
and payments system. The IMF is also expected to play a leading role
in promoting market-oriented reforms in the new states of the
former Soviet Union and in Eastern Europe, in addition to assisting
less developed debtor countries in other regions of the globe.
Fact Sheet: World Bank
The World Bank provides advice on long-term finance and policy
issues to developing countries. It promotes economic growth and
works to raise living standards by investing in productive projects
and by prompting the adoption of sustainable economic and financial
policies.
Reducing poverty is the Bank's top priority. Although the Bank
traditionally has financed infrastructure such as roads and power
facilities, it "invests" in people by expanding opportunities for
education, health care, and housing. The World Bank also emphasizes
agriculture and rural development. It provides structural
adjustment loans to help countries reduce obstacles to self-
sustaining growth through market-oriented and institutional
reforms. Its multilateral character and professional expertise put
it in a strong position to advise countries undertaking these
programs. The Bank increasingly is emphasizing environmental
considerations and development of private sector activities in its
programs and projects.
Funding
The World Bank Group comprises four funding institutions:
-- The International Bank for Reconstruction and Development
(IBRD) obtains most of its resources from borrowing in private
capital markets, backed by its member governments' guarantees.
Despite the economic difficulties facing many IBRD borrowers, most
maintain excellent repayment records. The IBRD's superior financial
reputation keeps the cost of borrowing low and, therefore, allows it
to lend on favorable, market-based terms. It regularly earns a profit,
which it uses to improve its financial position and finance new
loans.
-- The International Development Association (IDA) finances most
of its lending operations from direct contributions from developed
country members. In December 1989, donors agreed to a 3-year
replenishment of $14.6 billion. They are negotiating the 10th
replenishment.
-- International Finance Corporation (IFC) funding comes from
members' subscriptions (contributions) and from borrowings. An
increase in the IFC capital base has been approved and is being
ratified by members.
-- The Multilateral Investment Guarantee Agency (MIGA) is funded
from members' subscriptions.
Burden-sharing
The United States is the largest contributor to the World Bank, with
18% of IBRD subscriptions. Most of this is in the form of capital
subject to call only when required to meet the obligations of the
IBRD. Only 3% of the latest US capital subscription requires a direct
budgetary outlay. The IBRD has the added advantage of leveraging
the money actually paid in by borrowing in private capital markets.
Since its founding, the Bank has lent more than $113 for each dollar
of capital paid in by the US Government. The US share of the latest
(9th) IDA replenishment is 21.6%. For each dollar the United States
contributes to the IDA, other countries contribute about four.
US Interest
The US position as a world leader depends on an open and growing
economy based on economic and political freedom. By promoting
open, market-based economic systems, the World Bank has proved to
be a cost-effective instrument for promoting the US interest in
integrating the developing countries into the international trade and
financial system. It reinforces the US aid program by providing
substantial assistance in many countries where the United States
has important political and security interests. The Bank helps to
meet US humanitarian and environmental concerns by assisting in
alleviating poverty, encouraging sound environmental policies, and
rebuilding countries affected by natural disasters. It also serves US
commercial interests by expanding markets for US exports and
financing the purchase of US goods and services.
The Future
As it builds on its traditional strengths in the design and financing
of sound investment projects, the World Bank also must remain
flexible to respond to the changing needs of borrowers. It has
embarked on major assistance programs for Central and East
European countries and the new independent states of the former
Soviet Union. Measures to support economic growth will continue to
be at the center of its lending program. The Bank will be called upon
to promote private sector development, to catalyze capital flows,
and to ensure that all resources are used in an effective and
environmentally sustainable manner.
In 1990, the World Bank launched the Global Environment Facility, in
conjunction with the UN Development Program and the UN
Environment Program. The facility, funded by $1.2 billion in direct
donor contributions, co-financing, parallel finances, and the Bank's
retained earnings, provides grants to developing countries to assist
them in implementing programs that help protect the global
environment.
Box: World Bank Group
International Bank for Reconstruction and Development.
Founded in 1945, the IBRD lends at market-related rates of interest
to countries at more advanced stages of development. In its 1991
fiscal year, the IBRD made loan commitments valued at $16.4 billion
to 42 countries. Cumulative lending at the end of fiscal year (FY)
1991 was $203 billion.
International Development Association.
The IDA was
established in 1960 to provide credits on concessional terms to the
poorest countries, those that cannot afford alternative financing. It
committed $6.3 billion to 44 countries in FY 1991. Total IDA credits
since its founding were $64.5 billion at the end of FY 1991.
International Finance Corporation.
Since its establishment
in 1956, the IFC has sought to mobilize resources for private sector
development. In FY 1991, the IFC invested $1.5 billion in loans and
equity capital to private businesses in 46 developing countries.
