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Onward from Ottawa

July 23, 1981



The economic summit conference in Ottawa proved to be no exception to the general rule that the most meaningful discussions go on behind closed doors. There were said to be "brutal discussions" among the seven attending industrial nations. This suggests that the leaders of Britain, Canada, France, Italy, JApan, West Germany, and the United States really let their hair down, spoke frankly about their problems, and took each other's mea sure. Inasmuch as this is no longer a world in which every country can go its own independent way but must learn to work in tandem with neighbors, there is little doubt that periodic conferences bringing world leaders together in this way are useful if not indispensable.

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Predictably, a bland final communique did not reflect the depth of disagreements among the participants. There was unity on the pledge to revitalize the industrialized economies. There was also a consensus on such broad and commendable objectives as helping the impoverished nations of the world, fostering free trade, and being mindful of the impact of each country's economic policies on others. But clearly there remain divisions over solutions to such common problems as inflation and unemployment. The leaders held to their own convictions, driven by the domestic pressures in their own nations.

This is not to say they necessarily could or should have come up with hard-and-fast remedies. It might be recalled, for instance, that at the summit meeting in London in 1977 Chancellor Helmut Schmidt of West Germany agreed to stimulate the economy -- a move which subsequently led to higher inflation in his country.

In Ottawa the hue and cry was largely about the high interest rates in the United States, which the Europeans complain are undermining their programs for spurring economic growth and alleviating unemployment. Yet a persisting high inflation rate in the United States is hardly in their economic interest either. President Reagan cannot be faulted for trying to bring inflation under control, and the Federal Reserve Board's tight money policy appears to be succeeding in braking the economy and slowing down inflation. While the European impatience is understandable, therefore, Mr. Reagan is right to have stuck to his guns and to have resisted a change in his monetary policy.

The United States, for its part, needs to show more understanding on another contentious issue, one of importance to West Germany: the plans to build a pipeline to import natural gas from Siberia. The argument that no European nation should become dependent on the Soviet Union for a key resource is a persuasive one. The question is what constitutes dependence and what other choices there are. West Germany needs natural gas and the Soviet Union has an abundance of it; a mutually advantageous exchange of technology for gas is sensible so long as the West Germans are prepared to deal with a cutoff should one ever occur.

The fact remains that the US proposes no practical alternative to the German-Soviet deal. Furthermore, it strikes the Europeans as inconsistent for the US to argue against certain types of trade with the Russians when it so peremptorily lifted its own grain embargo against Moscow.

What Ottawa showed, in short, is that no nation is about to alter a course it sees as in its best interests. The most that can be expected is that the partners of the industrialized world act with a knowledge of and sensitivity to each other's problems and strive to move in the same general direction. To the extent that the get-together at Chateau Mon tebello helps them do this, it will be counted worthwhile.