SENIOR INTERDEPARTMENTAL GROUP ON INTERNATIONAL ECONOMIC POLICY (SIG-IEP)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84B00049R000501420002-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 5
• Document Creation Date: December 23, 2016
• Document Release Date: October 19, 2010
• Sequence Number: 2
• Publication Date: January 4, 1983
• Content Type: MEMO

Declassified in Part - Sanitized Copy Approved for Release 2013/05/03: CIA-RDP84B00049R000501420002-3
OFFICE OF THE SECRETARY OF THE TREASURY
WASHINGTON. D.C. 20220
January 4, 1983
MEMORANDUM FOR THE VICE PRESIDENT
THE SECRETARY OF STATE
THE SECRETARY OF DEFENSE
THE SECRETARY OF AGRICULTURE
THE SECRETARY OF COMMERCE
THE DIRECTOR, OFFICE OF MANAGEMENT
AND BUDGET
CHAIRMAN, COUNCIL OF ECONOMIC ADVISORS
ASSISTANT TO THE PRESIDENT FOR
NATIONAL SECURITY AFFAIRS
ASSISTANT TO THE PRESIDENT FOR
POLICY DEVELOPMENT
UNITED STATES TRADE REPRESENTATIVE
~IRECTOR OF CENTRAL INTELLIGENCE
SUBJECT Senior Interdepartmental Group on International
Economic Policy (SIG-IEP)
Attached please find the minutes of the SIG-IEP meeting
held on Thursday, December 23, 1982.
Executive Secretary
(With ee e A a ehfReRt)
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SENIOR INTERDEPARTMENTAL GROUP-INTERNATIONAL ECONOMIC POLICY
Thursday, December 23, 1982
11:00 a.m.
Roosevelt Room
Attendees:
Treasury
Secretary Regan
Thomas Leddy
Office of Vice President
Admiral Daniel J. Murphy
Donald Gregg
State
Secretary Shultz
W. Allen Wallis
Defense
Fred C. Ikle
Agriculture
Secretary Block
Seeley Lodwick
USTR
John Ray
Cecilia Klein
CEA
Martin Feldstein
OPD
Roger Porter
NSC
William P. Clark
Norman Bailey, Executive Secretary
Roger Robinson
Henry Nau
William F. Martin
Commerce
Secretary Baldrige
Lionel Olmer
CIA
Director Casey
Henry Rowen
Maurice Ernst
OMB
Alton Keel
The Chairman asked Secretary Shultz to give a report on U.S.-
EC relations based on the Secretary's recent visit to Europe.
Secretary Shultz began by noting that economic relations with
Europe can be assessed only alongside broader political and
strategic concerns, and 1983 will be a critical one in every
dimension of U.S.-European relations. We can be encouraged on the
NATO front -- despite great difficulty, the Allies are determined
to see deployment through. On East-West economic relations, we
have what we need to get things moving. COCOM activities are
proceeding and will be taken more seriously. Agreement has been
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reached that other high technologies, including oil and gas,
should be examined for their bearing on security, although we
are more convinced that a link exists than our Allies. On energy,
we are undertaking an alternatives study within the framework of
the OECD, including IEA. We also have agreement on credits not
to subsidize the Soviet economy, although this issue will have
to be addressed in its complexity. The OECD will take responsibility
for this area with Treasury managing our contribution.
France has agreed to the need for an overall strategy study within
NATO which casts the issue in a security context. This is appropriate
from the U.S. perspective, although it does raise problems with
Japanese participation. The French also noted that the various
studies should be completed for the round of spring Ministerial
meetings (NATO, OECD) leading up to the Williamsburg Summit. This
fits our schedule well. Allen Wallis will coordinate these activities
at the working level and report to the SIG-IEP. In concluding the
discussion on East-West economic relations, Secretary Shultz under-
scored that 1983 will be a critical year in a public relations sense.
He warned, and others strongly concurred, that continued indiscrete
press leaks can greatly harm our effort.
Secretary Shultz then reported that some good meetings were held
on agriculture. This was due to the realization that the direction
we are headed is frightening and can be avoided. Discussions
will continue in January. Care should be taken not to take any
antagonistic steps at this time. The SIG-IEP should continue to
provide input into the negotiations.
Secretary Regan then reported on international debt developments.
The situation in Mexico, Argentina and Brazil is improving, but
problems still exist in getting the exact sums. One of the main
problems with Mexico is with the Japanese over how much they are
owed. A second problem is with U.S. regionals banks, which are
refusing to renew or expand Mexican debt. The Brazilian effort is
going reasonably well, although large banks will have to make up the
shortfall resulting from failure of regional banks to participate
fully. The Argentine effort is being spearheaded by Federal Reserve
Chairman Volcker who is arranging 60% of the bridging loans.
The Yugoslav situation remains serious and continued close attention
will be necessary into the New Year. At year end, Yugoslavia will
have $200 million in available reserves. A current account deficit
for January 1983 is forecast and the IMF estimates that there are
$300 million in debt payments due. The crunch is likely to come by
mid-January. The total financial gap over the year could be as high
as $1.5 billion; virtually all of it will fall in the first half.
Negotiations are underway for a third and final year of an IMF
program. The specifics being asked for by the Fund are very difficult
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but necessary to meet IMF conditions and to encourage private
banks to assist with complementary financing.
The desired outcome is for Yugoslavia to agree to the IMF
program, private banks to put together complementary financing,
governments to agree to a billion dollar medium-term package,
and the IBRD to make a $300 million structural loan. A short-
term bridge loan could be put together through the BIS.
The U.S. has indicated that we could do $200 million in export
credit guarantees. Other countries have indicated pledges of
$470 million. This brings the potential total to $670 million
out of the $1 billion to be provided by governments.
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EXECUTIVE SECRETARIAT
Routing Slip
ACTION
INFO
DATE
INITIAL
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DCI
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DD
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EXDIR
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D/ICS
5
DDI
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DDA
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DDO
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DDS&T
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Chm/NIC
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GC
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IG
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Compt
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D/EEO
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D/Pers
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D/OEA
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C/PAD/OEA
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IA
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A0/DCI
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C/IPD/0IS
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OJOO _ld
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Declassified in Part - Sanitized Copy Approved for Release 2013/05/03: CIA-RDP84B00049R000501420002-3