Multilateral Investment Guarantee Agency.
The MIGA,
which began operating in June 1988, insures private foreign
investment in developing countries against non-commercial risks
such as expropriation, civil strife, and inconvertibility.
Fact Sheet: European Community
The European Community (EC) is comprised of three separate
communities: the European Coal and Steel Community, established in
1951; the European Atomic Energy Community, and the European
Economic Community, both established in 1957. Since 1978, the
three have been referred to collectively as the EC. The EC has 12
members: Belgium, Denmark, France, Germany, Greece, Ireland, Italy,
Luxembourg, Netherlands, Portugal, Spain, and the UK.
A major goal of the Community is the completion by the end of 1992
of a unified economic area or "single market," with free movement
of persons, goods, services, and capital. In December 1991, at
Maastricht, Netherlands, EC members agreed to amendments of the
EC treaties which will move the Community in the direction of
greater economic, monetary, and political union, including more
unified foreign and security policies. The Maastricht Treaty on
European Union must be approved by all EC countries prior to
implementation. Despite a national referendum in Denmark on June
2, 1992, rejecting the treaty, other EC members are proceeding with
plans to ratify the treaty by the end of 1992.
US-EC Relations
The United States and the EC maintain a continuing dialogue on
political and economic issues of mutual interest and engage in
direct negotiations on trade and investment issues. The European
Community is the United States' largest trading partner. Total US-
EC trade exceeded $190 billion in both 1990 and 1991. In 1991, US
imports from the EC were $86 billion and represented 18% of total
US imports. In 1991, US exports to the EC were $103 billion and
represented 24% of total US exports.
In 1991, the US trade surplus with the European Community rose to
$17 billion, up from $6 billion in 1990. The United States and the
Community are each other's most significant source of direct
investment. By the end of 1990, the Community had $230 billion
invested in the United States, and the United States had about $173
billion invested in the EC.
The United States continues to support the EC's plan to develop an
integrated market by the end of 1992. It is in the interest of both
sides that the program be implemented in an open fashion without
new trade barriers. The United States holds regular meetings with
the Community to discuss various aspects of the 1992 program and
to resolve trade differences, many concerning agriculture. In its
negotiations with the Community on trade and investment issues,
the US Government works to ensure that American interests are not
discriminated against in post-1992 Europe. The global reform of
agricultural policies remains an important US objective and a major
task of the current Uruguay Round of multilateral trade negotiations.
The United States long has discussed foreign and trade policy issues
on an ad hoc basis with the Community. These arrangements were
formalized by the Declaration on US-EC Relations of November 20,
1990, which institutionalized regular consultation and cooperation
on political, economic, scientific, educational, and cultural matters.
As agreed in the declaration, the US President meets twice annually
with the head of state or government of the presidency country and
the president of the EC Commission. The secretary of state meets
twice annually with the EC foreign ministers and as necessary with
the foreign ministers of the "troika" countries (the EC presidency
country, its predecessor, and its successor). The secretary also
meets twice annually, along with some cabinet colleagues, with the
EC Commission. Discussions include a broad range of issues:
maintenance of international peace and security in areas such as the
Gulf, the Middle East, and Central America; the Uruguay Round and
other international trade issues; support for the emerging
democracies of Eurasia; and cooperation in science and technology.
EC Institutions and Presidency
Since July 1967, the three communities have functioned with
common institutions. Major EC institutions are the EC Commission,
the Council of Ministers, the European Parliament, and the Court of
Justice. Member states agree to relinquish a degree of national
sovereignty to EC institutions and to cooperate in the joint
administration of these powers.
The Commission, made up of 17 members appointed by common
agreement of the 12 governments, has primary responsibility for
initiating and implementing EC policy in areas that fall under EC
treaties (for example, the internal market, external trade, and
agricultural policy). The Council of Ministers, representing the
member states, occupies the preeminent position in the current
institutional power balance and decides on the Commission's
proposals. The Parliament, the only EC institution that directly
represents European citizens, has significant power over budgetary
matters and can amend or reject certain legislation approved by the
Council. The Court, which has a role similar to that of the US
Supreme Court, is the final authority on the interpretation of EC
laws.
Each member state serves as President of the Council for 6 months
in rotation. The presidency country presides at all meetings of the
member states and serves as spokesman in dealing with countries on
intergovernmental matters, including efforts to coordinate the
foreign policies of the member states. This foreign policy
coordination process, known as European Political Cooperation, is
one of seeking consensus for joint action by the 12 members on
international political issues, such as the Gulf crisis and refugee
aid, the Middle East peace process, South Africa, Central America,
and the Conference on Security and Cooperation in Europe.
