The United States has given Saudi Arabia a unilateral no-embargo pledge as an inducement to the Saudis to increase their purchases of American food products, Agriculture Secretary John R. Block announced today.
Block told the Saudis that the United States is committed to being "a reliable supplier at world market prices," an assurance the Saudis sought because of this country's record of invoking export restrictions in political disputes.
He said he decided during a recent visit to the kingdom that it was "crazy" for the Saudis, who buy little food from the United States, to be spending billions to develop agriculture in a hostile environment, while the United States is taking land out of production.
Block said that he pleaded with the Saudis to retreat from their "thrust to self-sufficiency at any cost," and "not to raise it if we can grow it cheaper."
When Saudi officials expressed "concern about the U.S. commitment to be a reliable supplier of farm products," he wrote to them with President Reagan's assent to promise that the United States would honor its commitments, Block said.
His letter of reassurance is "now being studied by officials of the Saudi government to make sure the language is acceptable to both parties," he said. "When they have finished, it will be made part of the record."
Block was speaking at a conference on Saudi-U.S. business relations sponsored by the U.S. Chamber of Commerce and the Saudi Gazette, an English-language newspaper in Jeddah. In a luncheon address and a separate press conference, he said he could not believe that it is desirable for Saudi Arabia to go on "paying farmers $1,000 a ton to grow wheat in the desert while we are laying idle 82 million acres of the best farm land in the world" through the administration's payment-in-kind program.
He said there was no discussion of a parallel commitment from Saudi Arabia to keep oil flowing to the United States regardless of political developments. Block said both sides recognize that "there is a great deal of interdependence" in their relationship, and he argued that the doctrine of "comparative advantage" should determine trade policy between the two countries.
"They have a comparative advantage in the production of oil, and we have a comparative advantage in food," he said.
Saudi Arabia and the United States participated in the two best known trade embargoes of recent history--the Arab oil embargo of 1973 and the U.S. ban on grain exports to the Soviet Union after the Soviet invasion of Afghanistan.
It is probably too late for Saudi Arabia to give up its commitment to develop indigenous agriculture. The country has allocated $21 billion for agriculture and irrigation in the 1980-1985 period. Saudi Arabia already has approached self-sufficiency in some dairy products, poultry and eggs, and is producing about 400,000 tons of wheat a year. The country subsidizes the development of every kind of agriculture, even paying 100 percent of the cost of flying livestock into the kingdom.