PM
Ladies and Gentlemen, may I say a few words first about the Cancun Conference. I think it has been a very successful Conference. I am not surprised that it has been successful because I thought that all of the people coming here would have a great will and desire to have a successful ending to it. I thought it was a great achievement to have the Ronald ReaganPresident of the United States come and I felt certain that once he had decided to come, he too would want a successful ending to the Cancun Conference. I think we have learned a great deal from being together. We have a much closer understanding of one another's problems, not only we of their problems, but they of some of the problems of the Western industrialised countries, particularly our problems of inflation and unemployment. And we are the first of course to say that it helps them if we defeat the problem of inflation because then they don't have to pay such high prices for the goods they import from us. They know then that we would be likely to have more resources with which to help them. There has also been a good deal of emphasis on the importance and significance of trade. Because in financial terms trade flows are far more important than aid to many many countries. You have seen the summing up by the Co-Chairman of the result of the Conference and I think, three things, if I might select to make one brief comment on: first, the negotiations on, global negotiations, go back to the United Nations. One of the problems of the term “global negotiations” is that it means different things to different people, and that was abundantly clear from the discussions, and so the precise meaning and procedure will have to be worked out by mutual agreements. But it will be in the forum which the less-developed nations wanted, namely the forum of the United Nations. Although I believe that the conditions which I set in the Opening Speech and which were echoed by a number of other people, namely that the specialised agencies—the World Bank and the IMF and of course the GATT—should not be compromised in any way and that their independence should remain intact. Secondly, there was a good deal of discussion about the possibility of an energy affiliate to the World Bank. There's not much point in setting one up just for the sake of having one—we agreed [end p1] that provided that more resources would be forthcoming by means of an energy affiliate to enable the less-developed countries to have access to capital to develop new energy resources, then it would be advisable to set up a new energy affiliate. And the third thing which I thought came out very vividly was on the food and agriculture debate. It was very very obvious that most of the poorest countries, though they might need food aid in emergency circumstances or as a temporary matter, they much preferred help to be given by ways of assisting them to develop their own agriculture. And they made it very very clear they did not want to be dependent for very long on food aid. Now those are three comments that I would make. I think the whole atmosphere of the Conference was positive but also very tactical and also very willing to try to reach agreement between people who represented very different view points. I thought that President Lopez Portillo is to be warmly congratulated both on convening the Conference and on the way which the Conference was handled—it was superb. We were delighted with those two Co-Chairmen—he is of course a very experienced Co-Chairman and of course has had the advantage of previous discussions on these matters, as a number of us had had at Ottawa. We have been particularly lucky in Britain in that we have discussed these matters in several fora before coming here. We discussed them in the European Community, we discussed them in the Ottawa Economic Conference, we discussed them in the Commonwealth Conference—so we were familiar with many of the problems when we came to Cancun. So, a success I believe and great congratulations both to the President of Mexico and to Prime Minister Trudeau.
Now Ladies and Gentlemen—your questions.
Q
(about global negotiations and the timescale).
PM
Well, there is no specific programme. As I indicated earlier, the term “global negotiations” does in fact mean different things to different people. And that had emerged very clearly from some previous Conference which I had attended. Some people wanted it to include things like the World Bank and the IMF and GATT. Most of us realised it could not possibly include those bodies because they are totally independent and have their own competence. And so the precise terms and procedures have yet to be agreed. [end p2]
Q
Prime Minister, did I understand you to say that everybody, including the United States, agreed on the energy affiliate providing there were resources provided for? We understood that the American position was firmly against the energy affiliate on any basis.
PM
No. I laid down very firm markers in my own speech because there is no point in having one unless it will provide more funds. So as far as I am concerned the proviso is that it will get more funds by virtue of that organisation than it would be without it. (interruption) … please may I finish the answer first? And you will see, therefore, that the summing up is that an energy affiliate was advocated and that is just about the right summing up.
Q
Continuing about the energy affiliate …
PM
No, we're not that kind of body. We were twenty-two miscellaneous nations brought together by the invitation of the President of Mexico and Chancellor Kreisky. We are not and could not be a decision-making body. All we could do was to give a lead in directions which would repay further study.
Q
Could you tell us Prime Minister what instructions you will now be giving to your representatives at the UN on global negotiations? Are you likely to be nearer the French position of wanting to be able to start without delay or nearer the American position of preparatory talks only on straight conditions?