European Integration
The process of European integration was strengthened by the
implementation in 1987 of the Single European Act (SEA), which
increased the scope of the Community's legislative and executive
authority. The SEA endorsed economic and monetary union and
outlined a series of directives necessary to eliminate all physical,
technical, and fiscal barriers to completion of the internal market
by January 1, 1993. It also formalized procedures for cooperation in
the area of foreign policy.
At the landmark Maastricht summit in December 1991, EC members
approved additional proposals which, if ratified by national
parliaments, will forge even closer economic, monetary, and
political ties within the Community. The EC is expected to establish
a single European Central Bank and a single currency (the ECU) by the
end of the decade, although all 12 member countries may not enter
the new arrangements at once. The draft treaty also sets in motion
a further acceleration of political integration, including elements of
a common foreign and security policy.
The question of how fast to proceed with enlargement of the
Community while strengthening EC institutions, (the "widening"
versus "deepening" issue), continues to be a major topic for
discussion among member states. An intergovernmental conference
is scheduled to be held in 1996 to evaluate the progress of economic
and monetary integration and to consider greater coordination of
foreign policy and security matters.
EC Economy
As a result of German unification on October 3, 1990, the population
of the EC is now roughly 345 million. By the end of 1990, it had a
gross domestic product (GDP) of $6 trillion and an average per capita
GDP of $17,400. An important aspect of the EC's economy is its
Common Agricultural Policy, a complicated system of price
supports, subsidies, and protection to European farmers that
consumes more than half the EC budget. EC member states agreed to
an important reform of that policy in May 1992.
The EC is the largest trading entity in the world. In 1990, EC
member country exports were almost $1.4 tril-lion, or about 40% of
total world exports, while EC exports to non-EC countries were $535
billion, or 16% of world exports. Exports within the EC were $836
billion. Germany is the largest exporter in the EC.
Relations With Other Countries
EC countries have long-standing political and economic ties with the
new independent states of Eurasia. The Community has provided
significant economic assistance to the emerging democracies and
has eased access to its markets for them. A new kind of "European
agreement" has been created, which consists of industrial,
technical, and scientific cooperation, financial assistance, and
political dialogue. In December 1991, association agreements were
signed between the EC and Czechoslovakia, Hungary, and Poland.
Talks are underway with Bulgaria and Romania. In 1989, the EC
Commission began coordinating aid from the 24 Organization for
Economic Cooperation and Development countries to Central and
Eastern Europe. The objective is to strengthen the process of
political and economic reform, with emphasis on improving the
private sector. The European Bank for Reconstruction and
Development (in which the United States is an active member) was
established in 1990 to support investment and the development of
market economies in these countries.
In January 1992, the Community announced that it would seek to
negotiate new agreements with the former Soviet republics to
replace the 1989 Trade and Cooperation agreement signed by the EC
and the Soviet Union. On May 11, 1992, the EC signed cooperation
agreements with Albania, Estonia, Latvia, and Lithuania. In April
1992, the EC and the six-country European Free Trade Association
plus Liechtenstein initialed an agreement to broaden their existing
free trade agreement and create a European Economic Area.
The Community has placed priority on improving relations with
developing countries. The Lome Convention, a framework for EC
development cooperation with African, Caribbean, and Pacific
countries, was established in 1975. It now encompasses 69
countries. In 1989, a 10-year agreement was signed to provide aid
to development projects, free access to EC markets for almost all
manufactured imports from those countries, and incentives to
promote European investment in developing countries.
The EC is linked with a number of countries in the Mediterranean by
association agreements which provide duty-free access for
industrial products and direct grants and loans. EC economic ties to
Asia and Latin America usually are bilateral agreements that allow
preferential access and certain kinds of development aid.
Austria, Cyprus, Finland, Malta, Sweden, Switzerland, and Turkey
have applied for membership in the EC.
Fact Sheet: European Bank For Reconstruction and
Development
Designed to create a development bank for the countries of Central
and East-ern Europe, the Articles of Agreement for the European
Bank for Reconstruction and Development (EBRD) were signed on May
29, 1990, in Paris. The EBRD formally came into existence on March
28, 1991, when members repre-senting two-thirds of total capital
subscriptions had deposited their instruments of ratification,
acceptance, or approval. The inaugural meeting of
the Board of Governors took place on April 15, 1991.
Structure
The EBRD's principal decision-making body is the 23-member Board
of Directors, 11 appointed from the European Community (EC) and its
member countries and 12 appointed by non-EC countries. Some
major policy decisions must be referred to the Board of Governors,
comprising the finance ministers or their designates from each of
the member countries.
