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Coming of Age: The European Community and The Economic Summit

Susan Hainsworth

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1979: TOKYO (28-29 JUNE)

The months prior to the Tokyo summit saw world attention riveted upon the Iranian revolution and the political and economic ramifications of Khomeini's rise to power. The crisis was accentuated by a decision made by OPEC nations on the eve of the Tokyo summit to dramatically increase oil 18p rices by 24%. The second oil shock rendered inoperative the macroeconomic coordination package that had been constructed at Bonn. The Tokyo meeting was thus devoted almost exclusively to crisis management of the energy issue. The EC was represented by French President Giscard d'Estaing in his capacity as President of the European Council, and by Roy Jenkins as President of the Commission.

At the European Council meeting in Strasbourg (21-22 June), a decision was reached to maintain overall crude oil imports for 1980-85 at an annual level which did not exceed that of 1978. While France would have preferred to set individual country import quotas, opposition from West Germany and Britain prevented any setting beyond an overall figure for the Community.41 Thus, the European summit partners reached the Tokyo meeting with a prior consensus on oil import targets, providing a basis for summit discussions and catalysing progress toward compromise between the EC, US, and Japan on long term oil consumption targets for the industrialised world.

However, whereas the Strasbourg European Council solution had been based upon EC-wide targets, the US insisted upon the establishment of quotas on a country-by-country basis. This position had been made clear by the Carter Administration before the summit, since the U.S. held that a collective target for oil imports permitted the Europeans to avoid a sacrifice commensurate with that likely to be suffered by the U.S. and Japan.42 On this matter, the U.S. enjoyed the support of the Japanese and Canadians at the negotiating table.

Stressing that France had an individual national position on the energy question which was not necessarily in accordance with EC consensus, Giscard proposed a compromise that would permit the EC members to accept national import targets if the U.S., Canada, and Japan would agree to long-term targets extending to 1985.43 Consequently, the Strasbourg European Council position was overturned at the summit. This defeated the Commission's preferences, enraged the smaller EC member states who were not present, and prompted accusations that the Big Four had sold out to their summit partners. Thus, at Tokyo an EC consensus was overruled, basically due to French insistence upon autonomy and refusal to support the European Council target decisions in the face of U.S. and Japanese opposition. This signified a sizeable defeat for the Community at the summittable.

Partially offsetting this defeat was a positive reference to the EMS in the final communiqué. The summit powers welcomed the strengthening of the EMS, stating that it had contributed to the stabilisation of the foreign exchange market, and to the sound development of the global economy.

Toronto, January 1990

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