Reagan stalls rich-poor talks on trade, aid, resources, fuel

"You have done to us by land what you did to us last month by sea," said a Latin American diplomat to the US delegation after the Reagan administration announced its decision to pull out of the North-South dialogue.

The United States effectively blocked the United Nations Law of the Sea Conference in April by pulling out just before the conference was about to begin its work in New York. Last week the US informed the United Nations General Assembly that it would not participate in projected global negotiations on trade , raw materials, energy, finance, and development until it had reviewed its position on these matters. This review is not expected to be completed before October. The latest US blow to the third world (and to a lesser degree to its Western allies) stunned the representatives of the world community at UN headquarters.

The North-South dialogue between industrial and developing nation's has not brought about a new economic order as the world's "have-nots" had hoped, but it has made some progress and led to some concrete results, advantageous to both rich and less-developed countries (LDCs), such as:

* The creation of a Common Fund aimed at stabilizing the prices of raw materials.

* The rescheduling (in the cases of some of the poorest countries, the canceling) of LDC debts.

Last fall, the dialogue ran into a snag when the US adopted a rigid stance on the competence and the mandate of a projected global negotiations conference. The industrial nations and particularly US wanted the negotiations on economic problems to take place in specialized agencies such as the International Monetary Fund (IMF), the General Agreement on Tariffs and Trade (GATT), and the World Bank, where they play a leading role. The LDCs wanted the conference to be responsible for all phases of the negotiations.

Baron Rudi von Wechmar, West Germany's ambassador to the United Nations and president of the General Assembly, managed to work out a compromise formula that proved acceptable to all member states except the US. It attempted to placate US fears that the UN might take over the IMF and dictate its economic policies to the US government.

Since the beginning of the year Baron von Wechmar has continued his consultations with representatives and high officials of two dozen countries (selected because of their regional or political importance or because of their wealth) and had hoped to hammer out an agreement before the summer.

Global negotiations would have lasted for several years in any event before producing concrete arrangements. The negotiations would have helped in the meantime to avoid acrimonious recriminations by the LDCs against the rich countries and might have helped to narrow the political and philosophical gaps between them. By including energy among the items to be negotiated, the LDCs had made a major concession to the industrial nations, which otherwise would not have agreed to discuss the other items.

A senior diplomat of a Western country admitted to being dismayed: "It is clear to us that the new [Reagan] administration, for ideological reasons, has decided to concentrate on the East-West rivalry and to ignore the South. We are now convinced that come the end of the year, having finished its review of its relations with the third world, the US will announce that it will not participate in the global negotiations. There is even some doubt as to President Reagan's intention to attend the summit conference in Mexico to be co-hosted by Mexican President Lopez Portillo and Austrian Chancellor Bruno Kreisky in October."

The Reagan administration has made no secret of its belief that US interests are best served by concentrating on bilateral rather than multilateral economic relations with the third world and by allowing US private interests rather than the US government to assist these countries.

High US officials have said more than once that they don't believe in silencing regimes hostile to the US. In fact, one US official privately told newsmen last week that "the Reagan administration will determine whether to aid a country or not according to the way it votes at the UN."

Most experts recognize, however, that private enterprises are not likely to invest in poor countries such as Bangladesh, Mali, Somalia, and others. "What this administration is really saying is that it intends to use naked power to further its interests in the third world; that sounds very much like Russia," said one Western diplomat.

The sudden US turn on the North-South dialogue not only surprised countries such as Venezuela, Mexico, Brazil, India, Nigeria, Pakistan, and Egypt, but also US allies.

Although West Germany, France, Japan, and Canada are not prepared to turn the existing international economic system upside down and their national wealth over to the poor, they do want to meet some of the needs of the LDCs and to pursue a productive dialogue with them.

"We do not despise the third world and we know that we need it just as it needs us. We shall now try to reason with the Reagan administration and persuade it to participate in global negotiations after all. But if we fail then, even though we don't like it, we would have to find ways to pursue the North-South dialogue without the US, perhaps through major regional agreements," says one Western treasury official.

"What is at stake in the North-South dialogue is not just economics. It is politics in the broadest sense, it is geostrategic stability," says West Germany's von Wechmar, who vows to pursue his efforts toward a dialogue in the face of a US snub.