(2 of 4)
His proposals for reform: 1) central banks should phase out national currencies as a reserve asset and substitute an international form of asset, preferably one issued by the International Monetary Fund; 2) all major currencies, particularly the dollar, should be convertible into this new asset; 3) governments should continue to "demonetize" gold by not buying it in the private market, but they should be free to sell gold in the market, to each other, or to the IMF at any agreed price; 4) domestic policies or exchange rates, or both, should be adjusted whenever a country's foreign exchange reserves rise or fall substantially; 5) countries should harmonize interest rates in order to avert flows of short-term money seeking maximum earnings. Triffin also urged U.S. officials to "stop triggering bearish speculation in the dollar. They have done so repeatedly in the past by arguing for exchange-rate flexibility and hailing as a victory every upward valuation % of foreign currencies and every devaluation of the dollar."
FREE TRADE
Many of the executives felt that free trade is still in danger, though the Europeans were less apprehensive than when they met in Washington in 1971. Some suggested that the world was moving toward a different definition of free trade. Pierre Waltz, general director of Societe Suisse pour ITndustrie Horlogere, even stated: "Free trade, as visualized in the last century, is dead. We are in a situation of haphazardly controlled free trade. If Texas cattle imports seriously disrupted the outdated European agricultural system, no Texas cattle would be allowed into Europe. If Japanese shipyards threaten American shipyards, ways will be found to protect the American yards." Sweden's Pehr Gyllenhammar, president of Volvo, agreed that it is uncomfortable to be invaded by the products of a country that has a keener competitive edge. "But," he asked, "will the U.S. recognize that because of its loss of competitive ability, it will continue to be invaded by the Japanese and others?"
Hendrik Van Riemsdijk, president of Philips' Glo-eilampenfabrieken, asserted: "We in The Netherlands are free traders. As far as the Japanese penetration of Europe is concerned, I would like to point out that it is the excessive scale on which Japanese imports are increasing that constitutes a threat to employment. The Benelux governments are advocates of greater freedom for imports of European products into Japan itself." Folke Lindskog, chairman of Svenska Kullagerfabriken (S.K.F.), emphasized that "the Japanese protect their home market. They are reluctant to allow us to establish ourselves as manufacturers in Japan, although they are free to establish 100% ownership of factories in the U.S. and in important European countries." Many speakers, including Lindskog, thought that Japan was starting to soften its attitudes because of fears of retaliation.
ENERGY AND ENVIRONMENT