State Department officials said yesterday that Geneva negotiations among the rich and poor nations for a "common fund" to help stabilize commodity prices will break up this week with no agreement in view.
This comes as a special disappointment to the Carter administration, which two weeks ago offered in a major policy reversal to make a direct monetary contribution to the common fund in an effort to break the dead-lock.
The U.S. proposal reported earlier, was confirmed for the first time yesterday by Under-Secretary of State Richard Cooper, who said the U.S. offer "was an evolutionary change."
But despite the new U.S. flexibility, "The expectations of the less developed countries are higher than we and the other developed nations can deliver," Robert Hormats, assistant secretary of State for Economic and Business Affairs, said in an interview.
Informed officials said a wide gap remains between the poor nations' and rich nation's, concept of the size and purpose of a common fund.
But they also said the discussions in Geneva had not been "acrimonious," but that the poor nations are looking for additional concessions that are politically unrealistic to expect.
Establishment of a common fund has acquired a strong degree of symbolism in the so-called North-South di-dialogue over the past three years. Although the rich nations are less convinced than the poor ones of the utility of a common fund, they recognize that the less-developed world considers it a must.
The U.S. did not put a specific dollar commitment to the common fund on the table in Geneva, but it is clear that its proposal would be less generous than the less generous than the less developed countries think necessary. Unofficial estimates are that the U.S. had in mind a common fund of some $200 million or so, with a U.S. share on the order of about $50 million. The LDC vision runs two to three times that.
In the U.S. concept, a so-called "Window No. 1" of the fund would help the financing of stocks, benefiting consuming as well as producing nations. But the LDC group believes that first-window loans also should be made to individual countries seeking to support the price of a particular commodity.
Even more complicated is the LDCs' proposal for a "Window No. 2," which would provide development aid. The U.S. is not sure that there should be any Window No. 2, but if there were, it would be limited to market promotion or research and development activities.
The U.S. and some other wealthy nations see a Window No. 2 in effect duplicating functions of existing international agencies such as the World Bank and regional development banks.
American officials had looked on their proposal for a cash contribution - which they termed a breakthrough - as a test of the ability of the LDCs to reach a consensus on broader North-South issues.
American officials haven't given up all hope. They say that the next major form where progress will be sought is a meeting of the United Nations Conference on Trade and Development in Manila in May 1979.