News Conference by the Secretary of State and the Secretary of the Treasury at the International Economic Summit Meeting in London

SECRETARY VANCE. I thought I might say just a few words first in the way of general background, and then both Mike and I'll be glad to answer any questions which you may have on the details of the document which was issued, and the appendix to it.

There are about three points, I think, that are important to make at the outset. First of all, I think the summit was very important because it dealt with substantive matters in a way which was unique. I talked to one person after the summit who had been to all three of the summits, and he said that there was more substance dealt with in this summit than any of the others which had been held.

This came about as a result of a process of frank exchanges between the participants. The atmosphere was friendly, yet people were willing to put their differences out on the table. They listened to each other and, as a result of this, were able to develop common ground even though they may have started with differences.

Unlike the past, there will be a follow-on for this summit, and each of the countries will establish one or more individuals who will have the responsibility to follow up and make sure that the pledges which were made and the recommendations which had flowed from these meetings will be carried forward. I think this is a very important step.

Thirdly, I think it is important because it gave, for the first time, a number of the participants a chance to meet with each other and to establish a close personal working relationship. It was interesting to observe this and to see the closeness develop as the days went on. I think in this respect it was a great success, and overall I would evaluate it as a very useful and constructive set of meetings.

The Prime Minister covered a number of the questions which you've had with respect to the various pledges made and the individual items. But I'm sure you have a number more, and Mike and I will divide up answering the questions. Mike will take primarily those dealing with the economic issues and trade. I will cover those dealing with the nuclear matters and with the North-South dialog. So, who has the first question?

Q. Who will follow up for the United States?

QUESTIONS

GERMANY/BRAZIL NUCLEAR TRADE

Q. Mr. Secretary, I would like to know about the positions, precise positions about the deal between Germany and Brazil about the nuclear question. Could you elaborate this problem?

SECRETARY VANCE. That subject was just mentioned in passing. It did not come up as a subject for any real discussion. The subject matter was much broader than that in dealing with the nuclear issues.

Q. Who will follow up with the United States?

SECRETARY VANCE. Henry Owen, who is sitting right there and who is responsible for the preparation work insofar as the United States is concerned, will be the one who did that. I might say, incidentally, that another reason for the success of this summit, I think, is the excellence of the preparation work that was done by Henry and the others representing their various countries.

Q. How will that work exactly?

SECRETARY VANCE. The details have not yet been worked out.

Q. But there are counterparts for Mr. Owen?

SECRETARY VANCE. There are. Yes, indeed.

INTERNATIONAL MONETARY FUND

Q. When the Communiqué speaks of additional resources for the IMF, is that beyond what the interim committee has already agreed on, the $10 billion to $15 billion? Is there something more in mind?

Q. Question?

SECRETARY BLUMENTHAL. The question is whether or not the reference in the Communiqué to the additional resources of the IMF refers to what the interim committee has already agreed on.

This refers first to the Witteveen facility and to the support of the countries there to making that a reality. Secondly, it refers to the support for increase, a further increase, a seventh increase in the quotas, which has to be decided by February of next year.

SUMMIT DECLARATION

Q. In Washington when we got a briefing about the summit, we were told that the issue of bribery, extortion, illicit payments would not be ready for discussion at this summit. How come we end up with it in the appendix?

SECRETARY BLUMENTHAL. This was a suggestion that was made by the United States, and the other countries agreed to it. Indeed, the actual language includes not only reference to trade but also to commerce and to banking, and it really reflects the view of all of the leaders there that that was an important issue and that we should collaborate together to stamp it out.

Q. At what point did you decide to bring it up? Before we left, according to the people who prepared the summit, it wasn't going to be brought up.
SECRETARY BLUMENTHAL. It was in the drafts that I saw.

Q. Mr. Secretary, to follow that, just what does the language of the appendix mean? What will follow here in relation to international trade, banking, and commerce? What are the practices you are talking about?

SECRETARY BLUMENTHAL. There are discussions going on to negotiate agreements in the United Nations. We have before us in the Congress a legislative proposal to make bribery for Americans illegal. That would require collaboration with other governments, and certainly this language ought to make it possible to and somewhat easier to really put some teeth into that legislation.

