Declaration of the Ottawa Summit
July 21, 1981
Relations with Developing Countries
East-West Economic Relations
- We have met at a time of rapid change and great challenge
to world economic progress and peace. Our meeting has served
to reinforce the strength of our common bonds. We are conscious
that economic issues reflect and affect the broader political
purposes we share. In a world of interdependence, we reaffirm
our common objectives and our recognition of the need to take
into account the effects on others of policies we pursue. We
are confident in our joint determination and ability to tackle
our problems in a spirit of shared responsibility, both among
ourselves and with our partners throughout the world.
- The primary challenge we addressed at this meeting was
the need to revitalize the economies of the industrial
to meet the needs of our own people and strengthen world
- Since the Venice Summit the average rate of inflation
in our countries has fallen, although in four of them inflation
remains in double figures. In many countries unemployment has
risen sharply and is still rising. There is a prospect of
economic growth in the coming year but at present it promises
little early relief from unemployment. The large payments
originating in the 197980 oil price increase have so far been
financed without imposing intolerable adjustment burdens but are
likely to persist for some time. Interest rates have reached
record levels in many countries and, if long sustained at these
levels, would threaten productive investment.
- The fight to bring down inflation and reduce unemployment
must be our highest priority and these linked problems must be
tackled at the same time. We must continue to reduce inflation
if we are to secure the higher investment and sustainable growth
on which the durable recovery of employment depends. The
use of a range of policy instruments is required. We must
our peoples in a greater appreciation of the need for change:
change in expectations about growth and earnings, change in
and labor relations and practices, change in the pattern of
change in the direction and scale of investment, and change in
energy use and supply.
- We need in most countries urgently to reduce public
where our circumstances permit or we are able to make changes
within the limits of our budgets, we will increase support for
productive investment and innovation. We must also accept the
role of the market in our economies. We must not let
measures that may be needed to ease change become permanent forms
of protection or subsidy.
- We see low and stable monetary growth as essential to
reducing inflation. Interest rates have to play their part in
achieving this and are likely to remain high where fears of
remain strong. But we are fully aware that levels and movements
of interest rates in one country can make stabilization policies
more difficult in other countries by influencing their exchange
rates and their economies. For these reasons, most of us need
also to rely on containment of budgetary deficits, by means of
restraint in government expenditures as necessary. It is also
highly desirable to minimize volatility of interest rates and
exchange rates; greater stability in foreign exchange and
markets is important for the sound development of the world
- In a world of strong capital flows and large deficits
it is in the interests of all that the financial soundness of
the international banking system and the international financial
institutions be fully maintained. We welcome the recently
role of the IMF in financing payments deficits on terms which
encourage needed adjustment.
- In shaping our longterm economic policies, care should
be taken to preserve the environment and the resource base of
Relations with Developing Countries
- We support the stability, independence and genuine
of developing countries and reaffirm our commitment to cooperate
with them in a spirit of mutual interest, respect and benefit,
recognizing the reality of our interdependence.
- It is in our interest as well as in theirs that the
developing countries should grow and flourish and play a full
part in the international economic system commensurate with
capabilities and responsibilities and become more closely
- We look forward to constructive and substantive discussions
with them, and believe the Cancun Summit offers an early
to address our common problems anew.
- We reaffirm our willingness to explore all avenues of
consultation and cooperation with developing countries in
forums may be appropriate. We are ready to participate in
for a mutually acceptable process of global negotiations in
offering the prospect of meaningful progress.
- While growth has been strong in most middleincome
countries, we are deeply conscious of the serious economic
in many developing countries, and the grim poverty faced
by the poorer among them. We remain ready to support the
countries in the efforts they make to promote their economic and
social development within the framework of their own social
and traditions. These efforts are vital to their success.
- We are committed to maintaining substantial and, in
many cases, growing levels of Official Development Assistance
and will seek to increase public understanding of its importance.
We will direct the major portion of our aid to poorer countries,
and will participate actively in the United Nations Conference
on the Least Developed Countries.
- We point out that the strengthening of our own economies,
increasing access to our markets, and removing impediments to
capital flows contribute larger amounts of needed resources and
technology and thereby complement official aid. The flow of
capital will be further encouraged in so far as the developing
countries themselves provide assurances for the protection and
security of investments.
- The Soviet Union and its partners, whose contributions
are meager, should make more development assistance available,
and take a greater share of exports of developing countries,
respecting their independence and nonalignment.
