SENIOR INTERDEPARTMENTAL GROUP MEETING RE THE VERSAILLES SUMMIT, APRIL 6, 1982 10:00 A.M.

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83M00914R000500120021-5
• Release Decision: RIFPUB
• Original Classification: C
• Document Page Count: 18
• Document Creation Date: December 22, 2016
• Document Release Date: November 5, 2009
• Sequence Number: 21
• Publication Date: April 5, 1985
• Content Type: MEMO

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crr~o~rm,~
T1. 1 :~.. , - , R!' Y couNciL.
Mf11 idaNatuw. 11 . alas
April 5, 19a2
*2172
1ORA uii ?OR Nancy Bearg Dyke
Assistant to the Vice President
for National Security Affairs
L. Paul Oreii
Executives Secretary
art an.t Of State
#3aaid Pickkfoid
Executive Secretary
Department of the Treasury
Robert P. Meehan
Assistant for Interagency Matters
Office of the Secretary of Defense,
ltay stand Lett
Executive Assistant to the Secretary
Department of Agriculture
Jean Jones
Director, Executive Secretariat
Department Of Commerce
William V. Vitale
Director., Office of the Executive Secretariat
Department of Energy
William Schneider
Associate Director for :iational Security =lid
International Affairs,
Office of Management and Budget
Thomas B. Coreack. Executive Secretary
Cen t..ra: IE te13. genre Agency
Dennis Whitfield
Executive Assistant to the USTR
Roger Porter, Special Assistant to the Prttact
r for PoU y v.~lrz~unrzzr_, Q?!
James Burnham, Special Assistant to the
C:;airrnan, Council of Economic Advisers
Charles F. Stebbins, Executive Assistant to
the Chai.zn, Joint Chiefs of Staff
SUBJECT: Senior Interdepartmental Group Meeting
re the Versailles Summit, April:'6, 1982
10:00 a-=,
1k 7 Cfl:'1 _ ENTZ1AL ? r t-4- M=1 At [ .:?~, J j
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CON -f-0-9 YIKL
The Senior Interdepartmental Group for the Versailles Sumit
kiLL a+ee:t &t LO 00 . a,. m_ as April 6 , 1482: in Room 3 45; QBDB.
Two draft ?documents. attached to this announcement, will be
considered at the meeting:
__ the "Strati Paper" for the 'Versailles Shit
-- a tasking memorandum, establishing responsi-
bility and schedule for preparation of the
President's Briefing Book.
A third draft document on 010 trade theMS at the SUMIt Will
be csrczisted and discussed at a later :aeeting,
Agency representatives are requested to bring specific
written ttsp if ~y f r thdraL.i t is ing r? id~ii 6.
a-~L&.
chael Q_ Wh eler
Staff Secretary
A,ttaCIMMUta
T'bTIAL
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CONFZDENTZAL
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Versailles Economic Summit
June 4-i, 1992
STSATEG t PAPER
B.S. Osctives
Thaws : The President's central theme throughout the
European trip will be to affirm shared Western values and to
revitalize Western economic and military strength in support
-of -these values. He will stress t tie importance at! the ali aos
as a symbol of shared ~?.al~. es, ? d as t.t_lft key to '--he
of war_ He vtu project himself as a strong. fader -coamitted
to the .pram vAt4OA o peace -and freedom. At Versaill , the
President viii strike themes sounded at Ottawa to seek
t ' ` aawcy . ' = t hasi' i ?vf i^/13- ~srm f CtTiII ttal pril data of
z -i flatIonary qrowth and propose new initiati to siw
farward toward fust y libersIiaation of world trade, and
to wanitor and restrain the flow of credit to the Soviet
union.
Major Objective
s
- To confirm the necessity of reducing inflation, of
pr ti q private actor -217tiv; ty, --specially p r v ete invest.-
meat, axed of greater reliance on market signals as essential
elements in revitalizing Western economies.
To explore avenues fox gra;at.-.z fie t # i
gence of policies, thereby showing sensitivity to the.
in-terna*ional consequences of U.S. policy.
- To obtain a political commitment to (a) resolve problems
facing the multilateral trading systems, without restoring to
bilatarslism or protectionist actions, (b) to extend the
frieciples of free trade to new sectors such ae saw s
inVe tmesst-, hig4 technology and agriculture and to seek to
incline more fully new countries, such a9 the newly indus-
rr_ a' ixinq countries, and (c) to work far a ptouctive ITT
Ministerial this fall as an .initial step in this direction.
