[G7 Summit-- London, 15=17 July, 1991]

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PRIME MINISTER [JOHN MAJOR]'S STATEMENT ON THE ECONOMIC DECLARATION

17 July 1991

It is customary at the conclusion of the Summit for the Chairman to draw out the main themes of the Declaration. Happy to confirm this tradition.

When we met in Houston a year ago, we welcomed the democratic revolutions around the world and committed ourselves to strengthening and securing democracy.

In the year since Houston, the world order has been challenged, and has risen to this challenge.

Iraq's invasion of Kuwait brought home to all of us the threat that one lawless country can pose to the lawabiding world. We are still living with the political and economic consequences and this Summit has been a productive opportunity to draw some lessons and to deal with some of the wider political and economic issues where our countries, the wealthiest in the world, must give a lead.

Political

A number of these challenges were addressed in the Political Declarations we issued yesterday.

We are determined to strengthen the United Nations system, politically and economically. With the Security Council now working as it should, the UN should be able to prevent fires as well as put them out. It needs the means at its disposal to tackle humanitarian emergencies. The UN must also be one of the means through which we curb the spread of weapons of mass destruction and through which we register and control conventional arms transfers.

The theme of the Summit has ben building world partnership and strengthening the international order. We were very conscious of the global nature of many of the problems we were discussing and of our responsibility to agree policies that did not just suit us but show our commitment to other countries as well.

Our first responsibility, reflected in the Economic Declaration which will be issued very shortly, has been to underpin democracy, human rights, the rule of law and sound economic management. I shall summarise the main themes.

Our shared economic objectives are sustained recovery and price stability. We are determined to maintain the medium term strategy endorsed by earlier Summits. We welcome the fact that there are now increasing signs of economic recovery.

We have committed ourselves to continue the strategy which has contained inflationary expectations and created the conditions for sustainable growth and new jobs.

Crucial to the future prospects of the world economy is the success of the Uruguay Round. However technical the individual issues, the underlying reality is that failure in the GATT Round would lead to protectionism, a decline in trade and a reduction in job opportunities. The political ramifications would be equally devastating.

We discussed this in some depth yesterday and have today committed ourselves to progress in the key remaining areas (market access, agriculture, services and intellectual property).

Each of us has made a personal commitment to work for the success of the negotiations before the end of this year. We will be ready to intervene if differences can only be resolved at the highest level.

Without success in the Uruguay Round, much of our help to the countries of Central and Eastern Europe would be undermined.

We have offered strong support for political and economic reform in those countries. In different ways all the Group of Seven members are contributing knowhow to enable the countries of Central and Eastern Europe to move to market economies. There is no point in having a market economy without a market and that must include access to the markets of the developed countries. We have committed ourselves to that and welcome the progress which has been made.

In the context of Eastern Europe - and more widely - we have discussed environmental challenges and energy. We will all take a full part in the establishment of a European Energy Charter.

We have agreed to work to secure stable energy supplies worldwide, to remove barriers to trade and investment in energy, to encourage high environmental and safety standards and to cooperate on research and development.

Concern for the environment touches on almost every aspect of policy. This was a good moment to take stock, a year before the UN Conference on Environment and Development. We commit ourselves to giving the Conference the necessary political impetus. By the time it opens we aim to achieve:

We support the negotiation of a framework convention on biological diversity, including the protection of ecosystems, if possible to be concluded next year.

We welcome the progress made in the development of a pilot programme for the conservation of the Brazilian tropical forest since the Houston Summit, and will financially support the implementation of the preliminary stage of the programme.

Strengthening the international order implies support for the policies of good government. All the evidence suggests that bad government is a significant factor in the poverty of developing countries.

In the Declaration on arms transfers we noted the recent decisions by several countries to take account of disproportionate expenditure when setting aid programmes. In the Economic Declaration we have commended those countries who have adopted the principles of respect for human rights and for the law; democracy, pluralism and accountability and sound marketbased economic policies.

We have agreed on the need for additional debt relief measures for the poorest, most indebted countries which go well beyond those already granted under Toronto terms. If I may say so, that will build on the initiative I took at the Trinidad meeting of Commonwealth Finance Ministers.

We have, of course, given an undertaking to go on providing humanitarian assistance to parts of Africa facing severe famine. That too links in with our wish to strengthen the ability of the UN to respond swiftly and effectively to natural disasters.

The problems of drug abuse affect all countries, both rich and poor. Action was set in train by previous Summits. This time we have focused on stepping up the fight against money laundering and against the supply of chemicals which can be used to make illicit drugs. We want to strengthen the capacity of law enforcement agencies to target the illicit drug movements. We have asked the Customs Cooperation Council to report on this.

You will find in the Declaration support for moves being made towards the political and economic transformation of the Soviet Union. That will be the story of this afternoon and I shall not say more mow.

Finally, we were all delighted to accept a generous invitation from Chancellor Kohl to go to Munich in a year's time for our next Summit. We look forward to that.

Thank you very much.

Source: Released by the Prime Minister's Office at the London Economic Summit, 17 July 1991.


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