- We will maintain a strong commitment to the international
financial institutions and work to ensure that they have, and
use effectively, the financial resources for their important
- We attach high priority to the resolution of the problems
created for the nonoil developing countries by the damaging
on them of the high cost of energy imports following the two oil
price shocks. We call on the surplus oilexporting countries to
broaden their valuable efforts to finance development in nonoil
developing countries, especially in the field of energy. We
ready to cooperate with them for this purpose and to explore with
them, in a spirit of partnership, possible mechanisms, such as
those being examined in the World Bank, which would take due
of the importance of their financial contributions.
- We recognize the importance of accelerated food production
in the developing world and of greater world food security, and
the need for developing countries to pursue sound agricultural
and food policies; we will examine ways to make increased
available for these purposes. We note that the Italian
has in mind to discuss within the European Community proposals
to be put forward in close cooperation with the specialized UN
institutions located in Rome for special action in this field
primarily directed to the poorest countries.
- We are deeply concerned about the implications of world
population growth. Many developing countries are taking action
to deal with that problem, in ways sensitive to human values and
dignity; and to develop human resources, including technical and
managerial capabilities. We recognize the importance of these
issues and will place greater emphasis on international efforts
in these areas.
- We reaffirm our strong commitment to maintaining liberal
trade policies and to the effective operation of an open
trading system as embodied in the GATT.
- We will work together to strengthen this system in the
interest of all trading countries, recognizing that this will
involve structural adaptation to changes in the world economy.
- We will implement the agreements reached in the
Trade Negotiations and invite other countries, particularly
countries, to join in these mutually beneficial trading
- We will continue to resist protectionist pressures,
since we recognize that any protectionist measure, whether in
the form of overt or hidden trade restrictions or in the form
of subsidies to prop up declining industries, not only undermines
the dynamism of our economies but also, over time, aggravates
inflation and unemployment.
- We welcome the new initiative represented by the proposal
of the Consultative Group of Eighteen that the GATT Contracting
Parties convene a meeting at Ministerial level during 1982, as
well as that of the OECD countries in their program of study to
examine trade issues.
- We will keep under close review the role played by our
countries in the smooth functioning of the multilateral trading
system with a view to ensuring maximum openness of our markets
in a spirit of reciprocity, while allowing for the safeguard
provided for in the GATT.
- We endorse efforts to reach agreement by the end of
this year on reducing subsidy elements in official export credit
- We are confident that, with perseverance, the energy
goals we set at Venice for the decade can be achieved, enabling
us to break the link between economic growth and oil consumption
through structural change in our energy economies.
- Recognizing that our countries are still vulnerable
and energy supply remains a potential constraint to a revival
of economic growth, we will accelerate the development and use
of all our energy sources, both conventional and new, and
to promote energy savings and the replacement of oil by other
- To these ends we will continue to rely heavily on market
mechanisms, supplemented as necessary by government action.
- Our capacity to deal with shortterm oil market problems
should be improved, particularly through the holding of adequate
levels of stocks.
- In most of our countries progress in constructing new
nuclear facilities is slow. We intend in each of our countries
to encourage greater public acceptance of nuclear energy, and
respond to public concerns about safety, health, nuclear waste
management and nonproliferation. We will further our efforts
in the development of advanced technologies, particularly in
- We will take steps to realize the potential for the
economic production, trade and use of coal and will do everything
in our power to ensure that its increased use does not damage
- We also intend to see to it that we develop to the fullest
possible extent sources of renewable energy such as solar,
and biomass energy. We will work for practical achievements at
the forthcoming United Nations Conference on New and Renewable
Sources of Energy.
- We look forward to improved understanding and cooperation
with the oil-exporting countries in the interests of the world
East-West Economic Relations
- We also reviewed the significance of EastWest economic
relations for our political and security interests. We
that there is a complex balance of political and economic
and risks in these relations. We concluded that consultations
and, where appropriate, coordination are necessary to ensure
in the field of EastWest relations, our economic policies
to be compatible with our political and security objectives.
- We will undertake to consult to improve the present
system of controls on trade in strategic goods and related
with the USSR.
- We are convinced that our democratic, free societies
are equal to the challenges we face. We will move forward
and with all countries ready to work with us in a spirit of
and harmony. We have agreed to meet again next year and have
accepted the invitation of the President of the French Republic
to hold this meeting in France. We intend to maintain close and
continuing consultation and cooperation with each other.
Source: Canada, Department of External Affairs,
Summits, 1975-1987: Declarations (Ottawa, 198-): Tab 14,
1-11 [unpublished]; U.S., Department of State,
No. 2053 (August 1981): 8-9; Economic Summits, 1975-1986:
Declarations (Rome: Istituto Affari Internazionali,
77-83; Great Britain, Foreign and Commonwealth Office,
of Annual Economic Summits, 1975-1986 (London, 198-):
A7, Ottawa, 1-6 [unpublished].
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