PM
Well if you look at the actual summing up, in the Communique, you will, not the Communique, the President's summing up, you will see that the basis has yet to be agreed and obviously the talks will be about that first. I made my position, if you look at my speech, very clear indeed.
Q
But what instructions will you be giving to your representative at the UN?
PM
I shouldn't dream of issuing instructions to my representatives.
Q
Prime Minister, in your opening statement to the Conference, again just now, you indicated the importance you attach to giving [end p3] greater assistance to the developing countries to develop their own agriculture rather than food aid. And the same point is made very strongly in the summing up by the Co-Chairmen. Can you give an indication of what more Britain is now willing to do to provide precisely that kind of assistance. We hope, many of us, that it will be in terms of additional resources but if not greater emphasis within our existing aid programme for help of that kind.
PM
Well it is the emphasis within your existing programme and the direction in which it goes. This last year I think we provided £50 million on food aid. There were specific reasons why a good deal of food aid was wanted this year. And I did say when we were talking in the Conference that its people there who must say to us what they want and then we have to consider which project to support. But certainly I think after the Conference we would regard the help to agricultural development as more important than help to food aid. Although I am the first person to know if there is a disaster, or for example Tanzania has had quite a bit of food aid, then she had a flood one year, a drought a second, a drought a third year—under those circumstances there's not much doubt about what you have to do. But it's merely a question of them putting up projects and then we allocating funds within the amount of our programme that goes to help the poorest nations, and quite a large amount of our bilateral aid goes to the poorest nations … (interruption) No, we are not talking about additional aid.
Q
The people in the working countries want global negotiations with a view to …
PM
Now these are very very vague terms. Global negotiations are vague terms. New international economic order—vague terms. The precise meaning has yet to be worked out and it is clear from the Co-Chairman's summing up: “Heads of State and Government confirm the desirability of supporting at the United Nations a consensus, which of course means unanimity, to launch global negotiations on a basis to be mutually agreed and in circumstances offering the prospect of meaningful progress.” I think this is one of the problems particularly in this sphere. People get hold of jargon phrases. They do not in fact work them out precisely. [end p4] Now after years and years of both scientific and legal training I believe in working things out precisely. And at some of the previous Conferences which I have attended it became painfully obvious that different people did mean different things by these two phrases and precisely what can be done has to be worked out. What the developing countries wanted was for it to be worked out in the forum of the United Nations but what a number of us were equally clear about was that the competence of the specialised agencies, each which have their own governing bodies, could not be compromised in any way. And they received requests to consider things but they could not receive instructions.
Q
One of the things that seems to have emerged from this Conference is the leadership of Mexico among third world nations. Do you welcome this development in world politics?
PM
I welcomed the idea to call a Conference. I think the idea, the inception of the idea, has been abundantly justified by the success of the Conference which has just concluded.
Q
Prime Minister did you hear anything over the two days of this Conference that was to you [word missing] or out of character or …?
PM
I heard nothing which surprised me very much.
Q
Mrs. Prime Minister, do you truly believe that the spirit of nations can overcome the vices that individuals have been unable to overcome that is the ego [inaudible] and the [inaudible] of the weak?
PM
I am sorry I wouldn't really agree with the premise of your question. We live very much in a real practical world. Each nation has problems but in a way the prosperity of us all depends in some measure on the activities in the other nations and its in that spirit that we approach these. You can never overcome human nature and any policy that tries to will fail. Because every policy in the end works through human beings with their strengths and their weaknesses. And you are most likely to get the best policies when you work not for things like new international economic order or global negotiations or anything like that—they work so that their families may have a better start than they did. And [end p5] it will be very advisable to take that factor into account in fashioning national and international policies.
Q
Prime Minister you and the other Heads of Government discussed the need to resist protectionist pressures yet while we are here we have learned that £30 million of British aid is being used to secure a contract for British firms. That seems to be a kind of protectionism because it is stimulating trade by artificial means. It is certainly not the magic of the market place which President Reagan [inaudible] in Philadelphia—what I want to ask you is what is your view on the use of aid money for such purposes?
