Jimmy and Woodrow and Billy and Bert

Murray Sayle

Tokyo The Akasaka detached palace, where eight presidents and prime ministers met last Thursday and Friday to do something about the oil crisis, is a rather tacky out-east copy of Versailles, complete with a hall of mirrors, a minstrels' gallery, and Corinthian columns of imported French granite. An idealistic American President, woollyminded and inexperienced, met a collection of hard-faced Europeans and wily orientals, and while he was trying to set the world to rights, they were scheming among themselves, looking out for nummer ein/numero uno/number one, and generally putting vile self before the interests of suffering humanity. The noble but naif American was taken in, of course, but not the hard-headed folks back home, and so the high-minded President returned to heartbreak and political disaster.

We are talking about the original Versailles Treaty negotiations, of course. But the thought is intriguing: was last week's Tokyo economic summit another tacky out-east copy of Versailles (the treaty, not the palace)? A gullible American of the highest moral principles, wrestling with stubborn Europeans and Japanese, in a neo-baroque palace while the world watched.

It has long been clear that Jimmy Carter and Woodrow Wilson have a lot in common, like being a pair of sincere Christians and practising democrats who are out of their depth in Washington, and cannot handle Congress. Their predicaments have, up to now, been somewhat different — both were elected in peace, but Wilson led the United States into war, naturally from the highest possible motives. That war was, it seems, about who was to get the collapsing Turkish empire. Wilson tried to shape the ensuing peace in accordance with the principles which flowed from his deeply held Presbyterianism.

Well, here we are in another world crisis. The subject this time is the oil of the Middle East, which happens to be the former Turkish empire. No war in sight yet, although insiders are not taking bets that it won't end that way again. We certainly have the other Symptoms: prophecies of doom everywhere, armaments building up as fast as the ever-increasing tempo of international Conferences, alliances dissolving and new ones forming as rapidly, bitter recriminations about trade and national resourcess.

Are we in a situation which has a rational, if painful solution, which we can negotiate towards? Or are we merely papering over irreconcilable interests which are slouching towards a nasty confrontation? From here , it certainly looks like the latter. The Arabs simply have no use for the immense sums of money we will have to pay them, even to keep enough oil flowing to maintain the capitalist world at its present level of economic activity. They just might be interested in buying Palestine with Jerusalem thrown in, but these are apparently not for sale. The dodge of getting them hooked on ever more sophisticated and expensive weapons seems to have collapsed in Iran.

Of course, we should be defying the Arabs, whose oil will run out one day anyway, by investing in immense schemes for replacing oil with other sources of energy, which means, let us be honest, disinvesting in other more desirable things, like industrial equipment, housing and nuclear weapons. Under our system, capitalists are supposed to do the investing for us, but experience shows that they will not do this to help suffering huManity, but only (in peacetime, at any rate) when the price of oil is so high that they are on to a copperbottomed, risk-free certainty, despite the environmental, nuclear safety and striking coalrniner problems which bedevil other potential energy sources.

The oil price at which the free enterprise system, to use a phrase of Mrs Thatcher's, will joyfully invest in substitution is not the 22 dollars a barrel which OPEC now proposes to charge, nor yet the 30 dollars to 50 dollars a barrel oil is fetching on the Rotterdam spot (ie black) market. It is probably closer to 100 dollars a barrel. Oil at that price means deep depression, mass unemployment and probably revolution, at least in the United States where motorists pack guns when they go to fill up. Behind all this is the tantalising thought that the Arabs are really quite happy on their camels out in the desert anyway, and the real cost of production, here and now from the Saudi wells, is 30 cents (15p) a barrel, allowing generous overheads.

We have a further problem, quaintly described by Pravda this week as the 'sharpening of the intra-imperialist contradictions.' In our fiercely competitive trading world, those with access to oil, either on better terms or just in bigger quantities, have a decisive advantage in snaring the export orders that are still going. Or, at least, in staying alive in the face of competition from West Germany and Japan — countries which have proved that they can turn a barrel of oil into more saleable exports than anyone else, and who, in the case of Japan at any rate, have at least 2000 years of experi ence in making a little go a lorff way.

