A presidential task force on foreign economic policy has recommended to the White House a much tougher stance to end what it says are unfair trade-financing subsidies supported by some of America's key trading partners.
Advocating "fighting fire with fire," the task force urged that the Export-Import Bank and the International Development Agency marshall more than $14 billion worth of resources to make "mixed credits" available to American businesses operating abroad.
Mixed credits, the task force report said, include export financing subsidies for commercial purposes that "distort trade patterns and reduce competition."
It urged the United States to continue to press, through the Organization for Economic Cooperation and Development in Paris, for limits on the use of mixed credits. The report cited France, Canada, Japan and West Germany, as well as many more advanced developing countries such as Mexico and South Korea, as among users of mixed credits to push their exports.
The proposal for a tighter rein on mixed credits was one of many recommendations by the Task Force on International Private Enterprise, composed primarily of prominent business leaders. The main theme of their 172-page report, scheduled to go to President Reagan tomorrow, is the urgent need to promote development in the Third World by "unleashing the dynamism of the private sector."
The report calls, for example, for major changes in AID that would require it to channel American foreign aid to the private sector in the developing nations rather than to the governments involved.
Chaired by Dwayne O. Andreas, chief executive officer of the Archer Daniel Midlands Co., the task force was commissioned by Reagan in May 1983 to determine how American foreign aid could be used to stimulate the private-sector role in trade with the Third World.
It was an outgrowth of the North-South summit at Cancun, Mexico, in 1981, where Reagan in a major speech held out "the magic of the marketplace" as a key element in the potential development of less-developed nations.
Another major element of the report, labeled by the group as "its most important recommendation," is a proposal that Reagan "elevate international economic policy to a level comparable to national security" by creating an Economic Security Council in the White House to coordinate policies dealing with the debt crisis, trade and agricultural affairs, transfers of technology and foreign aid.
Because "economic concerns can no longer be separated from political concerns," the task force also urged the appointment of an assistant to the president for economic affairs, "who would have the president's ear." The new council, together with the new presidential aide, would help focus attention on emerging economic issues, the report said.
In a transmittal letter signed by Andreas and the task force vice chairman, Parker G. Montgomery, chief executive officer of Cooper Laboratories Inc., the group said the thrust of American foreign economic policy of the past several years must be refocused.
"The central policy that must inspire U.S. development effort is. . . that the way to create wealth is to create incentives and to rely on the market mechanism rather than the constraints of undue government interference," the report said. "Unless the developed nations accept this, development aid will fail."
The report complained that the effort made by Reagan in 1981 to bolster AID's private-sector effort through a new bureau for private enterprise has not been supported by adequate staff and budget. It argues that AID should work with the U.S. business community rather than academic or consulting groups for advice on dealing with developing countries.
"Through trade and investment, U.S. companies can increase profits and make a greater contribution to development," the report said.
The report's call for the use of American "mixed credits" to retaliate against the same tool used by other nations resulted in the single main dissent reported by the task force.
Former undersecretary of state for economic affairs Myer Rashish and George M. Ferris Jr., chief executive officer of Ferris and Co. Inc., of Washington, said that this part of the report was not germane to the main theme of private enterprise and development.
The dissenters suggested that the call for a major increase in the use of mixed credits to finance American exports was inconsistent with the report's call for a "freer and more open" international trading system.
But the task force majority contended that "to protect U.S. firms and the free enterprise system," there was no other way to bring the other nations to the bargaining table and ultimately get rid of the trade subsidies involved.
The report said that the Export-Import Bank should use its full $14 billion worth of loan and guarantee authority, along with the limited mixed-aid authority available to AID as leverage in a negotiating effort to roll back competing subsidies.
Among other recommendations of the task force:
* Food aid: Food aid should be at least doubled to alleviate poverty. A larger share of total foreign aid should be in the form of food, and most counterpart funds generated by Public Law 480 should be channeled through businesses and not through government.
* Private investment: To help Third World countries create conditions conducive to attracting private foreign capital, the U.S. and other nations should establish a Private Enterprise Institute as a research center. Also, the U.S. should support a multilateral investment guarantee program administered by the World Bank.
* Multilateral institutions: The group called for continuing U.S. support of the multilateral financing institutions such as the World Bank and the International Monetary Fund, noting that the IMF "does a difficult and unpopular job as well as it can be done."