THE U.S. AND GLOBAL NEGOTIATIONS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP95B00915R000500110033-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 2
• Document Creation Date: December 15, 2016
• Document Release Date: May 16, 2003
• Sequence Number: 33
• Publication Date: December 16, 1981
• Content Type: TRANS

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Approved For ase 2003/06/20: CIA-RDP95B0091
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Item from THE WALL STREET JOURNAL, page 26.
By Serft LIPSKY
NEW YORK?The United Nations is
edging toward the launch of its long-sought
"global negotiations." These would be the
-grandest of all talks between the rich na-
tions of the "North" .and the poor lands of
the "South." The Third World is eager for
the talks, and Japan and Europe are will-
ing. But a skeptical Reagan administration
?is still debating whether it wants . to go
along with a set of talks the ideology be-
hind which it regards as hostile to Ameri-
can interests. A resolution to proceed could
come an for a vote in the UN soon.
Oath?o lir; decision, however, a
confidential rile11:19At the Central Intelli-
ereaceeargeortyl-s raising some troublesome
questions about one of the more sensitive
aues surrounding global negotiations?
whether the talks could lead to an erosion
of the independence of the World Bank and
the International Monetary Fund. Many
believe that the developing lands want to
use these talks to lift into the UN General
Assembly, where each country has one
vote, some, decisions previously left to the
Fund and the Bank, where countries vote
according to how much money they've paid
in:.
??
The issue is exceptionally important, in-
volving the question of who would?and
should?control the strategic decisions on .-
how these agencies parcel out. billions..of -
dollars a year. in Western development aid
and balance-of:payments loans. The Third
World is pressing for a greater say at a.
time when some donors, the U.S. in partic-
ular, are complaining the Bank and the -
'Fund are already too lax.
America's position is clear: President
Reagan. at Cancun last October, made it a
condition of U.S. participation that global
talks respect the integrity and competence
of the specialized agencies. The CIA's re-
port doesn't suggest the UN has any legal
power to take over the international finan-
cial institutions. But the CIA raises ques-
tions about whether the independence of
the Bank and the Fund could be guaran-
teed in the political sense, once global ne-
gotiations got rolling, arid suggests the U.S.
is likely to get little help from its fellow
members of the industrialized World.
Failure Would Isolate America
2?.D.dii
16 Dec 81
tern No. 2
Ref. NO.
e otiations?
? U.S. ought to jointhe global talks, though
the CIA itself doesn't appear, on the basis
of the memo, to be a partisan in the inter-
nal administration debate. A failure to join
? global negotiations, Mrs. Kirkpatrick and
others have argued, would isolate America
from friends in Europe and Japan, as well
? as the Third World. She has sought to ne-
gotiate procedures that ensure Washington
? a veto over any turn the talks might take.
The CIA's assessment, dated December
1931. suggests the developing lands might
be receptive. "The Third World," it says,
"appears ready to compromise utopian
plans for restructuring the world economy
and accept negotiations that would provide
procedural protection for the competence
of the World Bank and the International
? Monetary Fund."
Yet change in the Fund and the Bank is
e certainly .an aim of the Third World. The
CIA report lists five separate Third World ,
goals in this regard.
One is to expand resources available for
lending to the developing lands by permit-
..
ting the .World Bank to guarantee and the
IMF to co-finance private bank loans. A
second is to link the creation and allocation
of the IMF's special drawing rights to the
ea development needs of poor countries. A
'third is to steer more Ilk,LP lending to the
Third World by easing the stiff require-
ments the Fund imposes on borrowing gov-
The U.S. ambassador to the UN, Je.ane
Kirkpatrick, who conA-aaied- dgdtlFoVtel
ns.ses,strii..rit and subniitrr y
it ast, wee.<
the National Security Council, apparently
contention that the
A skeptical administra-
tion is still debating whether
it wants to go along zz,sith
talk's....it regards as hos-:
tile to American interests.
ernments. A fourth is to boost the Third
World's participation in Bank and Fund de-
cisions by changing the current system
that ties a country's voting strength to its
financial contribution. The fifth is to set up
a special World Bank affiliate to fund
Third World energy projects.
Though it hasn't spoken specifically on
eation
probtiMMtsue77,W.W. P911%1
The CIA report includes a chart showing
how our allies come- out on the Issues-.
Italy. for example. sides with the Third
World on each issue. while France and
Canada tilt to the South side on every issue
? but giving developing lands a bigger vote -
in the Bank and the Fund. West Germany ?
favors expanding resources, relaxing con-
ditionality and setting up a World Bank en-
ergy affiliate, but . opposes the special- .
drawing-rights link and the change in vot-
ing strength. Japan and Britain side with
the U.S. on all issues but the World Bank,
energy affiliate, which they favor;
Commenting on their positions, the CIA
report says France is "philosophically
committed to economic reform" of the
type proposed by the UN group; ? Canada
seeks a "leadership role in negotiated re-
form"; West Germany believes in some re-
form but 'will not take a leadership role";? ?
Japan "will support cosmetic reform to en-
hance credentials with the Third World";
Britain is skeptical but the other Europe-
arts may "moderate the UK position"; and
Italy thinks "reform will promote North-
South co-operation without endangering in-
stitutions." -. ?
In short, it doesn't look like a group sol? -;
. idly behind the U.S. position, even in the
privacy of a CIA memo. Most nations, the
? CIA notes, have. given the Third World po-
litical support within the UN but have
maintained "basically conservative" poSI-
'tons in the international financial institi
tions. negotiations," it say.
"could be the catalyst that impels indwi
trializ,ed 'countries to make a political deci-
sion on whether they wish to transforo
their reformist sentiment into concrete a:?
tion."
Making Reform Political
The Third World bloc, says the CIA, w'd
use global negotiations "to pursue its striv.-
egy of making reform of the internation.n
financial institutions a political as much ;es
an economic question," pressing the Gea-
eral Assembly to issue guidelines and rec-
ommendations to the specialized agencies
that conform to a "world ec000mtc devel-
opment plan." And the developing lands
will press the industrial nations to commit
themselves early on in global negotiations
to "reform the financial institutions." It
5R011058-01%033,se: Canada will take the
lead in mobtlifing "the latent support for
reform."
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