The United States and its major trading partners are being urged, as soon as they see evidence of sustained economic recovery, to abandon protectionist import barriers put up during the recession.
This proposal, which could become a focal point of discussion by western leaders at their economic summit beginning in Williamsburg, Va., May 28, will be formally offered by Emil Van Lennep, director general of the 22-nation Organization of Economic Cooperation and Development at the OECD meeting beginning here Monday.
Secretary of State George P. Shultz, Treasury Secretary Donald T. Regan and the foreign and finance ministers of Canada, Great Britain, France, West Germany, Italy and Japan are to consider Van Lennep's proposal here as part of a two-day "dry run" for the Williamsburg summit.
If the ministers support the proposal, it is expected to appear on the agenda for Williamsburg. A similar recommendation was made by six former European, American and Japanese policy-makers after a meeting two weeks ago at the Brookings Institution in Washington.
If the seven major western industrial nations were to agree to such a policy, they would have to drop or soften such trade protectionist measures as severe restrictions on textile imports from Third World countries, U.S. quotas on sugar imports, Japanese restrictions on agricultural imports and North American and European quotas on Japanese cars.
After the OECD meeting, Regan and U.S. Trade Representative William E. Brock are to host an unprecedented meeting and dinner Tuesday night for the other six summit nations' finance and trade ministers. This initiative is designed to emphasize linkage of financial problems, such as Third World debt, to trade issues, including protectionism.
There were doubts today about how many of the other six will be represented. France plans to boycott the dinner, saying it interferes with the normal preparatory process for the summit. The principal German trade and finance ministers apparently have conflicting engagements, and it is not clear whether Sir Geoffrey Howe, Britain's chancellor of the Exchequer, will attend.
Van Lennep's proposal to pull down recession-time barriers to free trade is incorporated in an OECD staff study on how to strengthen the economic revival expected over the next 18 months to two years. The OECD view is that no one should count on such protectionist devices to fall away by themselves.
With three weeks left before the Williamsburg summit, this is the status of debate on main issues expected to be discussed there:
The world economy. The OECD projects a modest economic recovery over the next 18 months, not quite as optimistic as U.S. estimates. The Europeans are expected to bring up in Paris and again at Williamsburg their argument that the global economy suffers from high interest rates, too strong a dollar and the impact on these of large U.S. budget deficits.
Trade. The seven summit nations are expected to restate their pledge to avoid new protectionist measures. It is not known what else may come out of the Regan-Brock meeting and dinner.
International financial problems. Most Europeans fear that the modest expansion of International Monetary Fund resources now in the works will not be enough to prevent a serious Third World debt crisis. U.S. officials plan to endorse an OECD staff proposal for a better-organized "fire brigade" operation among central banks to meet emergencies in individual countries.
East-West trade. A series of reports commissioned after last year's post-Versailles summit dispute over western supplies for the Siberian-Western Europe natural gas pipeline will be presented in Paris. U.S. officials said they are confident that U.S.-European differences on East-West trade had been solved and won't erupt at Williamsburg.
European officials agree on NATO alliance restrictions on security-sensitive exports to the Soviet bloc and acknowledge the need to avoid subsidies for eastern trade but still insist on the right to pursue normal trade with the Soviet Union.
Energy. Falling oil prices have created a new perspective. There is worry that oil prices, if they fall too fast, could hurt producers such as Mexico. The International Energy Agency warned in a recent study about potential oil shortages and price increases.