Seeds at the Summit

The economic summit meeting at the Chaateau de Rambouillet outside Paris fulfilled the modest expectations. The heads of government of the U.S., France, Britain, West Germany, Italy and Japan pledged greater cooperation in managing their increasingly interdependent economies and agreed to fight vigorously against "high unemployment, continuing inflation and serious energy problems" without so much as hinting at any specific measures by which these grand goals might be accomplished. The reaction of many observers, and some aides to the government chiefs, was summed up by London's Daily Express, which dubbed the gathering "NonEvent of the Year."

But some work did get done at the meeting. Most significant was a cautious French-American compromise on money-exchange rates, looking toward more stability in world currency markets. The agreement had been under negotiation between the two countries for two months; it was wrapped up by U.S. Secretary of the Treasury William Simon and French Finance Minister Jean-Pierre Fourcade at a lunch in Paris in time to be approved by Presidents Ford and Valery Giscard d'Estaing at the summit.

Specific details of the agreement still have not been published, but its broad outlines seem to satisfy both the U.S. desire to continue the system of floating exchange rates, under which international supply and demand determine the value of currencies, and the French desire to avoid violent swings in currency values. France and other countries have argued that erratic ups and downs in money values discourage international trade and investment. The heart of the agreement is that central banks of the major industrial countries -how many is unknown -will establish a new system of daily consultations on exchange rates. If the banks determine that currency rates are swinging sharply and illogically, because of speculative activity, perhaps, they will buy and sell currencies in enough volume to stabilize the markets. But they will not move to stop exchange-rate fluctuations caused by obvious economic factors, such as different levels of interest rates in various countries.

Longerrange, to mollify the French, the U.S. agreed that some tune or another there should be a return to fixed rates, which -except in special circumstances -would oblige each nation to keep its currency at a specified par value. The French, for their part, set no deadline. Vague as all this sounds, the agreement holds at least some promise of calming world currency markets.

The summit participants also agreed on a resounding condemnation of protectionist measures that impede world trade, and pledged themselves by 1977 to bring to a fruitful conclusion the current round of world trade negotiations that is aimed at lowering tariffs and tearing down other barriers to the movement of goods across national borders. Americans had been concerned that the other heads of government might prod Ford to take the possibly inflationary course of speeding up the American recovery so that the U.S. would buy more foreign products. That fear proved unfounded. Said Secretary of State Henry Kissinger: "After the President explained our economic program, the other countries substantially accepted it." In sum, face-to-face discussions seemed to give the six leaders a better grasp of each other's problems.

This file is automatically generated by a robot program, so viewer discretion is required.