SENIOR INTERDEPARTMENTAL GROUP ON INTERNATIONAL ECONOMIC POLICY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85-01156R000200200003-1
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 6
• Document Creation Date: December 22, 2016
• Document Release Date: September 3, 2010
• Sequence Number: 3
• Publication Date: April 20, 1983
• Content Type: MEMO

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EXECUTIVE SECRETARIAT
Routing Slip
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Remarks:
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DWW
 OFFICE OF THE SECRETARY OF THE TREASURY
WASHINGTON. D.C. 20220
April 20, 1983
UNCLASSIFIED
(With Confidential Attachment)
31
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
DIRECTOR OF CENTRAL INTELLIGENCE
CHAIRMAN, EXPORT-IMPORT BANK
SUBJECT Senior Interdepartmental Group on International
Economic Policy (SIG-IEP)
UNCLASSIFIED
(With Confidential Attachment)
Ex SCUtive P. yis:r7 I
 1LLkY 11A31
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March 31, 1983
3:00 p.m.
Roosevelt Room
Treasury
Secretary Regan
Marc Leland
Office of the Vice President
G. Philip Hughes
State
W. Allen Wallis
Defense
Fred Ikle
Stephen Bryen
Agriculture
Richard Lyng
Alan Tracy
Commerce
Lionel Olmer
USTR
Michael B. Smith
Export-Import Bank
Warren Glick
0MB
Alton G. Keel
CEA
Paul Krugman
Glenn Nelson
OPD
Edwin L. Harper
Roger Porter
NSC
Robert C. McFarlane
Norman Bailey, Executive Secretary
Henry Nau
Roger Robinson
Secretary Regan opened the meeting with a brief review of
the international debt situation. He explained that presently
a group from Treasury was in Brazil and had already met with
President Figueiredo for 1-1/2 hours, as well as with the
Planning and Finance Ministers, to discuss Brazil's follow-up
to its IMF program. It was reported that Secretaries Regan
and Shultz will travel to Mexico on April 18-19 in the context
of our bilateral commission. There was a discussion of using
Exchange Stabilization Fund for short-term lending assistance
to countries such as Peru and Chile. Secretary Regan said he
did not intend to use these funds for Peru and.Chile despite
requests because their problems did not present problems to
the system as Mexico and Brazil had done. (C)
Secretary Regan requested that Allen Wallis make a
presentation on the status of the East-West studies to the
SIG-IEP which is the coordinating body for these efforts.
Under Secretary Wallis reported that frequent meeting had
been held between the chairmen of the respective working
groups. In COCOM, Under Secretary Schneider will lead the
U.S. delegation to the second high-level meeting (HLM) in late
April (the first held in January 1982). The key proposal
Declassify on: OADR
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 CONFIDENTIAL
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will be for an on-going list review and immediate implementation
of those controls already agreed upon. The U.S. delegation will
also emphasize the issues of enforcement, harmonization of
licensing procedures, and an upgrading of the COCOM secretariat.
The State Department was reported as holding bilaterals concerning
our objectives for other high technology items including oil
and gas technology. COCOM agreed to an ad hoc group meeting on
this subject on April 13-14 that would, in turn, report to the
second HLM. (C)
In the energy category, we are very satisfied with the IEA's
conclusions including limiting any one non-OPEC supplier of gas
to 30 percent of a country's total gas supplies. In general,
the IEA went along with our objectives largely due to the positive
intervention of IEA Director Lantzke. (C)
In OECD, the methods of tracking trade and financial flows
were discussed at the last XCSS meeting, and a study is underway
on the balance of advantages in East-West trade (to deal more
effectively with the monopsony power of Soviet state trading
companies). On export credits, there is a problem with France
which wishes to lower the consensus interest rate. This issue
may not be resolved in advance of the OECD Ministerial. (C)
In NATO, the study on the security dimensions of East-West
trade are going reasonably well. The permanent Economic
Secretariat of NATO was described as having formerly been
neglected with insufficient capabilities to deal with these
issues. The strong U.S. emphasis on the security aspects of
East-West trade should help provide new incentives for on-going
work in this area by the Economic Committee. We are taking
steps to keep Japan, Australia, and New Zealand informed of
developments. (C)
This presentation was followed by a discussion during which
Under Secretary Wallis explained the need for U.S. sensitivity
on the public presentation of the East-West economic agenda
item at Williamsburg in order to avoid disruptive public state-
ments by the French. Secretary Shultz and Judge Clark were
reported to be coordinating on an approach which woulcL balance
the achievement of U.S. objectives in the work programs with
the public presentation of these efforts. In sum, it is believed
we will have concrete progress on all the work programs with
the possible exception of NATO by Williamsburg. (C)
The next topic discussed was the U.S.-Japan Energy Working
Group. Secretary Regan requested Under Secretary Wallis to
report on progress. Wallis stated that preparations were well
underway for the first meeting here on April 6-7 and that
Secretary Hodel had agreed to make welcoming remarks. Although
the oil export issue will be discussed, it should not dominate
 the proceedings. Norman Bailey stated that the objectives
of the working group are basically to identify then reduce or
eliminate government constraints to otherwise commercially
viable deals. The first meeting should develop a consensus
concerning logical areas of cooperation and be an opportunity
to gauge the initial Japanese response. Lionel Olmer expressed
concern that our share of Japanese coal imports has declined
from 37 percent to 22 percent due to Japan cutting separate
deals with other suppliers. He commented that our objective
should be to generate long-term coal supply contracts.
Secretary Regan seconded this concern by stating that
Senator Byrd and others on Capitol Hill were interested in
expanding U.S. coal exports to Japan. (C)
The final topic of the meeting was progress on U.S.-EC
farm talks. Secretary Regan requested a report from USTR
Ambassador Smith. Ambassador Smith stated that the two meetings
with Hamperkampt and Davignon of the EC had been useful but
that no concrete results had emerged. The three issues dis-
cussed included wheat, dairy products and poultry. On wheat,
nothing significant was concluded, but Ambassador Brock put
forward the idea that both sides absorb their own dairy product
surpluses. There was agreement not to talk to New Zealand
until the U.S.-EC discussions were concluded. On the issue
of poultry, there was agreement that Brazil would eventually
have to be brought into the discussion. (C)
It was added that it was important that we had agreed on
a joint permanent arrangement to share data to be used in
forecasting assumptions, which would help us penetrate the EC
data base. As to our broader objectives, Dick Lyng reported
that the EC is overproducing for their own needs and is
increasingly subsidizing exports, in turn, reducing our market
share in third countries. There should be a gradual resolution
to this problem, and we have not retaliated more strongly in
the hope of achieving progress (although no commitment was
made not to retaliate in the future). The discussion concluded
with the statement that we need to freeze or reduce annual
domestic price supports, the EC put a cap on subsidies
commodity by commodity and negotiate a GATT subsidy code. The
EC has so far not agreed to any of these proposed measures. (C)
Classified by Marc E. Leland
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