Wednesday, April 17, 2013

Monetary gold wikileaks - 1973PARIS06020_b

FOR EUR/ WE

FUNDAMENTAL REFORM OF THE INTERNATIONAL MONETARY SYSTEM. THE BRETTON WOODS SYSTEM SERVED THE WORLD WELL FOR 25 YEARS, BUT RADICALLY CHANGING CIRCUMSTANCES, IN PARTICULAR THE EMERGENCE OF NEW ECONOMIC POWER CENTERS RIVALLING THE UNITED STATES IN IMPORTANCE, HAVE CAUSED IT TO BREAK DOWN. WE ARE NOW ENGAGED WITH OUR PARTENERS IN THE IMF IN TRYING TO BUILD A NEW SYSTEM WHICH WILL LAST AT LEAST AS LONG AND SERVE OUR INTERESTS AT LEAST AS WELL AS THE BROTTON WOODS SYSTEM.

11. THE UNITED STATES HAS MADE A NUMBER OF CONSTRUCTIVE PROPOSALS WHICH WE BELIEVE WILL MAKE A NEW MONETARY ORDER POSSIBLE. SOME OF THESE PROPOSALS HAVE BROUGHT US INTO DISAGREEMENT WITH THE FRENCH.

FOR EXAMPLE, WE BELIEVE THAT COUNTRIES THAT RUN LARGE BALANCE OF PAYMENTS SURPLUSES HAVE AS MUCH RESPONSIBILITY AS DEFICIT COUNTRIES FOR RESTORING EQUILIBRIUM TO THEIR BALANCE OF PAYMENTS. THE FRENCH, WHILE THEY HAVE MOVED SOMEWHAT CLOSER TO OUR POSITION, CONTINUE TO BELIEVE THAT PRIMARY RESPONSIBILITY RESTS WITH THE DEFICIT COUNTRY.

LIKE THE FRENCH, WE BELIEVE THAT THE NEW SYSTEM SHOULD BE BASED ON A REGIME OF STABEL EXCHANGE RATES. BUT ALSO WE BELIEVE THAT THESE CENTRAL RATES CANNOT BE DEFENDED AGAINST SPECULATIVE PRESSURES UNLESS THERE IS MUCH GREATER FREEDOM TO CHANGE THESE RATES THAN IN THE BRETTON WOODS SYSTEM EVEN, IN CERTAIN SITUATIONS, THE FREEDOM TO FLOAT. FOR THE FRENCH, ON THE OTHER HAND, THE LESS MOVEMENT OF EXCHANGE RATES, THE BETTER. FINALLY, WE BELIEVE SOME MORE SATISFACTORY ASSET THAN GOLD, WHICH IS SUBJECT TO UNCERTAINTIES OF PRODUCTION AND TO SPECULATIVE BUYING, SHOULD BECOME THE CENTRAL POINT OF REFERENCE OF THE MONETARY SYSTEM OF THE FUTURE. WE BELIEVE, IN OTHER WORDS, THAT THE IMPORTANCE OF GOLD IN THE SYSTEM SHOULD GRADUALLY DIMINISH AND THAT THE SPECIAL DRAWING RIGHT SHOULD BECOME THE CENTRAL POINT OF REFERENCE. FRANCE, ON THE OTHER HAND, BELIEVES THAT GOLD SHOULD CONTINUE TO PLAY AN IMPORTANT ROLE IN THE SYSTEM.

12. UNITED STATES INTERESTS IN THE TRADE FIELD ARE CLOSELY LINKED TO THE PREPARATIONS WHICH ARE NOW IN PROCESS FOR A MAJOR NEW ROUND OF MULTILATERAL TRADE NEGOTIATIONS SCHEDULED TO BEGIN LATER THIS YEAR. WHAT THE UNITED STATES WANTS FROM THESE NEGOTIATIONS IS A SUBSTANTIAL REDUCTION OF EXISTING BARRIERS, BOTH TARIFFS AND NON- TARIFF BARRIERS, TO WORLD TRAJE IN BOTH INDUSTRIAL AND AGRICULTURAL PRODUCTS. WE ARE PARTICULARLY INSISTENT THAT AGRICULTURE, WHICH WAS FOR ALL PRACTICAL PURPOSES EXCLUDED FROM THE KENNEDY ROUND NEGOTIATIONS, BE INCLUDED IN THE NEXT ROUND. THE UNITED STATES IS ONE OF THE MOST EFFICIENT PRODUCERS OF AGRICULTURAL COMMODITIES IN THE WORLD, AND WE BELIEVE THAT THE BARRIERS TO AGRICULTURAL TRADE WHICH HAVE BEEN EREDTED BY THE EUROPEAN COMMUNITY ARE MAKING IT IMPOSSIBLE FOR US TO REALIZE THE FULL BENEFITS OF OUR COMPARATIVE ADVANTAGE IN THIS FIELD. I HASTEN TO ADD THAT WE ARE NOT TRYING TO DESTROY THE COMMON AGRICULTURAL POLICY OF THE EUROPEAN COMMUNITY AS SOME EUROPEANS SEEM TO THINK. BUT WE BELIEVE THAT THIS POLICY CAN BE OPERATED IN WAYS THAT MAKE IT LESS HARMFUL TO THE INNTERESTS OF OTHER COUNTRIES. IT IS PRINCIPALLY OVER THE QUESTION OF LIBERALIZING TRADE IN AGRICULTURE THAT WE HAVE THE GREATEST DIFFERENCE WITH FRANCE. FRACE IS THE PRINCIPAL BENEFICIARY OF THE COMMON AGRICULTURAL POLICY OF THE EUROPEAN COMMUNITY, AND IT BELIEVES THAT ITS OWN INTERESTS ARE THREATENED BY OUR EMPHASIS ON LIBERALIZATION OF AGRICULTURAL TRADE.

