President Reagan said yesterday that falling oil prices will aid a worldwide economic recovery, and he urged that western nations resist pressures for protectionist economic policies that would limit international trade.
Reagan's comments on the impact of recent oil price decreases by Nigeria and North Sea producers were repeated yesterday by other administration officials.
Secretary of State George P. Shultz said it will "spur the free world's economic recovery" but warned that the lower prices could mean economic turmoil for Mexico and Venezuela, which rely on oil revenues to pay their foreign debts.
Asked at a House Foreign Affairs Committee hearing about Saudi Arabian attempts to hold the official, benchmark price to about $30 a barrel of crude oil, down from $34 a barrel, Treasury Secretary Donald T. Regan said a price of about $27 to $25 a barrel would "prove beneficial for most nations of the world."
Reagan's breakfast-hour speech was telecast by satellite from the White House to Tokyo, Zurich, London and a Washington hotel for participants in conferences sponsored by Newsweek International in celebration of Newsweek magazine's 50th anniversary. It was 10:30 p.m. Wednesday in Tokyo, where Japanese Prime Minister Yasuhiro Nakasone was among those listening, and mid-afternoon for audiences in London and Zurich.
After the speech, participants at all four locations were able to question a panel of Newsweek editors and writers in Washington.
"The innovation represented by this broadcast is typical of Newsweek's first 50 years," Reagan said, after he was introduced by Katharine Graham, chairman of the board of The Washington Post Co., which owns the magazine. Reagan said technology like that used in the satellite broadcast could help the free world achieve closer ties.
With elections a week away in West Germany, where the nuclear freeze movement is strong, the president used the international forum to say that he sympathizes "with the desires of many who call for a freeze" but warned that they undercut arms negotiations and that a freeze now would leave the Soviet Union with an advantage over the United States which would heighten the risk of aggressive acts and nuclear war.
"They freeze advocates genuinely want to reduce the threat of war and so do I," he said. "But a freeze now would remove any Soviet incentive to negotiate real arms reductions, which is what we must achieve . . . . Let no nation think it can exploit our humanitarian concern for their own ends.
"To those who fear nuclear war, I say again, I'm with you," the president continued. "We must reduce the risk of war . . . . We must serve mankind through genuine and mutual arms reduction and that is the path the nations of the West are committed to."
In addition to reassuring his listeners that the United States is seriously engaged in arms reduction negotiations, the president acknowledged that the western world has been in the grips of a recession and burdened by record levels of unemployment. But he said that the bad economic times are ending around the world as they are in the United States.
He attributed the start of the recovery in the United States to his policies of cutting taxes, reducing regulations and government spending and keeping to a course of steady monetary growth.
"We in the West are on the threshold of a new economic era," Reagan said. "Our common problems have a common solution, economic growth."
Reagan added that reductions in oil prices will help the recovery: "There are some short-term concerns to be sure. But over the long run, more realistic market-oriented oil prices will spur economic recovery and free vast amounts of real resources that previously had been devoted to energy."
The president cautioned that there are possible roadblocks to recovery such as the stress on the international financial system, cash-flow problems facing developing countries, and pressure in countries with high unemployment to enact laws limiting free trade.
"Economic nationalism is always self-defeating," Reagan said. ". . . If protectionist measures deprive developing nations of their export markets, our problems will become deeper and harder to solve. The United States will continue to push for free trade and fair trade at home and abroad."