HSG - Keynote Address by Under Secretary Robert Hormats

Foreign Economic Policy, 1973-1976
Keynote Address by Under Secretary Robert Hormats
George Mason University School of Public Policy, Arlington, Virginia
March 7, 2011

• MODERATOR
• Ed Rhodes, Dean, George Mason School of Public Policy
• PARTICIPANTS
• Dr. Robert Hormats, Under Secretary of State for Economic, Energy, and Agricultural Affairs
• Dr. Kathleen Rasmussen, Division Chief, Asia & General, Office of the Historian

"...So we had this constant ring of various complicated issues during this period. And during this period I was economic advisor to Henry Kissinger, so I sat in on almost all the discussions that focused on all these issues and was constantly sending him memos on the various issues that are described in this book. Moreover, during this period, one of the things that we had in mind was that the industrialized countries should work more closely together with one another and therefore came up with the idea toward the end of 1975. And it wasn’t initially an American idea; it was really the idea of Chancellor Schmidt and French President Giscard d’Estaing to get the industrialized countries together to discuss how do we deal with the oil issue, how do we deal with the exchange rate issue, how do we deal with the trade issue, was there a view on the developing country problem.
And initially the idea was for the French to call the meeting, and they – which they did. The Germans would come, the Brits would come, the Americans would come. Japan – they were a little unsure whether Japan could come because Japan was sort of an outlier at that point. But it was a big economy, it was second-biggest in the world, and therefore there was a general conclusion Japan should come and would have to be there. But Japan was very reticent about playing much of a global role. So it wasn’t – it knew it had to come, but it really was a little bit shy about being as pushy on some of these issues as the French or the Germans or the Americans or the Brits were.
And then there was the question of Italy. Originally, it started out as the G-5, not a G-6 or certainly not a G-7. And why did Italy get in there? The Italians got in because there was – and we tend to forget this, but there was a very strong communist movement in Italy at the time. They got a third of the votes. It wasn’t a Moscow kind of communist party, but there were communists nonetheless, and it was the middle of the Cold War. So Prime Minister Moro, who was prime minister of Italy, made an impassioned plea to the United States and to Germany and to France to get in and be part of it because if the West did demonstrate support for him, he would be weaker in dealing with the communists. Well, the French weren’t quite sure they wanted Italy in there. They didn’t have a very favorable view of the Italian economy at that point. But the United States, again as sort of the champion of the Western Cold War – and the Germans, I must say – insisted on Italy coming. So Italy – Prime Minister Moro was invited. He, unfortunately, was killed by radicals and found in the trunk of his car about three months afterwards, so – but Italy did get in and has been a member ever since.
Canada – the French vehemently opposed Canada, did not want Canada in. We tried everything we could because we didn’t it to be so pro – so Europe-centered. So we supported having Canada in, and the French refused to invite them. But the U.S. got its revenge because the following year, when we had the summit in Puerto Rico, the U.S. unilaterally invited the Canadians, and the Canadians have been members ever since. And then it became the G-7...."



Audio: http://media.state.gov/2011/03/FEP_Under_Secretary_Hormats_Keynote.mp3

Source: http://history.state.gov/conferences/2011-foreign-economic-policy/hormats