NUCLEAR NONPROLIFERATION

Q. Mr. Secretary, at which level the primary analysis of the nuclear question is going to be conducted?
SECRETARY VANCE. Excuse me?

Q. At which level the analysis of the nuclear question is going to be conducted?

SECRETARY VANCE. Let me tell you what was agreed upon. It was agreed that there would be a study to be completed within 2 months with reports back to the members of the summit. That would encompass an analysis of what could be done in general terms to meet the problems raised in the nuclear field arising out of the danger of proliferation coming from the export of nuclear materials for purposes of energy. And it was further agreed that there would be the development of the terms of reference for a much longer study which would be involved with an evaluation of the international fuel cycle. And that study would take, I would say, probably a year or more to do, once the terms of reference are developed.

SUMMIT DECLARATION

Q. Mr. Secretary, could you tell us whether the language of the Communiqué is meant to imply that all of the members now approve of a common fund for commodities stabilization?

SECRETARY VANCE. There was agreement that there should be a common fund. It is not the common fund, but a common fund.

Q. Is that the IRF idea?

SECRETARY VANCE. The idea is that here should be a common fund which would be related to commodity agreements which have been negotiated.

Q. A common fund of how much, Mr. Secretary?

SECRETARY BLUMENTHAL. None of the details have been worked out and are stated in the Communiqué. The important decision that was taken here is represented by the agreement of all the heads of government there. On the notion that there shall be a common fund for stabilization of commodities, with buffer stocks, that the type of fund, how and where and what amounts, how it will function, that's something to be discussed and negotiated in the future. But there is an acceptance of the notion of a common fund idea.

INTERNATIONAL ECONOMY

Q. Mr. Blumenthal, I think it's lovely that you have agreed that you would promote economic growth and yet curb inflation simultaneously, but what specifically have you decided to do that would help you achieve that rather magnificent goal?

SECRETARY BLUMENTHAL. I think the significant thing about that statement is that the heads of government have agreed that having stated certain growth targets in some cases and certain stabilization targets in other cases, that they undertake a pledge, as Prime Minister Callaghan said, to do whatever is necessary to meet those targets. And they have also agreed that the meeting of those targets cannot, should not, be at the expense of inflation; that therefore, as each of them takes the necessary steps to meet the growth targets, it is understood by all of the others that they will not do so at the expense of inflation, and that they will fight against inflation; that these two things are closely related together and must be watched together. It's clearly left to each individual country to develop its own internal policies and specifics.

Q. But how is that any different from any previous goals, either common or individually? Does it mean higher inflation and less growth?
SECRETARY BLUMENTHAL. I think as far as summit meetings are concerned, there is a difference in the sense that previously there were some general goals. But here there are not only targets, but there is a commitment to do what is necessary to meet these targets.

PRESIDENT'S INITIATIVES AT SUMMIT CONFERENCE

Q. Mr. Secretary, President Carter said he is bringing new initiatives to the summit conference. Could you be more specific as to what those initiatives were and the final results of them?
SECRETARY VANCE. Yes. There were a number of new initiatives. One of them is the study that I referred to a moment ago, which concerns an evaluation of the international fuel cycle. Secondly, were proposals relating to the special action fund. We reached general agreement that there should be a special action fund to take care of some of the developing countries in the greatest need and that each would contribute his adequate share to that particular fund.

The whole issue of irregular practices which Mike referred to a moment ago is another one of the new initiatives that was brought forward. Those are some examples.

Q. Just to follow up on that, Mr. Secretary, this special action fund to which you refer, is that mentioned in the appendix, and what exactly is it?

SECRETARY VANCE. It is not in those terms mentioned. It is something which will come up at the meetings which will be held in Paris at the end of this month, the North-South meetings which are called the CIEC meetings. And what it is, is a fund which will be available to meet the needs of some of the poorest countries which are having balance of payments problems and specific needs of that kind. That, in general, is what the nature is.

Q. Outside the IMF?
SECRETARY VANCE. Yes, outside.

Q. Outside of the common fund as well?

SECRETARY BLUMENTHAL. Yes. That is unrelated to the common fund. May I just add one or two others in the area of special initiatives--of new initiatives.

