Trade Group Agrees to Set Up New Talks

Ranking Cabinet ministers of the 24-nation Organization for Economic Cooperation and Development agreed unanimously here Friday to start working on preparations for a new round of international trade talks before the end of summer and to follow this with the opening of negotiations “as soon as possible” in 1986.

At the same time, U.S. Treasury Secretary James A. Baker III surprised the group’s annual ministerial meeting by announcing that the United States is ready “to consider the possible value of hosting a high-level meeting of the major industrial countries” to discuss “pragmatic steps to strengthen the current international monetary system.”

Baker’s announcement was a response to pressures from several European nations led by the French.

France and most of the other countries in the European Economic Community have been seeking monetary reform talks as a kind of quid pro quo for agreeing to the trade talks, which were the Reagan Administration’s major objective at this meeting. No action was taken by the OECD on Baker’s announcement, but it served the tactical purpose of defusing the issue by making it clear that the United States is ready to talk about both matters.

French Finance Minister Pierre Beregovoy praised Baker’s move, declaring that “France has pressed for a special International Monetary Fund committee meeting to consider the monetary reform dossier, and I rejoice at the positive attitude taken on the subject by Mr. Baker.”

West German Support

West German Economics Minister Martin Bangemann said: “It is not sufficient to solve the trade problems if you do not also tackle the problems of finance, capital and the exchange system. This viewpoint is justified, and I find it very constructive that it has been taken up by the American proposal.”

In making his suggestion, Baker went out of his way to emphasize that the monetary talks “would not in any way be linked to negotiations to liberalize the international trading system.”

Pointing out that technical studies on the workings of the monetary system are already nearing conclusion within the International Monetary Fund, he said that “we should move quickly and independently to assure that trade liberalization is not left behind.”

And he emphasized that his proposal for a special high-level monetary conference is designed to build on the IMF studies and “not in any way detract from the IMF central role.”

The OECD agreement to go ahead now on a new round of trade talks, while leaving the U.S. proposal for monetary talks for a later decision, effectively finesses the “linkage issue.”

Expressing his satisfaction at the outcome of the meeting, Baker said: “We have a clear commitment by all ministers to support a new trade round as soon as possible. That’s important as we go back to fight protectionist sentiment, whether it is in Congress or elsewhere. That’s what they gave us here.”

Baker acknowledged that the commitment on a date for the opening of the new trade round was not as precise as the United States would have liked, but he said that the main point is the commitment to start the process before the end of the summer.