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OECD Council Meetings at Ministerial Level

Meeting of the Council at Ministerial Level in April 1985

1. The Council of the OECD met on 11th and 12th April at Ministerial level. The meeting was chaired The Rt. Hon. Joe Clark, Secretary of State for External Affairs of Canada and The Hon. Michael Wilson, Minister of Finance for Canada. The Vice-Chairmen were Mr Fernando Moran Lopez, Minister of Foreign Affairs of Spain and Mr. Miguel Boyer Salvador, Minister of the Economy and Finance of Spain and Mr. Svenn Stray, Minister for Foreign Affairs of Norway.

2. OECD this year celebrates its 25th anniversary. Since it was founded it has played an important role in fostering international co-operation between its members and more widely. The present meeting, the first Council at Ministerial level with Jean-Claude Paye as Secretary-General, represents a further step along this road. The following text records the agreements reached.

3. There has been a marked improvement in the general economic situation in the past two years. Recovery is proceeding broadly. Inflation has been substantially reduced. Business profits have increased strongly, as has investment in a number of countries. The significant increase in world trade has generally benefitted both developing and developed countries. This increase has been led thus far by strong growth in the United States. Prospects are good that this country will achieve more moderate but sustainable growth. In Japan the expansion of output will stay vigorous. The progress achieved in most European countries toward re-establishing a better equilibrium has improved prospects for continuing growth.

4. Nevertheless urgent problems remain, and the policy actions to address them were discussed. The following interrelated concerns were highlighted:

5. Prospects for a durable recovery would be reinforced to the extent that these concerns can be alleviated strengthening the confidence upon which investment and economic dynamism depend. It is first of all necessary for governments to pursue domestic policies to improve the performance of their economies. There is also a collective responsibility to pursue policies that, taken together, will promote greater convergence of economic performance around a sustainable non-inflationary growth path, and to strengthen the open multilateral system. The following paragraphs represent a co-operative approach to this end.

6. Overall Economic Policy Priorities. The broad economic strategy that has been pursued in the OECD over the several years is paving the way for durable growth without inflation, and thus provides the basis for higher employment. It stresses medium-term objectives rather than short-term considerations. It recognises the importance of consistency and continuity in economic policies, and places particular emphasis on strengthening the capacity of economies adjust and innovate by making markets work better. This thrust will be maintained.

7. By building on the progress achieved, and by taking full account of the international repercussions of policies, a co-operative approach will both promote better international balance and improve domestic performance. Essential elements of such an approach include the need for all OECD members to: resist protectionist pressures; control government spending and where necessary reduce budget deficits; reduce structural rigidities as an important way of enlarging employment opportunities; and reduce major imbalances in international trade in goods and services. The following priorities for action by individual countries were seen as adding up to a better international climate while addressing domestic needs:

8. Priorities in Structural Adaptation. The restoration of high levels of employment is a central policy objective which requires increased dynamism and adaptability of OECD economies, while strengthening the consensus for such a course by ensuring that structural change does not bear unduly on weak and low-income groups. It was agreed that coherent actions across the whole range of social and economic policies would contribute to this goal in the medium term, and could increase confidence even in the short term. The Organisation is deepening its review and appraisal of adjustment policies in accordance with last year s decision. The Secretary-General will undertake preparation of a study of Member country experiences drawing on available research in this area; he will in the near future inform the Council at permanent level of plans for initiating this analysis. He will deliver a progress report at the next meeting of the Council at Ministerial level. There are also implications for action by the community at large including employers and trade unions. Pursuit of consensus arrangements between the social partners may be helpful in some countries. The following are priority areas for action:

9. Ministers welcomed the report by the Organisation on the Costs and Benefits of Protection. It has provided further substantial evidence that protection has yielded few, if any, benefits but imposed very substantial costs, chiefly on the protecting country. Not only are restrictive trade measures an inefficient means of sustaining employment, they also delay much-needed adjustment.

l0. Foreign Exchange Markets. The improved functioning of the exchange rate system depends primarily on the pursuit of appropriate economic policies in all OECD countries. The actions identified in paragraphs 7 and 8 above are also expected to strengthen the basis for greater exchange-market stability. Co-ordinated intervention in exchange markets can at times be useful to counter disorderly exchange markets and reduce the volatility of market perceptions. Ministers reaffirmed the importance they attach to the work undertaken by the Group of Ten, and expressed the hope that this would be completed rapidly.