I would think that one ought to add the decision in the trade area, that there has to be a new---of the heads of government-to pledge themselves to a new impetus in the trade negotiations, against the background of a rejection of protectionism and with the commitment to make substantial progress by the end of this year.

SALE OF NUCLEAR MATERIAL

Q. Mr. Secretary, you mentioned the 2-month nuclear study and the 1-year study to set terms of reference. Was there any agreement here that during that period, either the 2-month or the 1-year, that there would not be the sales of nuclear grade materials?

SECRETARY VANCE. No. No such agreement was reached at this time. Each country will take care of that decision which it will have to make according to its own views of the matter. The discussions of these issues will continue in the London suppliers group as they have in the past.

Now, I just want to correct one thing which you said. The 2-month study will be a study which will include recommendations with respect to the terms of reference. So, after that 2-month study, one should have the terms of reference. And then a decision as to how to proceed on the actual study itself, which could last a year or more.

Q. Mr. Secretary, how would the nuclear suppliers be brought into the study, if at all?

SECRETARY VANCE. In the initial study, the 2-month study, the nuclear suppliers group as such will not be involved in it. As one moves on to international fuel cycle evaluation, then the London suppliers group and the individuals involved in it would undoubtedly become a part of that broader study.

INTERNATIONAL ECONOMY

Q. Mr. Secretary, would the special action fund be within the framework of any existing organization such as OECD, G-10, or something entirely new?

SECRETARY VANCE. That decision has not yet been made as to where it would be placed.

Q. Mr. Vance, how does your special action fund differ from the decisions made at the Washington Energy Conference in 1974?
SECRETARY VANCE. I can't answer that.

Q. Can Mr. Blumental?
SECRETARY BLUMENTHAL. No, I really can't. I do not know what happened with that conference with regard to the special fund.

Q. Mr. Blumenthal, most of the countries involved here have not been able to fight inflation and reduce unemployment in the recent past. Now, apart from saying that they're going to do it now, what is it that they have done here that's going to enable them to do it then?

SECRETARY BLUMENTHAL. Well, I can only repeat again that what I think is significant is that the countries have agreed that they will do what is necessary to meet their growth targets. Meeting their growth targets and, at the same time, meeting the stabilization targets for those countries who have been deficit countries in the past will improve the international economic environment. It will create additional volumes of trade. Certainly, the stabilization programs will reduce inflation. And through this improved international environment, and through the commitment to meet those targets, the overall situation is likely to be improved.

There was no effort on the part of the heads of government to find a solution, to find the formula for dealing with inflation and for dealing with unemployment in their individual countries. There was an effort to see how they could work together in order to make that situation for each of them better.

FOREIGN TRADE

Q. Mr. Secretary, with respect to your rejection of protectionism, you still reserve the right to avoid significant market disruption. If any country can characterize its problem as significant market disruptions, wouldn't protectionism still grow under that flag?
SECRETARY BLUMENTHAL. I don't really think so. We interpret that as a reference, and it's generally interpreted as a reference to the existing arrangements that now exist and the rights that exist under the GATT for countries who face particular problems of disruption, to get some relief, sometimes for temporary periods of time. The GATT has specific provisions for that. And this particular paragraph merely calls attention to the fact that as further liberalization takes place, these rights, of course, are not affected by them.

Q. Mr. Secretary, what is the difference between the part of the Communiqué emphasizing the readiness of the heads of government to meet the targets they have set themselves in sovereignty between that old practice in the OECD to have representatives talk in various groups about targets and establishing when the governments are to meet those targets? I don't see a difference. How do you see the difference?

SECRETARY BLUMENTHAL. In the past, countries have indicated what it is that they hope to do. In this particular instance, the heads of government have not only indicated what it is that they hope to do but they have given a pledge that they will, if they fail, fall short of it, take the necessary measures to make sure that they achieve their targets.

CONFERENCE ACCOMPLISHMENTS

Q. Mr. Secretary, given what you have said here today, and Secretary Vance as well, just how disappointed is the American delegation that something substantial is not accomplished? [Laughter] Seriously, how disappointed are you?

