The United States and other leading industrial nations today declared that inflation has been brought under control in many of their economies and that the time has come to turn their attention to job creation and the growing problem of trade protectionism.
In a communique following a surprisingly amicable two-day meeting of the 24-nation Organization for Economic Cooperation and Development, the ministers reversed the emphasis on reducing inflation that predominated at the past several years' meetings.
"The central task of policy" now must be to assure "the transition to sustained non-inflationary growth and higher employment," the communique said.
Secretary of State George P. Shultz said the conference had provided the free world "with a sense of common purpose, now that it is moving in the direction of non-inflationary economic growth."
Shultz assured the Europeans that the United States recognized that their economic recovery was not complete and therefore did not call on them to engage in economic warfare with the Soviet Union. Shultz' assurances appeared to go a long way toward easing tensions over the East-West trade issue within the European community.
OECD Secretary General Emile van Lennep hailed the results of the meeting--generally considered a prelude to both the Williamsburg summit--as "a political commitment to look into the process of reversing protectionist trends."
The call to "relax and dismantle" trade restrictions on a progressive basis was the first time such language has been incorporated in an international document, and there was hope privately expressed here tonight that it would be endorsed later this month by the Williamsburg economic summit meeting.
If there was one surprise here in the past two days, it was the unexpected speech by French President Francois Mitterrand yesterday to the OECD ministers at a special reception at the Elysee Palace. Mitterrand read a speech in which he demanded more stability in the international economic system, and suggested a new Bretton Woods conference.
Although most of the points in Mitterrand's long shopping-list run counter to the free-market approach of the Reagan administration, Shultz rejected the suggestion that Mitterrand had clouded prospects for success of the summit at Williamsburg.
But many others were skeptical about Mitterrand's speech, and some were clearly put off by the manner in which it was delivered. Both German and British spokesmen categorically rejected his call for a new monetary order with more closely controlled exchange rates.
In an interview, Martin S. Feldstein, chairman of President Reagan's Council of Economic Advisers, said that Mitterrand's call for a move toward more fixed exchange rates "is not a direction in which I would like to see us moving." Fixed exchange rates, Feldstein said, are impossible with French inflation running in the 8 percent to 10 percent range, against 3 percent to 4 percent in the United States.
Treasury Secretary Donald T. Regan kept his comments on the Mitterrand speech low-key, saying only that "at some point in time" the nations of the world would have to discuss the many interelated financial problems "in a more detailed way." But he added that "the time is not quite ripe for a Bretton Woods type conference."
In setting its sights on regenerating economic growth, the OECD communique divided its member nations into three groups, according to the progress made on inflation.
The first group, which includes major nations such as the United States, West Germany and Japan are those in which inflation has subsided to the level of the 1960s. For this group, accounting for 70 percent of OECD output, the ministers sketched out a pro-growth policy. This would require keeping current monetary policies easy enough to assure a further lowering of interest rates.
A second group, making up 20 percent of OECD GNP, which needs to make further progress against inflation, doesn't have enough "growing room" to push an expansive policy, the OECD said.
For the third remaining group, where inflation is still out of control, the OECD had no new answers, saying only that improved economic performance was mainly "a task for domestic policies."
It called on all countries to abandon "protectionist trade and domestic support measures designed to shelter weak industries and companies from the full impact of the recession and structural changes."
Van Lennep was directed to "propose appropriate follow-up procedures." He declined to be specific, but agreed that steel and textiles might be the kind of industries to get priority attention. Van Lennep also made clear that his intention not only is to persuade rich nations to drop trade barriers against Third World countries, but also to abandon quotas and other devices they use against each other.