So in the spirit of brotherly and sisterly love and shared sacrifice, the seven met in Tokyo to cut their oil consumption, reduce the living standards of their people, transfer more real assets to Arabs, as the latter are demanding in the name of Muslim solidarity, and make a start on the massive work of substitution, That, at least, was what they were supposed to do, in the logic of appeasing OPEC, which seems the only logic currently available.

Margaret Thatcher, formidable in the electric blue suit, flowery scent and triplerow pearl necklace of a successful Suburban bridge player, held the strongest cards around the table and played them coolly. and confidently. Britain will be selfsufficient in oil, cost-wise, within 18 months, maybe sooner. No one is going to tell us how much we can use of our oil. The same happy circumstance which kept Britain out of the sordid bargaining over targets and quotas resolved Mrs Thatcher's other pressing difficulty. Her party stands, the electors who put her in were told, against any kind of interference in the pure, invigorating forces of the market, chilly though they may be at first. How, then, could she vote for a Europe-wide import target? Easy, because it's really none of our :business. We're all right, Helmut, Valery Masayoshi and the rest, No, Mrs Thatcher said, she had not actually called any of them by these names. 'First-name terms can lead to artificial familiarity', Mrs Thatcher warned with a bright smile somehow full of menace, and I'll swear she was looking straight at me across a crowded press conference. Guiltily, I scratched 'Maggie' out of my notebook. Roy Jenkins, urbane and reasonable, said that everything would take time. The European Commission ran the best press briefings of the conference, possibly because it has no electors to massage back home, but Jenkins had no high cards to play and was brutally snubbed by the French the night before. The European team was in fact captained by Giscard d'Estaing, inspecteur des finances, this year's president of the European Council, tall and unbending among the imported French granite col umns, who explained that the European , position had already been decided at Stras bourg and could no/ be negotiated.

The EEC, he said, had decided to restrict 1979 oil consumption to 500 million tons (10 million barrels a day). This is in fact the EEC forecast, so it's rather like MGiscardd' Estaing promising that he will not grow any more than one year older during the same period. Between 1980 and 1985 the Communjty will maintain oil imports (notice we're suddenly off consumption and on to Imports) at an annual level not higher than 1978. If this sounds like a harsh selfdenying ordinance, then you have been taken in, too.

EEC oil imports for 1978 were 470 million tons, a record year. Consumption was in fact quite a bit more because the British North Sea wells were already pumping away merrily. But British production is increasing all the time, and this is not, according to the EEC interpretation, an import. The Americans say it is, so we will no doubt be hearing more of this when we get around to recriminations. Europe, by voting a ceiling on imports, has thus in fact voted itself an increase in consumption, the former British imports being whacked out among the others, and no ceiling at all being placed on British consumption or production (apart from the natural, Arab-inspired inclination to leave it under the sea until it hits 100 dollars a barrel).

Helmut Schmidt did not like this very much. Nervous, distraught, and puffing innumerable cigarettes, the German Chancellor was none too keen about the whole line the conference was taking. He is just as much a free market person as Mrs Thatcher, probably more so, and the spot market is in Rotterdam because it is handy to Germany, which is currently buying 30 per cent of its oil requirements from this shady source. Schmidt favours letting the market decide the true price of oil, confident that letting the chips fall where they may will allow a disproportionate pile to wind up with the strongest, all things being considered, economy in the world. However, West Germany still feels uneasy about being the odd man out at international conferences, so Schmidt, pale and unhappy. went along.

Not so Japan. Masayoshi Ohira, a former finance bureaucrat like Giscard, was in an awkward position. As host of the summit, he would be expected, one would think, to be outgoing, genial and eager for compromise. As chief Japanese delegate, in fact he practised classical Japanese negotiation tactics, which depend heavily on silence, low profile and clutching the cards close to the chest until the last possible minute.

