Canada

Facing up to a barrel of trouble

Robert Lewis July 2 1979
Canada

Facing up to a barrel of trouble

Robert Lewis July 2 1979

Facing up to a barrel of trouble

Robert Lewis

Although Japanese office workers have made the dark colored, light-weight suit a patrimonial uniform, the government recently decreed that short-sleeve summer jackets are in and that neckties can be left at home. The reason: Japan wants to cut back on use of air conditioners in the steamiest of seasons—part of a broader program of energy restraint that has service stations closing on Sundays, the national airline reducing flights and a major boat-builder experimenting with sailing ships. The Japanese, dependent on increasingly costly imported oil for 99 per cent of their needs, fear nothing less than the collapse of their post-war economic miracle.

As the leaders of seven industrial nations, including Canada’s Joe Clark, began arriving for this week’s economic summit in Tokyo along with thousands of officials and reporters, there were few signs that the message of restraint had stuck. The streets of the neonbathed Ginza and the clubs of the Shin-

juku districts were clogged. Even the Kansai Cooperative of necktie-makers struck back, urging a boycott of the country’s biggest bank because employees worked sans cravat. “The government,” sighed a Japanese official, “has left its oil conservation program to the wisdom of the people. But the people have extended little co-operation.” Appropriately, getting the energy message across to the 583 million oilguzzling citizens of the seven nations loomed as the chief benefit of the summit. As a Canadian briefing note put the challenge last week, “Most industrialized nations, including Canada, will be hard pressed to meet current oil product needs for gasoline and simultaneously rebuild stocks of heating oil to desired levels for the coming winter.” Typically, an American official was more plainspoken: “There is no way our leaders can leave Tokyo without taking concrete decisions on what to do about energy, including oil.” In the long-term, warned Saudi Arabian Oil Minister Sheik Yamani, the developing oil crisis could become so crucial “as to make the current situation appear like a mere event of trivial consequence.”

Adding urgency to the mission was a Geneva meeting of the 13-member oilproducers’ cartel, the Organization of Petroleum Exporting Countries (OPEC), scheduled to open 48 hours before the Tokyo summit. As the OPEC deliberations began, their official price for oil was $18.45 per barrel, but “spot” sales over the counter in Rotterdam approached $40 and other states were add-

ing surcharges. When even moderate Saudi Arabia last week declared that it had no intention of raising current production levels, the only uncertainty about Geneva was what the higher OPEC price would be. (Advance predictions were around $20.)

With only 15 per cent of the world’s population, the seven nations assembled at Tokyo consume almost 60 per cent of the world’s oil. Since January, mainly because of production cutbacks in Ayatollah Khomeini’s Iran, prices of fuel have risen by almost 30 per cent. Roughly one third of Canada’s oil is imported (400,000 barrels per day from Arab states and about 200,000 from Venezuela, one of the founders of OPEC). Clark pledged in the recent campaign to make Canada independent of foreign imports by the 1990s and last week Energy Minister Ray Hnatyshyn announced the governmentwill proceed with a previously agreed increase on the price of domestic oil on July 1 to $13.75. The increase is part of the previous Liberal government’s policy of gradually allowing domestic prices to attain world levels and, come September, will add three to five cents to a gallon of gasoline at the pump.

Hnatyshyn was noncommital on the matter of another prearranged $1 increase next January. But at a private meeting with ambassadors from the

summit nations last week, Clark allowed that his government wants to see a faster move to world price levels for domestic oil. He also revealed that while new efforts will be made by Ottawa to encourage energy conservation, there is no plan yet for the kind of mandatory controls that have turned U.S. roadways into combination queues and shooting galleries around gas stations.

Beyond those leaked accounts, little

else was put out about Clark’s plans for the summit. A panel of government officials briefing reporters, in fact, were downright skittish when asked about Canadian initiatives planned for the conference. “It’s difficult to talk about Canada’s concerns,” said one bureaucrat cautiously. “Those are political questions—and views are still evolving in the government.”

Because of his tender 40 years, Clark

was expected to attract attention in a land ruled by gerontocracy. But he shared “new boy” honors with Japanese Prime Minister Masayoshi Ohira and Britain’s Margaret Thatcher, who enjoyed the added distinction of being the first woman summiteer since the gatherings started in 1975.*

The setting for the three formal sessions is the lavish state guesthouse, Geihinkan, which is modelled on Ver-

sailles and features a $48,000 oval table of Japanese cherrywood. Security will be the tightest in Japan’s post-war history, eating up $2.7 million of the announced cost to the hosts of $7.4 million. In all, some 30,000 riot troops will be guarding a downtown core in which nonofficial vehicles—and, at times, pedestrians—will be banned. The Canadian delegation, including Clark, was housed in the tower of the New Otani hotel, the second largest in the world, where the first 20 floors were sealed off as an anti-terrorist buffer zone. The 49 Canadian reporters, technicians and photographers, in a nearby wing, needed an escort to meet with their own government contacts. At the Canadian Embassy alone, 280 troops were on guard and, over Tokyo, all private aviation and helicopter flights were banned.

The reason for the intense security was reports that members of the terrorist Japanese Red Army were making plans for action against the summit. Before the session opened, in fact, a marine distress flare was fired into Ohira’s prime ministerial grounds and a blazing van was rammed into a fence surrounding the summit centre.

One of the leaders of the session was expected to be France’s Valéry Giscard d’Estaing who, on the eve of the summit, ordered lower thermostat settings and strict enforcement of speed limits and imposed a $850-a-year tax on gasguzzling cars. Giscard also has been promoting tough measures to clamp a lid on the spiralling cost of oil paid at Rotterdam—a proposal that was in harmony with talk in Japan of a consumer’s cartel to counter OPEC. The West Germans, major and wealthy players at Rotterdam, feared the French proposal would drive the market away from Europe, leaving the continent helpless in a major supply crisis. At week’s end, however, the French and Germans said they had resolved their differences, raising prospects that the seven summiteers can agree on a common purchasing policy at Rotterdam that stops short of antagonizing the oil-rich OPEC states.

The seven also were expected to extend their commitment last March to a five-per-cent cutback in oil imports and to take steps aimed at development of alternative energy sources.

For Joe Clark the summit was expected to be an exercise in fending off demands—from Japan for more coal, from Americans who want a special deal to participate in the western tar sands development, from the Germans

*Because protocol ranking is determined by a leader’s years in office, Canada drops from first place under Pierre Trudeau to last spot, just ahead of Roy Jenkins, sitting in for the European Community. The other nations: France, the U.S., West Germany, Italy, Britain, Japan.

for uranium for nuclear reactors—until he can tie down specifics in his policy of increasing the proportion of finished or processed goods Canada exports to the world.

Clark also was expected to hear directly from U.S. President Jimmy Carter that the Americans are unhappy with his plan to move the Canadian embassy in Israel. National Security Adviser Zbigniew Brzezinski allowed privately last week that the Clark plan was “ill-advised” —a view shared by Canadian businessmen and Arab states (see page 23).

In Tokyo, Clark will enjoy the luxury of hanging back as more experienced players take over the stage. With a whole government at his disposal, including an Armed Forces 707 and 20 experienced officials, Clark is unlikely to repeat the gaffes of last January when, in Tokyo for example, he complained about translation delays which turned meetings into an “arthritic ballet.” Nonswimmer Clark will even be spared questions about why he isn’t cooling off after hours in the hotel pool: for unexplained security reasons, it has been drained of water.