Treasury Secretary Donald T. Regan indicated here today that the Reagan administration would be stubborn in fending off shifts in American foreign economic policy sought by the leading industrial powers in Europe and Asia.
Regan is here for a two-day ministerial meeting beginning Monday of the 24-nation Organization for Economic Cooperation and Development. He is accompanied by Commerce Secretary Malcolm Baldridge and trade ambassador William E. Brock.
Because the initial OECD session is widely expected to set the tone for the economic summit to be held in Versailles next month among leaders from the United States, West Germany, Britain, Japan, France, Italy and Canada, Regan's comments at a press conference today promised an air of confrontation when President Reagan meets his counterparts.
Regan rejected the conclusion that the president will be isolated at the Versailles summit. He reported that George Shultz, head of Bechtel International Corp. and former treasury secretary, has been on a personal mission for the president and has conferred already with three heads of government participating in the summit.
Regan rejected the view that high American interest rates are a major cause of European economic troubles. He also flatly turned down suggestions that the U.S. government should intervene more directly in foreign exchange markets to stabilize the rate of the dollar against weaker currencies.
He also said that at the meeting here and at the Versailles summit, Europeans would be urged to limit their extensions of credit to Soviet Bloc countries, although he acknowledged that traditional trading relationships exist between Eastern and Western Europe.
To the suggestion that European politicians may be pressured to "link" their mutual defense commitments to extracting economic concessions from the United States, Regan said sharply, "That would be a shortsighted point of view. I regard defense commitments as a sort of insurance policy for the long range. So I would caution against that kind of thinking."
To deflect the expected European pressure at both the OECD and summit meetings for stronger intervention in the foreign exchange markets, Regan revealed that he will propose a study of intervention effects by a neutral agency, probably the International Monetary Fund. The American position is that intervention in the market is a costly procedure that has little actual effect on exchange rates in the long run.