Global Economy

Published: 1972
Play Audio Archive Story - UPI

Announcer: The Moscow visit didn't produce the Trade Pact the President hoped to bring home, but the Commission appointed to work on the matter did its job quickly.

Secretary Peter Peterson: "We believe that this trade agreement and land-lease agreement ends a 25-year hiatus in normal commercial relationships with the Soviet Union."

Announcer: Commerce Secretary Peter Peterson at the White House on October the 18th outlining the U.S.-Soviet Trade Pact President Nixon had hoped to bring home from Moscow in May. It provides that the U.S. will accept $722 million including interest over the next 30 years as repayment of the $10 billion World War II Russian Land Lease Act. In exchange, the President will ask that Russia be granted most favored nation status for sales to the United States.

State Secretary Rogers was on hand, too, to say that money wasn't the only important aspect of the trade deal.

William P. Rogers: "We do not look upon these agreements as agreements which carry economic implications only, but I believe will improve the climate greatly, which will permit improved relations between our two countries in the political field."

Announcer: A political field day resulted. As the size of the big U.S. grain sales became clear, farmers charged the Administration had given inside information to wheat traders, providing them windfall profits and trimming farmers' receipts. UPI Farm Editor Bernard Brenner explained.

Bernard Brenner: "The National Association of Wheat Growers says some farmers in the more southerly, early-harvest parts of the wheat belt had sold their 1972 crop before they knew the price was going to skyrocket this summer; and not only that: under the law when average market prices go up, Government subsidy payments go down. For most farmers, the lower subsidy is offset by the higher market price; but the farmers who sold early and didn't get the high market price, well, they get no offset for the cut in Government subsidies. So, the Association says, the Government should now pony up about 20 to 25 million dollars, enough to replace the farm-subsidy losses suffered by growers who sold before they got the word about the Soviet-American grain deal. This is Bernard Brenner, Washington."

Announcer: The Agriculture Department conceded that some information had gone to wholesalers before it was given to the general public, but denied any impropriety there or in the actions of an Agriculture Department official who participated in negotiations for the government and then moved to a job with one of the traders involved.

Money traders had a hectic time this year, too. In early May, the dollar was devalued. That meant anyone wanting to buy gold with greenbacks had to pay $38 per ounce instead of $35. But free gold kept bouncing around. More on the money story from Pat Thorogood in London.

Pat Thorogood: "There was some uncertainty following the Smithsonian agreement on world exchange rates last year; but as this year went on, doubts evaporated and things looked generally rosier. President Nixon's tough economic measures strengthened the dollar, and most European currencies pulled into line behind it, all except for the pound sterling. Now, the British Government is trying the mixing method of strengthening the economy. The United Kingdom has a high level of consumer demand in strengthening industrial activity, but there is accelerating inflation and a weaker external position.

"In France, growth continues and is accorded a high priority in the 1973 budget; but the franc has fallen into the jaws of serious inflation. Like Italy, almost every section of the French workforce has been on strike at one time or another during the year. In Italy, there's a slight recovery in output; but growth is slow and there seems to be a strike a day and this includes professional people. But it's every man for himself there, and when one goes on strike in Italy he's cursed by the others, who may go on strike the next day and in turn be cursed.

"Growth is increasing in West Germany, Denmark and Belgium; but inflation has hit there, too. And in the Netherlands, a wages-and-prices policy is being considered to deal with inflation, continued slowdown in growth and rising unemployment. With the expansion of the common market at the beginning of the coming year, those countries already holding membership should not notice much in the way of change; but the new members are going to go through a period of uncertainty as they adapt to new trading laws, tax structures and get used to dealing with old neighbors on a new basis. This is Pat Thorogood in London."

Announcer: The European economic community took on a new, larger look in 1972 with the addition of Ireland, Denmark and, as Rudy Misho reports, most significantly Britain.

Rudy Misho: "For the British, joining Europe was as psychologically significant as it was economically necessary. With their industrial plant decaying, her export market shrinking, Europe offered Britain a future. In going in, the government of Prime Minister Heath was abandoning its so-called special relationship with the United States and placing less emphasis on its older relations with the Commonwealth. The switch is the big one; but so, too, is the concept of a Europe united in peace. And when the leaders of the European 9 met in Paris, the sense of history was not lost on the British Prime Minister"

Prime Minister Edward Heath: "We have come together in unity, every last part of Europe, after centuries, after a thousand years. And I think that this meeting of the minds as heads of government has itself been remarkable for that fact, and the rest of the world recognizes this."

Rudy Misho: "Well, the Paris Summit did not kindle that much public fire; yet the fact remains, the nations of a common market are now heading for what Prime Minister Heath called 'a properly united Europe' by the end of the decade, by 1980. And that goal, if achieved, will affect all of us everywhere. The first test for the new Europe will be the new year. This is Rudy Misho in London."