Jacques Attali, a former adviser to the French President, is the EBRD
President. He is supported by five vice presidents, one of them from
the United States, and staff. The bank's headquarters are in London.
Membership
In its first year of operation, the bank has had to respond to the
breakup of its largest borrowing member, the Soviet Union. All 12
of the former Soviet republics are eligible for EBRD membership, and
11 (Georgia is the exception) have applied for and been accepted as
members by the Board of Governors. Membership for Georgia is
expected in 1992. The Baltic states were admitted to the bank as
separate countries on October 29, 1991. Also in 1992, the bank
must deal with the issues relating to the disintegration of another
borrower, the former Yugoslavian Government.
The bank's other members are: Albania (admitted in 1991),
Australia, Austria, Belgium, Bulgaria, Canada, Cyprus,
Czechoslovakia, Denmark, Egypt, Finland, France, Germany, Greece,
Hungary, Iceland, Ireland, Israel, Italy, Japan, South Korea,
Liechtenstein, Luxembourg, Malta, Mexico, Morocco, Netherlands,
New Zealand, Norway, Poland, Portugal, Romania, Spain, Sweden,
Switzerland, Turkey, United Kingdom, United States, European
Community, and European Investment Bank.
Principal Features
The EBRD was created to promote the development of open, market-
oriented economies and private entrepreneurial initiative and to
support the transition to pluralism and multi-party democracy in the
countries of Central and Eastern Europe and the former Soviet Union.
The EBRD's total capital is set at10 billion European currency units
(ECU), about $12.6 billion, with 30% paid-in and the remainder
subject to call. The bank's capital is denominated in ECU. Capital
subscriptions can be made in ECU, US dollars, or Japanese yen.
With 10% of the bank's capital, the United States is the single
largest shareholder. The EC and its member countries together hold
51% of the EBRD's capital. Japan and the four largest West European
countries each hold 8.52%. The former republics of the Soviet Union
hold 6% and the other Central and East European countries, including
the Baltic states, 6.25%.
Lending operations began in April 1991. In its first 12 months, the
bank made commitments to finance 19 pro-jects worth about $780
million. EBRD expects to lend about $1.2 billion in 1992 and up to $2
billion in 1993.
At least 60% of the EBRD's resources must be devoted to the private
sector, including state-owned firms moving to private ownership
and control. The balance is available for infrastructure and
environmental projects supporting private sector development and
for loans to state-owned enterprises operating competitively. The
EBRD is the only multilateral development bank that specifies
environmental objectives in its charter.
The former USSR agreed to limit its borrowing for an initial 3-year
period to the level of its paid-in capital (about $216 million). After
the dissolution of the USSR, members agreed that the limitation was
no longer appropriate and that the bank should continue to focus on
Central and East Europe, including the Baltic states. Thus, through
the end of 1994, at least 60% (measured annually on a cumulative
basis) of EBRD financing will be provided to Central and East Europe
and the Baltic states. After December 1994, this lending target can
be changed by a vote of two-thirds of the directors.
EBRD's Board of Directors has now approved most of the bank's
regulations, legal agreements, and operating guidelines. These
policies are sound, particularly the bank's financial poli-cies. The
bank's environmental policies and procedures generally mirror the
provisions of the World Bank. In contrast to the World Bank, the
EBRD provisions have no requirements for environmental impact
assessments and public participation.
Gist: GATT and the International Trading System
The General Agreement on Tariffs and Trade (GATT), which entered
into force in 1948, sets rules for international trade and provides a
forum for multilateral trade negotiations. The United States is
among the founding members and is a chief author of the GATT. It
now has 103 members, known as contracting parties, which account
for almost 90% of world trade. An additional 29 countries apply
GATT rules.
International trade has grown dramatically in volume, importance,
and complexity since the inception of the GATT. This growth has
occurred partly as a result of a consensus among GATT members that
the world's economic welfare depends on freer trade, without the
risk of escalating trade restrictions and distortions. Seven rounds
of multilateral negotiations under the GATT have succeeded in
reducing average tariffs in the industrial countries from more than
40% in the early 1950s to less than 5% today.
The 1974-79 Tokyo Round established additional international
agreements (codes) on rules of conduct in non-tariff areas: use of
subsidies and countervailing duties, technical barriers to trade
(standards), import licensing procedures, anti-dumping actions,
government procurement, customs valuation, and trade in bovine
meat, dairy products, and civil aircraft.
Uruguay Round
The eighth and current series of negotiations--the Uruguay Round--
was launched in 1986 in Punta del Este, Uruguay. It is the most
comprehensive round of multilateral trade negotiations ever
attempted. Issues that have been discussed for the first time
include trade in services, foreign investment, and protection of
intellectual property (patents, trademarks, and copyrights). Fifteen
negotiating groups were established to deal with the various issues.
