World Economic Convergence Vital, Oecd Envoy Says

It is vitally important that the industrialised countries of the world work towards convergence of their economies and economic policies, U.S. Ambassador to the Organisation for Economic Cooperation and Development Edward Streator said.

He told an American Chamber of Commerce lunch the world was changing rapidly and national attitudes had to alter accordingly if growth was not to falter and world depression set in.

Liberalisation of world trade in money, goods and services and technology was an overriding goal, he added.

World financial flows were now 12 times as large as traditional trade flows, the importance of commodities was declining rapidly, countries such as those on the Pacific Rim were becoming major growth areas, and the labour element in manufacturing was declining sharply, Streator said.

All these factors were creating major social and economic pressures and demanding a rapid reassessment of traditional attitudes, he added.

“Agriculture is a prime target for change.One of the first things we must do is disconnect farm subsidies from production,” Streator said.

At an OECD ministerial meeting in two weeks time there would be an attempt to agree global principles to help reduce this major agricultural problem, Streator said.

“However, of equal and vital importance in reducing the world’s dangerous slide towards protectionism will be the outcome of the new round of talks under the General Agreement on Tariffs and Trade (GATT),” Streator added.

Dutch finance minister Onno Ruding, who also spoke briefly at the lunch, stressed the importance of coordinating national policies and of the GATT talks in preventing a rapid decline into bilateralism and global protectionism.