- To reach final agreement among the Summit countries
on the objective of, and a means for, mnitoring and restricting
the volume and terms of official credits to the Soviet U: fott.
Other Objectives:
- To initiate a process leading toward a frame~ror.Jc for
international investment flows, similar to the GATT for
trade i.n goods, thereby enhancing the climate for free inter-
national capital flows.
i'r'`p";rt r1s
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IT ICI I Imo,.
- To reiterate the importance of agricultural policy,
for -deeslopment, as presented at Cancun, and propose extending
the "food teams" concept to a multilateral basis.
TO focus energy diz_assions on the value of market
forces=-in addressing the global energy prpbleae, but also to
acknowledga the need for greater attention to secure supplies
of energy in the west.
settina
The Annual Economic Summit takes place or* June 4-6 in
era rsajes, Pry.. Thts immit is the erg.. 3~ and t'1ae fizet.
of -a now raaad of Eosic Summits, which have . bece a major
feature of the International economic system.
At Ottawa, President Reagan re-established U.S. head ersl-Sp
in the eccnamic sphere by a forceful presentation and defense
of his economic program. Despite sharp differences aver
interest rates, East-West trade and North-South relations,
the communique issued at Ottawa reflected all of the Mited
States' major objectives -- an upbeat tone, no hint of protec-
tionism, unified albeit ambimous positions: an North-South
and East- e,t issues, and a -chairman's Sim ary, on political
issues that expressed an extraordinary degree of consensus
among t -be, siU s on t-be nature if the S-Criet mat and the
Neste= response to it. 3(uch of the "upbeat" tone em ating
frost Ottawa can be attributed to the President's confidence
that his economic program would lead to sharply lower inflation
and sound, vigorous growth in the United States. While
skeptical, the other participants adopted a "wait-and--sae" ?
attitude about the U.S. program, an imaginative and attractive
economic plan that had not yet been fully implemented.
Economic and political events since Ottawa have wvrtseasd
certain alliance issues, particularly in monetary, trade
and East-west relations:
severe recession in the u.:5.,-
sharply rising unemployment throughout the
industrial world (except Japan);
persisting high U.S. Interest rates;
projections of massive budget deficits in the
U.S. and Europe, especially in France;
collapse of the U.S. Trigger Price Mechanism
for steel imports and more aggressive European
marketing for subsidized agricultural products;
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S
3 -
be .ghten d tension Within the .EMS due to 4i r t3
~erorre>mic pe>licy among EuroPean Countries; and
isition of martial law in Poland and tensions
within the alli.:.;ce over application of economic
sanctions.
34en these events, the President.'s success at Ottawa
ii331 mot b y -to duplieata. Even of tic activity
is str gtheninq, unemployment in Europe will be at historic
high levels, generating immense pressures for governments
to soma thiacl. Meanwhile, many Europe-an leaders are
engaging in a certain amount of escape goatism' to transfer
rezPc i i L fly for the i.r poor tic performance to the
U.S.* and U.S.. interest rates in particular, rather than
=dartaking the necessary domestic policy actions to reduce
inflaf.fot and revitalize growth in their economies. ' poor
sacroisconomic setting, and the attempt to place hrlam& on the
U.S., will color trade, monetary and aid discussions.
-As -importantly, unless the U. S. economy is pexfzrminq
better than new expected by late Spring, the skeptics at .
home and Abroad will be lobbying stsnngiy for agree a AM
Policy actions not consistent with our economic program. .
Economic d i.ffi . z ties will spill over into the ms. po ticj
s; is im as vali -- r airing to . ropean ct* to
East-West relations., including Poland and Soviet -credit restraint.
Views of other Participants and U .S. Strate+ y
~r .r~,~ w,~.her E Lie...u ~~----z.L..~
1 e Frenh nd `o rope } . ,s+7 mmdt pa 1.n: J` '?Fii i
short-term domestic economic issues -- unemployment, high
interest rates, monetary policy -- with particular focus on
U.S. economic policy. The Vn.i.teed States prefers to stress
larger-term and more international issues such as trade and
Zest-West relations, to sores areas where progress has bmn
made such as energy and North-South relations, and to play
out the adverse consequences of domestic politics, such as
subsidies, demand stirnuslus measures, etc. on multilateral
trading and financial relations and ul tin tea ' spects .
for domestic recovery and growth.