The Uruguay Round originally was scheduled to conclude in Brussels
in December 1990. Although progress was made in many important
areas, critical issues, especially reform in agriculture, remain
unresolved. Therefore, the round was extended to provide more time
to reach a successful conclusion. In December 1991, GATT Secretary
General Arthur Dunkel released a "draft final act" upon which the
current negotiations are based.
US Policy
The top US trade priority is successful conclusion of the Uruguay
Round. Success could result in more than $4 trillion of global
economic expansion during the next 10 years. Failure could result in
an increase in unilateral protectionist measures by many countries.
Increasing protectionism would slow the world's economic growth
and retard the development of Central America and the emerging
democracies.
The United States has made it clear that, at a minimum, it wants
comprehensive reform of agricultural trade with the European
Community; expanded market access for goods and services;
meaningful disciplines in the intellectual property, services, and
investment; and more complete integration of developing countries
into the global trading system.
A top priority for the United States is agreement on new market-
oriented rules to reduce, and ultimately to eliminate, the numerous
government measures which distort world trade in agriculture. The
United States maintains that fundamental agricultural reform can be
achieved only through the negotiation of specific commitments to
reduce barriers to market access, export subsidies, and trade-
distorting internal price supports, and through an agreement to avoid
using sanitary and phytosanitary (plant health) measures to restrict
trade.
The final Uruguay Round package will include agreements in the new
areas of services, trade-related investment measures, and
protection of intellectual property. The US objective in services is
to allow services providers (such as architects) to operate in
foreign markets and compete like local firms. The United States
seeks to eliminate or restrict foreign investment rules which have
trade-distorting effects or which put foreign investors at a
competitive disadvantage with local firms. US goals on intellectual
property include higher standards of protection, effective
enforcement of those standards, and an effective dispute settlement
mechanism.
The Uruguay Round, like previous rounds, includes a challenging set
of negotiations on market access--tariffs and non-tariff measures
restricting trade. The United States has offered to cut its tariffs by
one-third, as called for in the Montreal Protocol. The United States
continues to pursue its proposal to slash tariffs to zero in
important, heavily traded sectors: electronics, pharmaceuticals,
wood products, steel, paper, non-ferrous metals, construction
machinery, medical equipment, fish, and beer and distilled spirits
and to harmonize tariffs at low levels in the chemicals sector.
The United States hopes to gain agreement on improved GATT rules
for tighter discipline on subsidies and trade restrictions for
balance-of-payments reasons, stronger dispute settlement
procedures, and greater commitment by developing countries to
GATT rules. The US Government has pressed its goal of achieving
one set of rules for all GATT members including developing
countries, which now account for more than $500 billion in trade.
US Policy on MFN
The United States grants unconditional most-favored-nation (MFN)
treatment to most of its trading partners by operation of domestic
law. Most countries are entitled to receive MFN treatment from the
United States by virtue of their membership in the GATT. MFN status
also can be required by a bilateral treaty. In some cases, the United
States grants MFN treatment under a bilateral commercial
agreement that can be terminated on short notice under certain
circumstances.
Exports from countries granted MFN treatment are subject to duty at
the lowest available non-preferential rates, i.e., those listed under
"Column I" of the US tariff schedule. Imports from countries
without MFN treatment are assessed substantially higher duties
under "Column II" of the US tariff schedule.
MFN treatment was withdrawn from most communist countries
under the Trade Expansion Act of 1951, which denied MFN treatment
to any country under the control of the "world communist
movement." The Trade Act of 1974 set new conditions for granting
MFN treatment to countries not receiving it on January 3, 1975.
These conditions applied to most communist countries, classified as
non-market economy countries under the act.
First, a non-market economy subject to the 1974 Trade Act must
satisfy, or receive a presidential waiver of, the freedom of
emigration criteria contained in the Jackson-Vanik amendment to
Title IV of that act. The President can grant a waiver of the
application of the freedom of emigration provisions if he determines
that extension of the waiver would substantially promote freedom
of emigration. The President also can find a country in compliance
with the amendment (thus making a waiver unnecessary) by virtue of
its emigration law and practices. The President can withdraw MFN
status at any time if he determines that a country no longer
satisfies the Title IV provisions.
Second, once these conditions have been met or waived, Title IV also
requires conclusion of a bilateral commercial agreement before MFN
status is granted. Among the specific issues that are covered in
such agreements are reciprocal granting of MFN treatment,
safeguards, trade promotion, and adequate protection of intellectual
property rights. These agreements have a renewable term of 3
years.
