To seize the day
What next for the North-South dialogue? Little came out of the Cancun meeting of heads of state. An eight-page official ''summary'' of the meeting contains a lot of upbeat language on a new spirit of trust, understanding, and forward momentum. But on the controversial issues of trade, commodities, and access to financing, the summary gives not the slightest hint of new areas of consensus or new flexibility that might enable an accommodation of views in future negotiation settings. Where does one look for new avenues of accommodation?
The United States has now positioned itself as the leading Western advocate of freer trade and the promotion of more private-sector involvement in development. Both policy areas offer real possibilities of mutual benefit, and the developing countries should press the US to turn its words into actions.
The US has also vigorously defended the international financial institutions, arguing that they can be made capable of responding adequately to financing needs in a changing world economy. Yet the Reagan administration has so far shown more suspicion than respect for the borrowing and lending practices of these institutions.
If the administration's Cancun position is to be credible, the US must, at a minimum, make good on existing commitments to IDA - the soft-loan window of the World Bank. An American President able to strong-arm the AWACS sale through Congress clearly has the political clout to win support for $820 million in concessional aid, especially when this year's US contribution may make the difference between continuation or termination of the main aid program for the world's poorest countries. Developing countries would be right to view active leadership by the President on IDA funding as a test of the ''spirit of Cancun.''
Other OECD countries broke ranks with the US at Cancun on financing issues. Both West Germany and France expressed support for the establishment of a new energy affiliate of the World Bank, despite strong US opposition. These governments, which are not bogged down by the same strong public and legislative opposition to foreign aid in general and the World Bank in particular as is the US government, could play a key role in finding new ways to combine public and private participation in development financing.
Helping to accelerate development and thereby expand markets throughout the third world is a better way for the Europeans to cope with the challenges to their economies that are posed by increased export competition of newly industrialized third-world countries than is a retreat to protectionist trade policies.
The developing countries, for their part, ought in their own interests to make a dramatic change in tactics and seize the opportunity which the current US and European positions offer them. Specifically, they ought to take advantage of a US administration philosophically committed to free trade to press for substantial movement under the auspices of GATT on negotiation of a safeguards code, liberalization of agricultural trade, and an improved multifiber agreement.
They ought also to accept the US formula for global negotiations. That formula would begin, really for the first time, a practical North-South dialogue in the institutions that matter most to the multilateral management of international economic relations - the World Bank, the International Monetary Fund, and the GATT.
Developing countries have been opposed to this approach because they do not account for a majority of votes in these institutions. The decisionmaking issue which they have raised is, however, a broader one than distribution of votes. It involves as well the way governments participate in those institutions and the link between decisions and actions. A resolution adopted by the United Nations General Assembly has the power of recommendation; agreement reached in the World Bank or International Monetary Fund can alter to affect the flow of resources.
In the past the US has played successful ''coalition'' politics. Now is the moment for the developing countries to play a similar game - forging negotiating coalitions with the US on trade and the Europeans on finance and thereby working for significant movement on both policy fronts in the interest of the system as a whole as well as the prospects for accelerated development.
