CONFIDENTIAL
International Credits
He
Senator Brock raised the issue of export credits subsidies. was ready to accede to the EC Commission request that the United States should "de-escalate its rhetoric" until the new French administration had settled in. But the United States felt strongly on the issue, and particularly the exorbitant French subsidy element. Only a few months' breathing space could, therefore, be counteranced. There had, perhaps, been some slight sign of movement by the French at his Paris meeting. But seeing was believing, and the United States would be watching the EC developments closely. He conceded that M. Jolbert would not have been his preferred opposite number. He also recognised that the Administration had, to an extent, created its own problem by limiting Eximbank funds. But it was possible that this decision would be reversed by the Congress, in which case any stiff retaliatory measures against the French would be all the easier. Nor were the French the only possible villans.
The Secretary of State felt that the United Kingdom was basically at one with the United States. It was important to try and avoid an export credit war, and agreed that the French should be allowed some breathing space to review their policy.
Shipping Policy
Lord Trefgarne enquired about United States shipping policy. We had been reassured by Senator Brock's comments to the Congressional hearing, but less so by the possible implications of the policy to end subsidies and maintain the size of the United States fleet.
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Senator Brock noted that there had been no policy change: indeed, there was yet no policy. He confirmed that shipping subsidies with every budget item were under close scrutiny, and that the Administration for defence reasons was committed to the merchant fleet. The Departments of Commerce, Defence and Transport all had an interest in achieving a "logical policy embracing intractable problems".
The United States delegation confirmed its concern that EC Member States should not ratify the OECD Liner Code. Lord Trefgarne explained the terms upon which the EC was prepared to adhere to the Code. He emphasised that whilst some Third World concessions were necessary, there was no question of protectionism between OECD
members.
Energy Price De-regulation
The Secretary of State asked about progress towards de-control of natural gas prices. Senator Brock explained that the present law provided for phased de-control by 1985. The Administration was committed to bringing forward this date. It was logical and imperative to get to a market price, but it would involve a tough political fight. No decisions had been reached, but one could hope for de-control by end-1983; end-1982 might be possible.
CONFIDENTIAL
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