Shultz Outlines Global Growth Program

Secretary of State George P. Shultz outlined Friday a broad program for global economic growth to Southeast Asian leaders increasingly worried about the prospect of protectionism in the developed world.

Addressing the foreign ministers of the Assn. of Southeast Asian Nations, Shultz called on all countries to carry out policies that will require “sometimes painful political decisions.”

He also announced guarded U.S. support for the ASEAN initiative for indirect talks on a political settlement for Cambodia, a proposal hobbled by confusion in the final days of the ASEAN foreign ministers’ meeting here.

U.S. Spending, Trade

The economic “program of action” covered five main points:

--The United States “must, and will” reduce federal spending and the deficit, and reform the tax system, with the result of helping bring down international interest rates. “This will help correct our excessive trade imbalance, itself becoming a major engine of protectionist sentiment,” Shultz said.

--The West Europeans must restructure their economies, eliminating “rigidities” in the labor market and other areas to promote expansion.

--Japan should continue to open its markets and take other measures to reduce its trade surplus.

--Developing nations should promote political and economic stability, particularly those facing heavy foreign indebtedness.

--All nations should support efforts for a new round of tariff talks under the General Agreement on Tariffs and Trade next year. “. . . We have a solemn obligation to resist the temptations of protectionism,” Shultz said.

Japanese Market

After his address, Shultz held meetings with Foreign Ministers Siddhi Savetsila of Thailand and Shintaro Abe of Japan.

Abe outlined areas--a table of contents, a senior U.S. official said--that Japan will address in its second disclosure of new market-opening measures expected later this month. The measures announced in June dealt largely with tariff cuts. The second round will concern areas considered non-tariff impediments to trade, the U.S. official said.

On the Cambodian issue, Shultz said that ASEAN’s call for indirect, or proximity, talks between Vietnam and the Cambodian resistance front is laudable.

“ASEAN is leaving no stone unturned in the quest for a peaceful resolution . . . ,” he said.

The main American concerns--attention to the security interests of Thailand and opposition to any move that implies recognition of the Vietnamese-installed government in Cambodia--appeared to be met by the wording of the proposal. “The United States certainly supports it,” Shultz said.

Continuing confusion over the proposal revolves around whether Vietnam has rejected it.

Hanoi Rejected Proposal

The formulation, if not the exact wording, is identical to a proposal publicly aired by Thailand earlier this month-- indirect, mediated meetings to be held between Vietnam, whose troops have occupied Cambodia since a 1978 invasion, and the resistance coalition. The Vietnamese-installed regime in Cambodia could attend as part of the Vietnamese delegation. Talks would seek withdrawal of the Vietnamese troops and a political settlement.

Vietnam rejected the Thai proposal through its official news agency. When ASEAN adopted similar language as its proposal early this week, the diplomats here said that they would wait on an official response and ignored the earlier Vietnamese rejection, since it was issued before the ASEAN proposal was made.

On Thursday, a representative of the Vietnamese Embassy here called on the Malaysian Foreign Ministry, expressed surprise that ASEAN had adopted an idea that Hanoi had already rejected and, according to the Vietnamese, asked for an explanation. Malaysian Foreign Minister Ahmad Rithauddeen bin Ismael said Friday that he construed the Vietnamese message as asking for clarification of the contents of the ASEAN proposal and that ASEAN would not consider it rejected until officially informed.