The Carter administration, in a new policy decision, has made a cautious overture to poor countries that have been demanding joint efforts to stabilize commodity prices.
But it continues to take an adamant stand against a pre-arranged "Common Fund" of $3 billion to $6 billion recommended last year by the United Nations Conference on Trade and Development (UNCTAD).
The new step proposed by the Carter administration, it was learned, is a willingness to discuss stabilization of individual commodity prices and a possibility of later "pooling" the funds set aside for each commodity, so that one might borrow from the other.
These general statements of principle were agreed on last Monday by the Economic Policy Group, co-chaired by Treasury Secretary W. Michael Blumenthal and Economic Council Chairman Charles L. Schultze.
An explanation of the new U.S. position was conveyed to major European nations and to representatives of poor nations last week by State Department officials.
The Ford administration not only opposed the Common Fund but resisted entering into dicussions of individual commodity stabilization. "In that sense," a member of the EPC told The Washington Post, "this is a significant change. We will have an open mind on individual commodities."
But officials were disturbed by published reports that indicated a complete reversal of policy and the acceptance of the UNCTAD version of the Common Fund.
"The United States continues to oppose any Common Fund created prior to the negotiation of individual commodity agreements," C. Fred Bergsten, assistant treasury secretary designate for international affairs, said in a telephone interview.
"We are prepared to consider pooling of funds contributed to build buffer stocks of individual commodities after such agreements have been put in place." No dollar figure has yet been discussed, he said.
U.S. Officials do not like the idea of what UNCTAD officials call the "catalytic" Common Fund. Once a pool of money is provided, the Common Fund opponents fear, it becomes an excuse to dip into it for commodity stabilization. Therefore, the Carter administration emphasizes starting with the individual commodity where price stabilization may be needed.
Officials said that no presidential decision had yet been made on the EPG recommendations, although the expectation clearly is that he will go along.
They stressed, again, that the administration does not regard price stabilization as a form of aid to poor countries. Basically, the administration position is that the general economic burdens of the poor countries must be met by increased transfer of resources from the rich countries, largely through an increase in the activities of the international institutions.
The International Monetary Fund and the World Bank are envisioned as playing a much larger role in the future. For example, if a "pooled" money arrangement covers more than one individual price stabilization agreement, the EPG policy statement contemplates that it might be administered by the World Bank, rather than UNCTAD.
In a typical commodity price stabilization agreement, when an excess supply floods the market a certain amount is bought and held in "buffer stocks" to prevent a drastic slide in price. Then, if a shortage develops, the buffer stocks can be sold to check higher prices.
An agreement of this sort has been in effect for tin.
Less developed countries argue that such agreements help both the poor producing countries and the rich industrial nations by moderating wide swings in price.
A U.S. official said yesterday that "we have come to feel that it is important to our economic interests to arrive at stabilization agreements for some commodities." The other reason for a shift in policy is to try to be "accommodating" to the view of the poor nations. That would help get the stalled North-South (rich nation-poor nation) dialogue back on track.
These issues will be discussed at the heads of state economic summit in London on May 7 and 8, and immediately afterward at a Paris meeting of the Conference on International Economic Cooperation.