PM
Well if that's a question, then your earlier comments are irrelevant. But I will nevertheless comment upon them. Almost every single nation there has tariffs and quotas. Every single nation there realises it. In GATT we tried to reduce the tariffs by mutual agreement and as you know the last Tokyo round of GATT talks—some of the tariffs have not been reduced as fast as they should have been. And one of the points we made is that an open market has to be a two-way business and as the weaker countries become stronger, and when they become stronger, they too have to open up their markets more than some of them do at the present moment. Every person there would have accepted, as we did at the Commonwealth Conference, we had the same debate, but every country has tariffs and quotas because every country has structural problems of adjustment. We have some tariffs, we have some quotas. We shall renegotiate our multi-fibre agreement. We need to. Nevertheless the developing countries have increased in textiles for example, their access to our markets from 18%; to 28%; of the actual market, in the last few years. So we have come to some kind of compromise. It's astonishing how open some of the western countries, through a recession, have remained to products from the developing countries. We do that because we recognise that if we are to sell machinery and they are to develop they must have outlets to trade. So never go in absolute in these things because its terribly wrong to do so. And none of us do. I had a list with me of the tariffs practised by each and every nation—very interesting indeed. Now comes the latter part of your question. Almost every country uses some aid on major contracts. This is the reality of the world in which we live. The second reality is that in fact we like to use quite a bit of our aid in [end p6] order to help our employment at home. And that is extremely worthwhile and its done in a way in which we recognised at this Conference, it means that the aid is beneficial to the account of the recipient country it is also beneficial to the donor country. The recipient country gets the project cheaper, the donor country gets the jobs. That is exactly the kind of partnership which we wish to encourage and I hope that you will agree that to be abroad and to have got a project which was accelerated, and which I think we partly got because we were willing to go up to Mexico to sign it, and get the whole thing sorted out while I am here, to get 28,000 man years for a small amount of work, for a small amount of aid, is a very good use of aid for us and also a very good contract for the recipient country.
Q
(translation) Did you discuss the Belize question with President Lopez Portillo and did you discuss the question of British oil imports from Mexico, and thirdly what do you think about the Mexico energy plan?
PM
I thanked President Portillo for his support over the question of Belize independence. I did not discuss the question of British oil imports from Mexico because as you know commercial contracts have recently been signed, they did not come up. I did not discuss his particular World Energy Plan.
Q
… do you feel that you yourself have committed yourself to something more than the [inaudible] at Ottawa?
PM
No, we were committed virtually to what is in this summing up by virtue of a declaration of the Heads of Government in Europe which went slightly further than Ottawa. The precise wording is in the communique, the European Communique at Luxembourg.
Q
Prime Minister, its impressive and encouraging that so many leaders at the end of this Conference characterise it as a success. That was not the immediate impression that I think the vast majority of us had when we heard Portillo and Trudeau summing up last night. We looked in vain for the practical actions that Britain in particular came to this Conference hoping to secure. No agreement on an energy affiliate, no agreement on how you approach global negotiations in the UN, nothing in fact except one thing that wasn't [end p7] in the communique—President Reagan 's idea on [word missing?] farmers. Can you just explain to us a little further why you consider this Conference to be such a notable success?
PM
First because it was quite possible that we would not get agreement to go back to the United Nations yet on global negotiations. That agreement has now been secured and it is the forum in which further developments, further progress, will be made. With regard to an energy affiliate, it really came out almost exactly as I had said, certainly not everyone wished us to have one and therefore the summing up is that an energy affiliate was advocated. The phrase which I used in my opening statement, there have been suggestions for an energy affiliate in the world bank, assuming this will attract additional funds, which would not otherwise go to the World Bank, particularly from oil surplus countries, we will gladly support it. If that assumption is not correct we need to find different methods of achieving that objective. There's no point in having one unless it will attract surplus funds or funds that would not otherwise go to the World Bank and for that further investigations need to be made. But there's no point again in cottoning onto certain jargon phrases. The question is can we get practical improvements. Now that has to be worked out in the United Nations and on the energy affiliate we have to consider, with some of the other countries which might invest, whether they would put, if an energy affiliate was established, surplus monies or extra monies into that affiliate. And I would think that both of those are pretty practical conclusions.
Q
Prime Minister, you stressed the importance of trade and you said that you wanted to keep trade out of global negotiations, and within the competence of the [inaudible] agency GATT, can you give us any idea of whether the industrial countries, or Britain in particular, are planning to take any new initiatives within the GATT, and what might come out of a Ministerial meeting next year?