SECRETARY BLUMENTHAL. We are not at all disappointed. We are quite pleased, because we believe that very substantial results have been accomplished. There have been a number of specific things that have been done in the area of setting targets and the commitment that they will be met, in the commitment of all of us to strengthen international institutions, both the IMF and the World Bank, in the decision to give a real impetus to the trade negotiations which have been stalled for some time, in finding a solution to the nuclear problem to which Secretary Vance has referred, in the decision to collaborate and take some specific steps in the North-South dialog, and to resolve to make the CIEC ministerial meetings and these discussions a success, in the matter of illicit payments, and a variety of other ways. We think that kind of complete agreement, the way in which the leaders got to know each other, that they worked out these problems, represents a considerable success. But perhaps Secretary Vance would like to add to that further.
SECRETARY VANCE. No.

Q. Is that good intentions only, then?
SECRETARY VANCE. No, I don't think it's good intentions only, at all. These declarations were reached, and as I indicated earlier, these are not simply pious words; they are going to be followed up on. Plans are to be developed and will be carried out. We'll be seeing the results of the actions with respect to the North-South issues to which both Mike and I have referred in the CIEC meeting which will come up at the end of this month. Insofar as the illicit payments are concerned, the fact that this declaration is made, I think, is going to have a very important effect on the action that has been going forward in the United Nations to try and complete the study in that particular area. It will give impetus and strength to it. And I could go on through many of the other issues. Yes.

Q. There was a great deal of discussion of the Communiqué from the various leaders about how they had influenced each other, and the President said that he had learned a great deal. Does that mean that any of his views that he had before coming into this session on these various matters were modified or changed?

SECRETARY VANCE. Yes. I think that that was not only true of the President but of all of the participants. They really did listen to each other and learned from the listening process.

Q. Can you give us some examples of how the President's view may have been changed, for instance, on the nuclear issue, if it were modified at all there?

SECRETARY VANCE. On the nuclear issue, I think that this was primarily one in which we were trying to explain what our suggestion was about. And in the process of doing that, there was a full exchange which, I think, sharpened the view of all of us with respect to the problems of the other nations who are not quite as fortunate as we are in terms of the resources which we have. And in that sense, I think it was useful to us.

I think they also learned from the process, and therefore, we were very much encouraged when they were willing to agree to go forward with these studies to which I have referred.

Q. Does this year or more of study of the nuclear problem, Mr. Secretary, represent a retreat from President Carter's position on the nuclear proliferation?

SECRETARY VANCE. Not at all, no. This is wholly consistent with it. This is what he has proposed before•

Q. What's the policy going to be on export of enriched uranium during that year or year and a half?

SECRETARY VANCE. You say you've got copies in the room?

MR. POWELL. The statements of the President's policy that were delivered 2 weeks ago are available in the back of the room for anyone who wants them•

SECRETARY VANCE. Did you get the answer to that?

Q. I was asking you what the policy is going to be.

SECRETARY VANCE. It's laid out in some detail. It's rather long and complicated. There are two or three sheets in the back of the room on it.

UNDERDEVELOPED COUNTRIES

Q. The common fund will be invited to join in aid for the underdeveloped countries. Which form will this invitation have?

SECRETARY VANCE. I think the public announcement of this is the form which it will take.

JAPAN

Q. Mr. Secretary, there's a notable lack of reference to Japan's involvement in trilateral issues. Could you please explain how Japan was involved in the discussions and also whether or not it was talked about--Japan's trade surplus with the European countries?

SECRETARY VANCE. Japan was intimately involved in all of the discussions. There was a free-flowing discussion between the heads of state which flowed back and forth, the Japanese participated very actively and in a very constructive way during these discussions. The question which you specifically referred to did come up as one of the items in the discussion.

Q. How was it resolved?

Q. Mr. Secretary?
SECRETARY VANCE. Yes.

HUMAN RIGHTS

Q. The other day Secretary Blumenthal was talking to us about the human rights issue, said that the leaders universally praised President Carter's position. And Mr. Callaghan tonight indicated the same thing. The German sources are saying that during the conversations, while praising President Carter's position, Chancellor Schmidt pointed out that continuation of a too-vocal human rights policy might deter the ability of the Germans to get Germans out of Eastern countries. Did Chancellor Schmidt make such a statement during the meeting?