'The Japanese way of leading negotiations is based on methods other than those used in Europe', said Graf Lambsdorff, Schmidt's Finance Minister afterwards, 'They are methods with which we will have to familiarise ourselves, which cost more time and which, as we know from Japan's economic achievements, could promise great success.'

But they take, as the Count says, a lot of time. What was Japan's position on oil imports? We are still not ready, said Ohira. (Japan has been working on the summit for six months.) So they turned to another Japanese proposal, to call an international conference on the plight of the Vietnamese boat people. As this cost nobody present anything, it carried without discussion. Thorny problems like whether to ask the Russians, who say that there are no boat people but only fugitive counterrevolutionaries and sea-going CIA agents, are left for Secretary-General Waldheim to sort out.

A pause, and then Joe Clark, looking about 25 in winkle-picker shoes and a disco suit with flared trousers, delivered the speech with which he has just won the Canadian elections, to mild interest. The defeated Trudeau says that Clark is unsophisticated and knows nothing about international affairs. And there may be something in this. Clark was certainly the first of the potentates to come right out into the open and ask for more oil, not less. The cure to the Quebec problem he explained, was to bring eastern Canada up to the level of consumption of western Canada, which means using more oil. Canadian output from the Alberta fields is about to slump, but will rise again when the Yukon wells come on stream. 'Canada will therefore reduce its average rate of growth of oil consumption to one per cent.'

Clark spoke in alternate paragraphs of French and English, a somewhat irrational procedure as it implied bilingualism in his audience who could therefore follow either language just as easily. His drift was also obscured by the fact that he was asking for more oil at a conference supposedly devoted to doling out less, but the last sentence of the preceding paragraph can be recast in less tortured English, or French for that matter: Canada plans to consume one per cent more oil a year, and as production is falling, Canadian imports are going to soar — if the Arabs are willing to sell, of course. 'Canadians and Americans are profligate users of energy', added Clark, getting down to the heart of the matter, 'and this can't be changed overnight by their governments. But, in the long term we will have to overcome the problem'. But the crisis, unfortunately, is already here.

This was the cue for Jimmy Carter. We have come a long way from Roosevelt's easy mastery of international conferences, as Carter's performance demonstrated. He was earnest and sincere, grinning seldom and fumbling often for the right word, his Southern accent getting stronger as the problems mounted. Carter spent the previous four days on a state visit to Japan, visiting shrines, eating with chopsticks and generally wasting time on a series of elephantine public relations gestures designed to convince the Japanese that their interests lie with the United States, a decision they made themselves 35 years ago. But when the talks got down to millions of barrels. Carter was left floundering while his genial Japanese hosts suddenly became adversaries waiting for a lowered guard, a moment of inattention.

There were many. Carter, like Woodrow Wilson before him, appeared to be having trouble with the fine print, the real implications of what the others were proposing. His mind it seemed, was often far away, busy with the woes of the Democratic Party and the Republic. with Billy and Bert and Teddy and Ronald, not to mention the exhausting weekend he still had ahead discussing civil rights and other thorny topics with Park Chung Hee of South Korea.

His proposal, on behalf of theUnited States, was neverthele ss far from politically innocent. TheUnited States adopts as a goal for 1985 import levels not to exceed the levels either of 1977 or the adjusted target for 1979, ie 8.5 billion barrelsperday,'Thi smean s that in 1985 theUS will have the same import level as 1977, which was a record year of massive stockpiling.Not much here to enthuse theArabs, who want a big reduction, or a lot more money for a lot less oil.However,US home production is about to fall steeply. There is no way that the laggardUS capitalists can fill the breach with sub stitute s by 1985 And soCarter, on the face value of his offer, was the only one of the eight actually to propose a drop in oil consumption and therefore living standards for his pebple.

Brave, but perhaps not quite as selfdestructive as it looks. Carter will not be in office in 1985, even if he is re-elected, and as things are going his successor is not likely to be aDemocrat. For this year and next, time for Carter's nomination and re-election. US oil consumption should be running at, or close to the record 1977 level s.The only thing likely to sour this short-terrn game plan is continued diversion of crudeoil cargoes away from theUS and towards the sellers' black market in Rotterdam.Hence the vigorous paragraphs of the Tokyo final communique seeking 'better information on the profit situation of oil cornpan ie s'(five of the seven sisters areAmeri can), 'steps to bring into the open the working of oil markets' and the other subversive-sounding plying into the wholesome mechanism of the free market which so upset Chancellor Schmidt,Rotterdam's biggest customer.