PM
No. Much too early to say, but one of the problems at the moment as you know, is that there are tendencies for greater protection. This partly arises from a world recession and the fact that many of the countries which have hitherto kept wide open markets have considerable unemployment problems. I think that one of the great pluses of having Conferences, Summit meetings, of one kind or [end p8] another, is that between us we have been able to agree, that it is mutually beneficial in the end, to keep an open world trading system. And I think therefore that the fact of the Conference is, the fact of the meetings of Heads of Government, is that we have kept it more open than it would otherwise have been. But we for example are negotiating a new Multi-Fibre Agreement. But you have tough negotiations, we need to have tough negotiations, because we too have problems with adjustments, and we have lost a lot of textile jobs. And I know at one of the Conferences when we discussed these matters, one of the ones I have mentioned, then another jargon phrase was brought out, you know there must be a new morality in international aid and trade. One was bound to say, look when I go to some of my textile towns they are going to say to me what morality is there in Mrs. Thatcher putting us out of jobs? So morality is [inaudible] and those of us who attended it was that they understood some of our problems in this field and we understand some of theirs. You have to reach an accommodation. But undoubtedly when we have another GATT meeting there will be pressures for more protection. I think we shall have to resist them, but each of us, and I am the first to recognise this, does have a number of voluntary agreements, which we must have, to enable us to get through what is a very difficult period of adjustment. And really when we look at some of the tariffs which we face in trying to export our goods to other countries we really are, on the whole, very good indeed in preserving an open market. I'm sorry that's a long answer but it's a complicated problem.
Q
Prime Minister, do you think that the term “global negotiations” is vague, and that the developing has made it very clear what it means by “global negotiations” and …?
PM
You can't. This is one of my complaints. You get phrases like this. You will ask us about them. You get phrases like this. You don't know quite what they mean. We don't know quite what they mean. And everyone says we must have them. So you go back and look through the resolution of the United Nations. Look at a lot of the gloss that has put on that by the various groups, by Group 77 and then [inaudible] did last year, did a whole interpretation of what it meant, so there are now three or four interpretations of what it meant. Some say, well, it's a new international economic [end p9] order that includes everything, others say that it can't. So I cannot tell you the precise definition. Because one doesn't exist. And the United Nations resolution itself is very vague. So we have to look at precisely what the competence of, and standing of, those negotiations are.
Q
On the same subject of global negotiations, there were a number of British officials, quite senior ones, who said that they hoped this meeting would give a new impetus to global negotiations. They didn't define it at the time. They just said that they hoped that it would give, this meeting, would give it a push forward, do you feel that this has happened?
PM
Yes, because it is going back to the United Nations, to have certain things further defined. And there are one or two practical results which are, well, I think there are one or two more of us there will ratify the common fund. We have not yet ratified it. We shall hope to ratify it in Parliament this coming year. It's been a question, I'm afraid, of not really having Parliamentary time. Someone else said the same thing. And that again is a practical step. You could say its a part of global negotiations or a part of the things that will assist the developing countries. But the moment I heard this jargon phrase I started to ferret around and to see if there was a precise definition. There isn't. And I see journalist after journalist coming and asking us when do you think global negotiations will start and precisely what do you think they will include. And no-one knows because it is vague in the United Nations resolution. Nevertheless a number of things which affect the well-being of the developing world, and negotiations are of course taking place. There are various commodity agreements, there is the common fund, there are extensive negotiations in Lome which are of tremendous advantage to the developing countries. You might in fact say that those are a part, if not of global negotiations, but certainly of increasing attention by the developed countries to the lesser developed countries.
Q
Prime Minister, do you believe that the nations of the market place, the private enterprise, is the solution to the developing countries? [end p10]
PM
The market place and the free economy has undoubtedly led to a higher standard for the peoples in those countries which practice a free economy than for peoples in those countries which practice a closely centralised economy. Take Hong Kong as an example. The population has arisen from about 600,000 to about 4½ million over thirty years. Practically not a penny piece of subsidy from Britain and yet everyone there has jobs, and there has been a rising standard of living, a rising standard of housing, a rising standard of trade, Hong Kong, Singapore, South Korea, Taiwan. Those have followed this policy have undoubtedly a higher standard of living and indeed what I call the close-linked centralised countries often look with envy at the standard of living in those countries, in fact it is a freer economy and I have no doubt about it.
Q
… (bad English) by contacts between Foreign Ministers … .
PM
Well normally it is through the United Nations, you normally do it through your Ambassador to the United Nations. That is the normal way, the way in which it has been dealt with so far. I expect a number of us do keep in contact with, through the European Community, through the annual Economic Summits, our Commonwealth Conference we only have alternate years. But we are in pretty regular contact between Heads of Government and Foreign Ministers in any event, but at the United Nations you would normally expect the negotiations to be done between your permanent representatives.