SECRETARY VANCE. He did make such a statement during the meeting. I don't want to go into details on what individuals said, but that was one of the issues which was raised in general terms, that some countries had different problems with respect to how they would handle it --but not with the basic principle. There was no difference at all with respect to the basic principle.

FOREIGN TRADE

Q. Do you believe
SECRETARY VANCE. I can't hear you.

Q. Do you agree with the idea of organizing free trade and do you think

SECRETARY VANCE. I still can't hear all of the questions.

Q. Do you agree with the idea of organizing free trade, and to which extent do you think it can be organized?

Q. Free trade, as the French have suggested?

SECRETARY VANCE. Did you get that, Mike?
SECRETARY BLUMENTHAL. I think I got the question. I hope I understand the significance of it. [Laughter]

Yes, we do agree that indeed we are happy with the conclusion that comes out of this meeting, which rejects protectionism and therefore, by implication and also very explicitly, comes down in favor of negotiating and having a new impetus, so that this year there will be a lot of progress toward a rapid conclusion of a negotiation which will represent freer trade.

We certainly believe that it can be done. There was reference to the fact that there are structural changes in the world economy that have to be taken into account.

We welcome that because it will allow all of us in the context of the trade negotiations to take into account not only tariff problems but also non-tariff barrier problems and agricultural problems, internal taxation, subsidies, the many matters that exist in the world of trade that have to be dealt with if freer trade, which we desire and which we all want to achieve, is to be brought about.

THE MIDDLE EAST

Q. Mr. Secretary, how do you see tomorrow's meeting with President Asad of Syria and your coming meeting with Mr. Allon?
SECRETARY VANCE. How do I feel?

Q. How do you see the coming meeting with President Asad of Syria and your meeting with Mr. Allon of Israel?

SECRETARY VANCE. The question was: How do I see the forthcoming meeting with President Asad, which we will have tomorrow, and also my meeting with Foreign Minister Allon?

The President and I are looking forward very much to our meeting with President Asad. He is one of the key figures, of course, in the Middle East and in the solving of the Middle East question. We have had the opportunity to meet with most of the other Arab leaders, but this will be our first meeting with him, at least the President's first meeting with him.

His views are going to be extremely important in the development of our final views with respect to the proposals which we may choose to make in connection with the settlement of the Middle East question.

I met with Foreign Minister Allon on my last Middle East trip. A good deal has happened since that time, and we have had these meetings with the other Arab leaders during that period. Therefore, I thought it was time for us to meet again, where I could review with him what had come out of the conversations with the other Arab leaders and get the latest thinking of the Israelis on the Middle East question.

Q. Mr. Secretary?

JAPAN

SECRETARY VANCE. One or two more questions.

Q. Excuse me; one follow-up. You did mention the trade surplus of Japan to the European Economic Community, but was it resolved? Did Japan make any overtures at reducing trade surplus and helping these economic deficits in Europe?

SECRETARY BLUMENTHAL. Japan, along with the other countries, committed itself to meet its growth targets and to meet its targets that had previously stated. And it did accept the notion that the strong countries must make a particular effort so that the surpluses in the world can be taken care of. So, in that sense, the Japanese took full cognizance of their position and promised to act accordingly.
SECRETARY VANCE. One final question.

FOREIGN NUCLEAR SALES

Q. Is the United States willing to modify its nuclear policy if the result of the 2-month study should request, and especially in terms of the condition, or requirement, of the approval for doing the reprocessing in foreign countries--or do you know if the United States expects to store the nuclear waste inside the United States in the future?
SECRETARY VANCE. The 2-month study will be a preliminary analysis, as I indicated, which will develop the terms of reference for the longer study which will go into the kinds of question which you are talking about. Of course, what comes out of that will be very important, not only to the United States in determining what its policy should be in the future, but to all the other participants who will be involved in it.
Thanks very much.