Carter's other proposal, equally unpalatable to Schmidt, was that the different European countries should declare individual import totals, because the American public did not understand what the EEC was. This was adopted, as a recommendation only, and against the objections of Italy which is the European economy totally dependent on oil imports for energy. Even here there is a modest loophole, as Italians are cooking their spaghetti with gas from the Soviet Union.

We were still waiting for the Japanese proposals. They were at last delivered at 4.00 p.m. on Friday afternoon, with the summit due to end at five. Japan imports all but a few drops of oil, so the imports/consumption ploy of the Europeans was not available, and the Japanese instead opted for their preferred tactic of audacious, unexpected frontal assault.

The first Japanese proposal was for 7.4 million barrels of oil a day, which would be a 40 per cent increaase on Japan's present daily consumption of 5.3 million barrels. This was, of course, absurd — a bargaining position designed to be discarded, like Japan's demand for a declaration of racial equality at the original Versailles negotiations. With 40 minutes of the Tokyo conference left. Japan's real demand was then delivered: seven million barrels a day. The Americans, fingers dancing over their Japanese calculators, invoked the mysterious energy factor (how much oil is needed for a single percentage point increase in GNP, which in the case of Japan is said to be 0.6), and argued that Japan really needed 6.3 million barrels per day. The Japanese side stuck to seven as the last minutes of the conference ticked out. The Americans, whose shopkeepers years ago invented the 99 cent price tag, said make it 6.9— it sounds better. Japan agreed, not exactly to wild applause, and hence the curious final for mulation: 'Japan adopts as a 1985 target, a level not to exceed the range between 6.3 and 6.9 million barrels per day', wrapped in a lot of warm Oriental flannel about 'periodic review to make it more precise' and 'doing their utmost to move towards the lower figure'.

In fact the hosts were the big winners at the Tokyo poker game, with an increase in oil consumption agreed to by the others of 27 per cent for the next five years, oddly enough exactly what the Japanese economic planning agency says it needs for 'stable economic growth' approaching six per cent yearly for the period. The alterna tive to the Japanese proposal was, with the world's press waiting hungrily outside, failure of the summit to reach agreement and fury in the Arab camp.

So closely did the Japanese work to the deadline that the final communique was still being rushed off the duplicating machines while the eight were hailing it with interminable speeches of brotherly and sisterly accord — 'A historic summit' said Jimmy Carter, 'in mah own opinion' — and we were handed the still-wet patchwork document, full of awkward English, as we trooped to the telexes.

After the original Versailles, Senator Henry Cabot Lodge successfully accused Woodrow Wilson of selling out American sovereignty to cunning Europeans, and the League of Nations was doomed. What is Jimmy Carter taking home? As we all know, the heart of the current crisis is the need for increasing oil imports to maintain present American living standards, a need the Arabs simply won't supply. Not even for Jerusalem. Tokyo has demonstrated that Europeans and Japanese have no intention of lowering their living standards, if they can help it, and the trade conflicts with the US not even discussed at the summit will soon be with us again, as Japanese exports once again start zooming up.

Are Americans prepared to move down towards European and Japanese living standards? It was exactly this that most of them crossed the sea to avoid. Can Carter Claim that the others have accepted their fair share of self-denial? In the sense that they have at least put figures on their oil Consumption, which are still well below American figures, yes. In the sense that they have awarded themselves at least the Chance of more economic growth, while Carter has signed up the US for a certain depression, then the answer is no.

It is probably fairest to say that the Tokyo summit achieved exactly nothing at all, Positive or negative — just another missed turning off the road to disaster. and Billy and Bert, Teddy and Ron — and the ghost of Woodrow — are still waiting for Jimmy Carter when he gets home.