INTERNATIONAL MONETARY POLICY

Despite the rapid increase in oil costs, the policy measures we have taken to improve domestic economic performance have had a continued powerful effect on our external accounts and on the strength of the dollar.  A strong dollar helps in the fight against inflation.

There has also been considerable forward movement in efforts to improve the functioning of the international monetary system.  The stability of the international system of payments and trade is important to the stability and good health of our own economy.  We have given strong support to the innovative steps being taken by the International Monetary Fund and World Bank to help promote early adjustment to the difficult international economic problems.  Recent agreement to increase quotas by fifty percent will ensure the IMF has sufficient resources to perform its central role in promoting adjustment and financing payments imbalances.  The World Bank’s new structural adjustment lending program will also make an important contribution to international efforts to help countries achieve a sustainable level of growth and development.

SUGAR

In 1980, Congress passed U.S. implementing legislation for the International Sugar Agreement, thus fulfilling a major commitment of this Administration.  The agreement is an important element in our international commodity policy with far-reaching implications for our relations with developing countries, particularly sugar producers in Latin America.  Producers and consumers alike will benefit from a more stable market for this essential commodity.

COFFEE

At year’s end, Congress approved implementing legislation permitting the U.S. to carry out fully its commitments under International Coffee Agreement Specifically, the legislation enables us to meet our part of an understanding negotiated last fall among members of the Agreement, which defends, by use of export quotas, a price range well below coffee prices of previous years and which commits major coffee producers to eliminate cartel arrangements that manipulated future markets to raise prices.  The way is now open to a fully-functioning International Coffee Agreement which can help to stabilize this major world commodity market.  The results will be positive for both consumers—­who will be less likely to suffer from sharp increases in coffee prices—­and producers—­who can undertake future investment with assurance of greater protection against disruptive price fluctuations in their exports.

NATURAL RUBBER