Bulgaria, China, and Mongolia receive MFN status under Title IV of
the 1974 Trade Act. In April 1992, the President used the authority
granted him by Congress to discontinue application of the Title IV
conditions to Hungary and Czechoslovakia, which retain their
previously granted MFN status.
The United States is working to conclude bilateral trade agreements
with the new independent states of the former Soviet Union. These
agreements are identical to the ones negotiated with the former
USSR (with only technical changes to reflect current reality) and
approved by the US Senate but not by the USSR at the time of its
dissolution on December 25, 1991. The President has recommended
that the Jackson-Vanik amendment be waived for the new
independent states. Armenia, Kazakhstan, Kyrgyzstan, Russia, and
Ukraine had signed agreements as of the end of June 1992. They are
in force with Armenia, Russia, and Ukraine and await ratification in
the other two. Mongolia also has signed an agreement.
MFN status was restored to the three Baltic states, Estonia, Latvia,
and Lithuania, which had declared their independence earlier in
1991.
--------------------------------------------------------------------------
Box: Fundamentals of GATT
-- Most-Favored-Nation (MFN) Status. GATT members must extend
to all other members the most favorable treatment with respect to
tariffs and related matters granted to any trading partner. This non-
discriminatory treatment ensures that any tariff reduction or other
trade concession is automatically extended to all GATT parties,
multiplying its liberalizing effects.
The GATT allows some exceptions, primarily for customs unions
such as the European Community and free-trade areas such as the
US-Canada Free Trade Agreement.
-- National Treatment. GATT members must give imported goods
treatment equal to that accorded domestic goods in domestic
markets. Any restrictions applied to imported products also must
apply to comparable domestic products.
-- Protection Through Tariffs. The GATT generally prohibits
quantitative restrictions or quotas. Instead, contracting parties
should provide protection by means of tariffs, which are transparent
and subject to negotiation in the GATT.
-- Dispute Settlement. Parties can challenge trade actions of
other parties that may be inconsistent with the GATT. GATT
members decide whether to accept by consensus the resulting
findings of a panel of trade experts. The new procedures resulting
from the Uruguay Round negotiations will result in more automatic
and effective resolution of disputes.
--------------------------------------------------------------------
Gist: US Trade Policy
--------------------------------------------------------------------
Graphic: US Merchandise Trade, 1991
Data: US Exports: $421.9 Billion. East Asia NIEs*-14%, European
Community-25%, Canada-20%, Japan-11%, Latin America-11%, Other
Countries-19%, . US Imports: $488.1 billion. East Asia NIEs*-13%,
European community-18%, Canada-19%, Japan-19%, Latin America-
13%, Other Countries-18%,
* Newly industrialized economis: Hong Kong, Singapore, South Korea,
and Taiwan
Source: Department of Commerce.
-----------------------------------------------------------------------
International trade presents challenges and opportunities for the
United States. US policy focuses on promoting free and fair trade
among countries to foster growth internationally and in America.
The complexity of achieving open trade has increased with the
growth of trade in services and intellectual property as well as
trade in goods.
US policy favors free trade because it promotes robust economic
growth by fostering competition and efficient allocation of
resources and, therefore, maximizes worldwide income. As
importers, countries gain cheaper or otherwise unavailable products
and enjoy enhanced competition and effi-ciency in their domestic
markets. As exporters, countries expand markets for their most
competitive and productive industries.
Trade is vital to the US economy. From 1950 to 1990, US real gross
domestic product almost quadrupled, while exports grew sevenfold.
Jobs related to trade grew three time faster than overall job growth
during those 4 decades. In 1991, the United States exported $421
billion and imported $488 billion. The 1991 trade deficit of $66
billion was a significant drop from the record $159 billion in 1987.
The Omnibus Trade and Competitiveness Act of 1988 reinforced the
US emphasis on opening markets and fair trade. Several provisions
aim to open markets through multilateral efforts, such as extending
the President's authority to conclude multilateral trade agreements,
implementing the international harmonized tariff system, and
reducing export control barriers. Extension of "fast-track" authority
agreements concluded by March 1, 1993, underlines the US
commitment to conclude trade negotiations. This "fast-track"
procedure for congressional consideration of the President's
implementing legislation on multilateral or bilateral trade
agreements sets time limits for that consideration, with no
amendments to the agreement allowed.
General Agreement On Tariffs and Trade (GATT)
The GATT has 103 member countries and is the principal
multilateral body on international trade. A tenfold growth in the
volume of international trade and lower import duties in most
industrialized countries since GATT's creation after World War II
illustrate its success. Trade has been the engine of world economic
growth since World War II. US measures have reduced the average
tariff on the its imports from 60% under the Smoot-Hawley Tariff
Act of 1930 (which still governs imports from countries to which
the United States does not grant most-favored-nation treatment) to
3.4% in 1991, including the one-third of US imports that entered
duty-free.