11. Trade Policies. Ministers reaffirmed their commitment to the open multilateral trading system and their determination to strengthen it by further liberalisation. A new round of trade negotiations in GATT would contribute significantly to achieving this objective. There was therefore agreement that such a round of negotiations should begin as soon as possible (some felt this should be in early 1986). Ministers agreed to propose to the Contracting Parties that a preparatory meeting of senior officials should take place in GATT before the end of the summer to reach a broad consensus on subject matter and modalities for such negotiations. Active participation of a significant number of developed and developing countries in such negotiations is considered essential. The various actions recorded in this Communique insofar as they lead to a better international economic, financial, monetary and investment environment, will contribute to the success of this process.

12. The avoidance of any resurgence of protectionist measures is of vital importance to sustained economic recovery and to the preservation of the multilateral trading system. This is equally important to ensure the necessary climate of confidence for any new and wide-ranging initiative in the trade field. Ministers therefore stress their resolve effectively to halt protectionism and resist continuing protectionist pressures.

13. Moreover, against the background of uneven results so far, they emphasize the importance of further tangible progress in the Organisation's work aiming at a concerted programme of action to relax and dismantle existing trade restrictions. An important element of this programme is that all Member countries will submit by mid-October proposals on all measures which could be phased out progressively over a fixed period; a report on results achieved will be presented to Ministers next year.

14. In addition a number of specific trade issues -many of which would be relevant for a new round of negotiations- were addressed:

15. Relations with Developing Countries. Economic and financial interdependence between developed and developing countries is an increasingly important factor in the functioning of the world economy. The diverse and often difficult situations of the developing countries create needs and opportunities for constructive, pragmatic cooperation. Improved trade access and concessional and non-concessional flows will be important means to this end.

Annex DECLARATION ON TRANSBORDER DATA FLOWS (Adopted by the Governments of OECD Member countries on 11th April 1985)

Rapid technological developments in the field of information, computers and communications are leading to significant structural changes in the economies of Member countries. Flows of computerised data and information are an important consequence of technological advances and are playing an increasing role in national economies. With the growing economic interdependence of Member countries, these flows acquire an international dimension, known as Transborder Data Flows. It is therefore appropriate for the OECD to pay attention to policy issues connected with these transborder data flows.

This declaration is intended to make clear the general spirit in which Member countries will address these issues.


Acknowledging that computerised data and information now circulate, by and large, freely on an international scale;

Considering the OECD Guidelines on the Protection of Privacy and Transborder Personal Data and the significant progress that has been achieved in the area of privacy protection at national and international levels;

Recognising the diversity of participants in transborder data flows, such as commercial and non-commercial organisations, individuals and governments, and recognising the wide variety of computerised data and information, traded or exchanged across national borders, such as data and information related to trading activities, intra-corporate flows, computerised information services and scientific and technological exchanges;

Recognising the growing importance of transborder data flows and the benefits that can be derived from transborder data flows; and recognising that the ability of Member countries to reap such benefits may vary;

Recognising that investment and trade in this field cannot but benefit from transparency and stability of policies, regulations and practices;

Recognising that national policies which affect transborder data flows reflect a range of social and economic goals, and that governments may adopt different means to achieve their policy goals;

Aware of the social and economic benefits resulting from access to a variety of sources of information and of efficient and effective information services;

Recognising that Member countries have a common interest in facilitating transborder data flows, and in reconciling different policy objectives in this field;

Having due regard to their national laws, do hereby DECLARE THEIR INTENTION TO:

Bearing in mind the intention expressed above, and taking into account the work being carried out in other international fora, the GOVERNMENTS OF OECD MEMBER COUNTRIES,

Agree that further work should be undertaken and that such work should concentrate at the outset on issues emerging from the following types of transborder data flows:

The GOVERNMENTS OF OECD MEMBER COUNTRIES AGREED to co-operate and consult with each other in carrying out this important work, and in furthering the objectives of this Declaration.

Source: Activities of OECD. Copyright OECD 1985. Reproduced by permission of the Organisation for Economic Co-operation and Development.

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