13. WHAT ALL THIS MEANS IS THAT THE PROMOTION OF U. S. ECONOMIC INTERSTS IN FRANCE OVER THE NEXT YEAR OR TWO WILL CALL FOR A VERY CONSIDERABLE EFFORT TO BRIDGE THE GAP BETWEEN OUR RESPEC- TIVE POSITIONS ON MONETARY AND TRADE QUESTIONS. WE MUST SEEK TO RESTORE THE LARGE IDENTITY OF VIEWS BETWEEN OUR TWO COUNTIRES WHICH WAS A MAJOR FACTOR IN THE BRIALLIANT RECORD OF INTERNATIONAL ECONOMIC COOPERATION IN THE FIRST TWO DECADES FOLLOWING WORLD WAR II. THIS EFFORT WILL REQUIRE THE FULL USE OF ALL THE EMBASSY' S RESOURCES. WE MUST SUPPORT AND ANALYZE FRENCH POLICIES ON TRADE AND MONETARY QUESTIONS AND WE MUST EXPLAIN AND SEEK SUPPORT FOR U. S. POLICIES FROM THE FRENCH GOVERNMENT AND PUBLIC. IN OTHER WORDS, WE MUST MAINTAIN A SUSTAINED DIALOGUE WITH THE FRENCH NATION. WHILE THE DIFFERENCES BETWEEN US SOMETIMES SEEM GREAT, I AM PERSONALLY OPTIMISTIC THAT THEY WILL BE OVERCOME IN THE END, FOR I BELIEVE THAT THE THINGS THAT UNITE US - A COMMON POLITICAL HERITAGE AND CULTURAL TRADITION, A COMMON CONCERN FOR THE SECURITY OF THE ATLANTIC COMMUNITY, AND AN ALOMOST EXTRICABLE INTER- INDEPENDENCE OF ECONOMIC INTERESTS - ARE INFINITELY MORE IMPORTANT THAN THE THINGS THAT DIVIDE US.

14. I HAVE LEFT TO THE LAST WHAT IN MANY WAYS IS THE MOST IMPORTANT UNITED STATES ECONOMIC INTEREST IN FRANCE, THE PROMOTION OF U. S. EXPORTS OF GOODS AND SERVICES. EXPORT PROMOTION IS AN ACTIVITY TO WHICH THE UNITED STATES GOVERNMENT HAS ASSIGNED THE VERY HIGHEST PRIORITY. THE TASK IS A PARTICULARLY CHALLENGING ONE HERE IN FRANCE, THE FIFTH LARGEST MARKET FOR AMERICAN GOODS, BECAUSE, WHILE OUR EXPORTS TO FRANCE HAVE BEEN RISING YEAR AFTER YEAR IN ABSOLUTE TERMS, OUR SHARE OF THE FRENCH MARKET HAS BEN SLOWLY DECLINING. CONSEQUENTLY, I EXPECT TO DEVOTE A LARGE PART OF MY TIME AND ENERGY TO EXPORT PROMOTION. I VIEW THE AMERICAN BUSINESS COMMUNITY AS A DIRECT PARTNER IN THE JOB OF SELLING AMERICAN GOODS IN FRANCE, AND I WANT TO ASSURE YOU THAT IT WILL CONTINUE TO HAVE THE FULL SUPPORT OF THIS EMBASSY. FOR EXAMPLE, I INTEND TO MAINTAIN THE TRADITION OF REGULAR INFORMAL MEETINGS WITH REPRESENTATIVES OF THE BUSINESS COMMUNITY, AT WHICH MY STAFF AND I SHALL TRY TO KEEP YOU POSTED ON CURRENT U. S. POLICIES AND TO SEEK YOUR ADVICE ON CURRENT DEVELOPMENTS IN FRANCE AND EUROPE. IN ADDITION TO THESE PERIODIC MEETINGS, I INTEND TO CONTINUE MY PREDECESSOR' S OPEN- DOOR POLICY TOWARD THE AMERICAN COMMUNITY. SO THAT YOU CAN FEEL FREE TO CALL ON MY STAFF AT ANY TIME TO DISCUSS PARTICULAR PROBLEMS. IN A SENSE, ALL OF YOU ARE AMBASSADORS, FOR ALL OF YOU ARE CALLED ON FROM TIME TO TIME BY YOUR FRENCH FRIENDS TO EXPLAIN OR INTERPRET AMERICAN POLCIES WHICH THEY FIND PUZZLING OR EVEN UNFRIENDLY. I HOPE THAT THRE FRANK OPEN EXCHANGES WITH THE EMBASSY WILL HELP YOU CARRY OUT YOUR AMBASSADORIAL ROLE.

15. AND, NOW IT REMAINS ONLY FOR ME TO THANK YOU FOR YOUR GOOD WISHES AS I EMBARK ON THIS DIFFICULT AND CHALLENGING NEW ASSIGNMENT. IT IS REASSURING TO KNOW THAT YOUR COLLECTIVE WISDOM AND EXPERIENCE WILL BE AVAILABLE TO ME, AND I EXPECT TO CALL ON YOU OFTEN FOR COUNSEL AND GUIDANCE. KUBISCH

Source: https://www.wikileaks.org/plusd/cables/1973PARIS06020_b.html

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