Other industrial countries have made similar reductions. The current
trade negotiations, the Uruguay Round, which began in 1986, are
designed to liberalize trade further. The United States is taking the
lead in extending GATT coverage to new areas, such as services,
intellectual property, and investment. A key US goal in the Uruguay
Round is comprehensive reform of agricultural trade. Other key US
goals are expanded market access for goods and services, greater
discipline over trade-distorting subsidies, protection of intellectual
property rights, and further integration of developing countries into
the global trading system.
Bilateral and Regional Agreements
The United States is negotiating a free trade agreement (FTA) with
Mexico and Canada to form a North American Free Trade Agreement
(NAFTA). This will build upon the US-Canada FTA, which went into
effect in 1989, and will eliminate tariffs between the parties by
1998. The US-Canada FTA also liberalized treatment of services and
investment. A US-Israel FTA went into effect in 1986.
In 1990, President Bush introduced the Enterprise for the Americas
Initiative (EAI) with the goal of establishing a hemisphere-wide
free trade area. Under the initiative, progress has been made to open
markets, reduce barriers to investment flows, reduce official debt,
and strengthen the environment throughout the hemisphere. To date,
31 countries have signed framework agreements that established
trade and investment councils with the United States. The councils
review trade and investment issues of mutual concern.
Agricultural Trade
The United States is the leading exporter of coarse grains and
soybeans and a large supplier of wheat, cotton, meat, and
horticultural products. US farm exports rose from $26.3 billion in
1986 to $38.4 billion in 1991.
A key US goal in the Uruguay Round is to liberalize world farm trade
to boost opportunities for US exporters.
Trade in Services
The role of banking, insurance, telecommunications, transportation,
construction, and other services in the US economy and in
international trade has expanded dramatically over the last 25
years. Services account for about 75% of US gross domestic product
and more than 80% of US jobs. Few international agreements cover
trade in services, and none apply to developing countries with
important services markets. Extending multilateral rules to
liberalize such trade further is another major US goal in the Uruguay
Round.
Intellectual Property and Trade
Products that embody intellectual property (principally films,
music, software, pharmaceuticals, and published works) constitute
the second-largest source of foreign export earnings for the United
States and, as such, are critical to US competitiveness at home and
abroad. Growth in such earnings depends heavily on the ade-quacy
and effectiveness of the legal protection available in foreign
countries for US owners of intellectual property.
The United States is pursuing enhanced international protection for
intellectual property owners through its own series of bilateral
investment agreements (BITs), agreements with the emerging
democracies, the Uruguay Round, and NAFTA.
Trade and LDCs
Trade with developing countries (LDCs) is important to the United
States. US merchandise exports to LDCs were $148 billion or 35% of
the total in 1991. US imports were $185 bil-lion or 38% of total US
imports. The continued openness of US markets enables LDCs to
grow and earn foreign exchange needed to buy US goods and to fulfill
external debt obligations.
Generalized System Of Preferences (GSP)
Since 1976, the US GSP program has assisted economic development
by promoting trade from developing countries by eliminating duties
on a wide range of products imported from designated beneficiary
countries. In 1991, $13.7 billion worth of goods entered the United
States duty free under this program. The Trade and Tariff Act of
1984 extended the GSP until July 1993 and redirected the program
toward poorer LDCs. Consistent with the political and economic
reforms they have undertaken, the emerging democracies of Central
and Eastern Europe and of the former Soviet Union are eligible for
the program. The United States is developing options for GSP
renewal after 1993.
Trade Protection
Protectionist policies are a major impediment to trade. Tariffs are
high in many developing countries. As tariffs in developed countries
have declined, other barriers have arisen. These include quotas;
orderly marketing and export restraint agreements; quality,
environmental, or health standards that are really disguised barriers
to trade; "buy domestic" requirements for government entities;
government subsidies to protect domestic industry; and government
tolerance of private-sector collusion to resist imports.
President Bush has declared that the United States is opposed to
protectionist policies, saying that protection harms US exporting
industries because of higher input prices and retaliation by trading
partners. Protection also is costly to consumers.
Relief From Unfair Trade Practices
US law and the GATT permit remedial action when unfair import
competition harms US producers. Anti-dumping duties can be
imposed if foreign companies sell goods at prices lower than
production costs or home market prices.
Countervailing duties can be used to offset foreign government
subsidies. If US producers prove injury from increased imports,
even if the imports are not the result of unfair practices, US law and
the GATT also permit action to restrain those imports temporarily
while US industry adjusts. Under a revised Title II of the 1974 Trade
Act, the US Government also can provide assistance for people and
industries affected during the adjustment period.