All 1+* = part icipa tg in the &t s;;it -w"
ill -vita t {; a
interest rates as the factor now troubling strong economic
recovery or otherwise disturbing international etc
relations. For the French and perhaps the Italians, the
recommended seluticn involves expansionary fiscal, and neanetary
policy to attack unemp loytnent directly. most, howe er.
a t3r's~ anti- -inf3 aticnar r -at=re gi42t
but are critical of the by t~ ?`S~ ~~ or projected U. S. budget deficits which
they be2.feve are holding U. S. interest rates far above._,. __
FIV
i~;ricf ,TIAL
C1. I L-1
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UUM 1ULIU I tML
just fled levels. The concern about U. S. interest rates is
tied to the desliar; s role as an international currency.-. and
the dominant influence of the .urv--o14 ar r t aver E rope
.interest rates. The Europeans, in particular, hold their
position on all other issues, such as -trade issues, restraint
on credits to the Soviet Unicn, hostage to U. S. action on
deficits and interest rates.
Japan will seek to avoid being isolated in the trod.
,diactissi , thus warding off direct criticism of its trade
policies. in part, japan -wiiii base its defense on the
"undervat ued* yen, caused by capital outflows attracted to
the U.S. capital market by high interest rates.
Tot this settSang, t se U. g. ust take the otfenalva by
enp a i.zing -positive objectives .rathetr than dwelling on
the criticisms of U. S. dossiestic policy. To this end, we
have concentrated on the following topics in the preparatory
process:
greater economic policy coordination, especially
as it relates to coamvn o#rjectivea such as red cinq
inflation, controlling the growth of ear supply.
and promoting sound private sector growth;
trade in the broadest sense as it relates. to
exchange of industrial goods, services, capital,
and agriculture, to domestic adjust aseat policies,
to technological innovation and to investment;
energy security building on sound i3o estic market
policies (which have been achieved now in most
Summit countries) and international cooperation to
protect against vulnerability of supplies; and
-- East Wiest economic relations, with particular
emphasis on means .to avoid growing Western vulner-
ability to the debt build-up in the Soviet Union.
Improvement in the U.S. economy or altered expectations
in the U. S. financial markets would significantly improve
the climate at the Summit, and may make more ac - i-evahle U. S.
objectives in the international areas.
Versailles and NATO
The proximity of the Versailles Summit and the NATO
Summit in Bonn makes particularly important a constructive
meeting of the minds on the long-run economic prospects of
the Western nations.
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LUG ILHAL
:`he two 8a~ .its =uld aet n -,aetio a process of shaping
a reinvigoratedworld ecorcmy sy-4tern for. the 1-3805tegimting
iln_ the ? L1r z3~ a iii ~i-1 vh ti L'~ W~j
November 1.982. Convergence of views- on economic Policy and
on a stronger ecoro.mic future will go far to insure a more
atti t-cde t;s r i Ke stare daf en se weed at . T?
S nmc wit s Should rea.f fi r= .fxmda=en ta.i We-stsxa vra aez of polIt#oa l
ffreod= and eccmoaaf opparLun:ity in the face cf gaol*-j=W
L ita ,r -S`IULISSa'a'a --nd --c= 43 .C fa. . e af C5 5 SIS* .9V &anfiow-
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(Gi~tr. ii~-it~irrn i,isr iiezel
.S b jr~ct: '/er ~.~i 11cs Summit -briefing :ta.tarials
State i'.i.tison: :?;arshall Casse - F; Rm. 7250 '1S, 632-1089
':SC F.i.?t; .;on: r ury N au - 7ttt. 392, Or".0a, 395-6761
State S/S-S projrr_t ,3m white , Rm. 3241 VIS: 632-8062
Tho- Prr_s?(4,-nt will partlr?ipate in the Summit
Meeting of indu:;trialized ca-entries, to be held
Juno 4-6, 1932 at V :ers- illcs France. The ;.37urpose
of this :w-mooram'u:n is to assign responsibility for the
pr*par. at ion of briefing r:ratnrials to be included in
the President's briefing he k. Car the S :^riit; ~Le
/ttachment I.
The guiding principins for all Sun. i.t ter infi-aq
rateria1 are hr?vity, cl?iri::y and , ros-t inportantiy,
relevance to the issues -z^d 1~.e1 of Dra,ter3 'Should be Ly
Gf ' SSt;eS 5: 3ch the i eat :'?~3t? s c3 lea t:t?s :-,;y r3= se,
and provide appropriate r??s_ nor ses. Dr3`ters _'iou i 3 3ix0
seek to i-Sure that t e P:.si