Under Section 301 of the 1988 Trade Act, the US Trade
Representative can take action whenever it is determined that a
foreign trade practice is unjustifiable, unreasonable, or
discriminatory. The United States can suspend or withdraw trade
concessions and impose duties or other import restrictions.
"Special 301" provisions deal explicitly with the protection of
intellectual property rights.
-------------------------------------------------------------------
Box: Composition of US Merchandise Trade With the World,
1991
EXPORTS: $422 billion
Manufactured goods 82%
Machinery 28%
Transport Equipment 16%
Chemicals 10%
Other Manufactures 28%
Agricultural Products 9%
Crude Materials 9%
IMPORTS: $488 billion
Manufactured goods 81%
Machinery 27%
Transport Equipment 16%
Chemicals 5%
Other Manufactures 33%
Agricultural Products 5%
Crude Materials 14%
Source: Department of Commerce
----------------------------------------------------------------------
Gist: US Export Controls Foreign Policy Controls
Foreign Policy Controls
Background
Exports are a vital part of the US economy. They provide jobs and
enable the country to import goods to meet domestic demand. The
United States imposes certain controls, however, to ensure that
exports are consistent with foreign policy. Most controls apply to
sensitive dual-use equipment and technology that could support
activities contrary to US national security and foreign policy
interests. They affect less than 5% of the value of current exports.
The controls relate to specific foreign policy concerns worldwide
and/or to specific countries of concern under the authority of the
1979 Export Administration Act (EAA).
Controls
Terrorism Equipment. Using the authority of EAA Section 6(j), the
Secretary of State has designated Cuba, Iran, Iraq, North Korea,
Libya, and Syria as countries that repeatedly have provided support
for international terrorism. Broad, country-specific export controls
are in place for these countries.
Crime Control Equipment. These controls regulate the export of
crime control and detection instruments, equipment and related
technology to all countries, except to NATO member countries or to
Japan, Australia, and New Zealand. Generally, licenses are issued
unless the United States has human rights concerns about the
government of the importing country or the ultimate consignee.
Regional Stability. Exports of equipment used to manufacture
military arms and equipment and some military transportation
equipment are reviewed to ensure that such exports would not
contribute to the destabilization of the region or country
destination.
Anti-Apartheid. The United States prohibits the export to South
Africa of all military and police equipment, and all items covered by
the UN mandatory arms embargo.
Missile Technology. The United States assists other countries in the
peaceful uses and exploration of space, but seeks to halt the
development of weapons-delivery systems. On a worldwide basis,
the United States controls the export of dual-use equipment and
materials that are commercial in nature which would also be useful
in the development of missile systems.
Chemical/Biological Weapons. Licenses are required worldwide
(except for the NATO members plus Australia, Austria, Ireland,
Japan, New Zealand, and Switzerland) for the export of 50 chemical
precursors and certain equipment useful in the production of
chemical weapons, and to all destinations for the export of a broad
range of bacteria, fungi, protozoa, toxins, viruses, and viroids. All
are prohibited to Iran, Iraq, Libya, and Syria. Licenses are required
to specified regions and states for certain dual-use equipment that
might be relevant to chemical or biological weapons programs.
Nuclear Controls. The United States assists other countries to use
atomic energy for peaceful purposes but also seeks to halt the
spread of nuclear weapons. Thus, the United States controls exports
of goods or technology that, if misused by the recipient country,
could contribute to the production of nuclear explosive devices. The
Atomic Energy Act of 1954, as amended by the 1978 Nuclear Non-
Proliferation Act, established the controls. Before permitting an
export, the US Government reviews the proposed use of the item,
whether the government of the purchasing country has signed the
nuclear Non-Proliferation Treaty, and whether the United States has
acceptable assurances that the item or nuclear material produced
from it will not be diverted to develop nuclear weapons.
Short Supply. Controls occasion-ally are necessary to protect the
domestic economy from an excessive drain on scarce materials.
Congress has legislated restrictions on the export of crude oil,
unprocessed Western red cedar logs, and horses for export by sea (to
prevent unauthorized slaughter abroad).
Supercomputers. For foreign policy reasons, the United States
requires the licensing of supercomputer exports worldwide, except
to Canada and Japan.
Treasury Department Controls
The Treasury Department controls US trade and financial
transactions with Cuba, Iraq, North Korea, Libya, Vietnam, and
Serbia-Montenegro. It also controls transactions with Haiti and
regulates certain imports from Iran. Certain exceptions to these
controls are granted under general or specific licenses issued by the
Treasury Department Office of Foreign