TRADE
WITH
ITALY

A BI-MONTHLY PUBLICATION OF THE ITALY-AMERICA CHAMBER OF COMMERCE

MAY-JUNE, 1986

VOL. 40, NO. 3

**VICTOR TESORO**
Chairman,
Publications Committee

**MARIO G. MESSINA**
Co-Chairman,
Publications Committee

**ROY A. ROSSETTI**
Executive Secretary

**FRANCO DE ANGELIS**
Advertising Manager

CONTENTS

<table><tr><td>Comments by IACC President<br>PLANNING THE 100th ANNIVERSARY</td><td>4</td></tr><tr><td>FOCUS ON ITALY</td><td>7</td></tr><tr><td>IACC BUSINESS CONFERENCE</td><td>9</td></tr><tr><td>Feature Article<br>THE TOKYO SUMMIT AND<br>UNITED STATES-ITALY RELATIONS<br>By Mario d'Urso</td><td>11</td></tr><tr><td>ITALIAN BRIEFS</td><td>17</td></tr><tr><td>Feature Article<br>KISSINGER TALKS BUSINESS<br>By Henry Kissinger</td><td>19</td></tr><tr><td>EC AND WORLD NEWS</td><td>22</td></tr><tr><td>US BRIEFS</td><td>31</td></tr><tr><td>FOCUS ON USA</td><td>37</td></tr><tr><td>MEMBER NEWS</td><td>41</td></tr><tr><td>INDEX OF ADVERTISERS</td><td>42</td></tr><tr><td>ECONOMIC INDICATORS</td><td>44</td></tr></table>

TRADE WITH ITALY (ISSN. #0041-0551), a bi-monthly publication of the Italy-America Chamber of Commerce, Inc., is a digest of news and data concerning trade between the U.S. and Italy, selected from official Italian and U.S. government reports and from leading national and international business and industrial publications. Views expressed in signed articles or news items do not necessarily reflect the opinion of the Chamber or its members. Subscription rates: U.S. and Canada, $36.00 per year; Italy, 63,000 Lire per year. Second class postage paid at New York, N.Y. Postmaster: send address changes to TRADE WITH ITALY, c/o Italy-America Chamber of Commerce, 350 Fifth Avenue, New York, N.Y. 10118. Production by Galvanic Printing & Plate Co., Inc.

MAY-JUNE, 1986

3

COMMENTS
BY
THE PRESIDENT

PLANNING THE
100th ANNIVERSARY
ACTIVITIES AND
OTHER UPDATES

By JAMES H. LUNDQUIST
President IACC

May 29th was one of those beautiful Manhattan days, yet that afternoon many of us lingered inside the Grand Ballroom of the Pierre Hotel in a state of exultation and justified satisfaction. After observing favorable reactions to another Business Conference Luncheon—now a regular Italy-America Chamber event, it occurred to us that we are firmly an integral part of the constellation of United States business and financial communities. Three hundred fifty members and guests had listened intently as Henry Kissinger and Mario d'Urso commented with elegant simplicity on world economic and political events. Unique as this occasion seemed, it was only a part of our continuum; in prior months we had hosted meetings with Ernesto Pascale and Andrew Young. The Chamber has embarked on this schedule of highly relevant public affairs meetings as a way to help our members and their guests keep up-to-date on the Chamber and its proper place in America's politico-economic Establishment, as well as numerous activities in behalf of our commodity and service groups in Washington and elsewhere. Indeed, we are as modern as tomorrow!

At the working level of our endeavors, the Chamber Headquarters will over the next 12 months embark upon a program to provide members with an exchange of economic and commercial data between America and Europe through the auspices of CERVED, the leading business data bank operated through the Italian Chambers.

Italian industrial reports covering much of Europe will be available on a modest fee basis to members and, of course, the entire U.S. business community. This program, coupled with our ex-

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TRADE WITH ITALY

FEATURE
ARTICLE

LC

I had lunch with the Chairman of General Motors at the Bohemian Grove, which is an institution not explicable to foreigners, but at any rate, there is no incentive there not to say what you think. He was talking about high technology, and he was saying that America was going to get so far ahead in research once it puts its real technological effort forward it would be a very one-sided competition. And, I asked him whether there was any part of Europe which was keeping pace, and again he said Italy, which fifteen years ago could not have been said. It is a remarkable tribute to a people, that having survived for thousands of years, and having God knows how many city-states on its territories, had more parties than one could count in its Parliament.

It has had to learn, through practical experience, that there are some things which government must be indulged, including committing them to pass stupid regulations, and there are some things in which government must be ignored, including stupid regulations. So, it has found a marvelous compromise between the needs of occasional rotation in office to keep this end-core group in power all the time.

All our great professors of political science who talk about unstable Italian governments have really never taken the trouble of analyzing who were in these Italian governments over the period of years. They're much more stable than our governments if you look at them for twenty years. No Italian government comes in and starts a reassessment of all the previous policies as if history began when they took office. Not only as if they wanted to change the world, but as if they had invented the world, which is the American specialty. And there has been an amazing continuity in politics, an amazing continuity in foreign policy.

For people with slower and more systematic minds, I was asked on Italian television the other day what I thought of a certain Italian politician. I said I thought very well of him. I had only one slight handicap, he usually was so subtle that I usually understood the day after I met him what he had really said to me, but it was too late for me to give him an answer. But, he had accomplished his purpose, he had gotten through his meeting with me without telling more than what he thought I needed to know and avoided too strenuous a cross-examination.

At any rate, I think there has been a tremendous wisdom and tremendous achievement, and one only has to look at what has been happening in New York State to see who is gradually taking over this country. So when people were kind enough earlier this year to suggest that I might run for Governor, I thought I'd pick some other suicidal mission rather than go up against an Italian governor, by the name moreover, of Mario.

It took great importance, incidentally, that if continuity is at the service of European-American relations, my special field of course is foreign policy, and Italy rarely takes dramatic initiatives but has always stood for a very close European-American relationship, then it has always understood the fundamental necessities. Now, at this moment, there are problems in European-American relations. The institutions that exist now were mostly formed thirty years ago when conditions were quite different. Thirty years ago one didn't think of security threats that originated outside of Europe but concentrated primarily on security threats that came from the East in Europe. Thirty years ago the problem was how to restore the economic health of Europe and not how to build an international economic community for world prosperity. And many of these institutions, as your Ambassador and I were discussing at lunch, were formulated for one purpose, don't discuss the other, so it is very hard to get a coherent view of things.

I have been personally urging an adaptation of traditional thinking, not because I am less interested in Europe, quite the contrary. How can one be born in Europe, as I have been, and not remain closely tied or visit Europe, especially Italy, as often as I do, and not feel the affinity which has been our inspiration, our political, economic and spiritual necessity. No institution should simply repeat, or set of relationships should simply repeat liturgically what has been written down thirty years ago. Living organisms are not legal documents, and the first thing a statesman should do when he faces a crisis is not to call his lawyer to see what his legal application is, but to look at the dynamics of a situation to see what needs to be done.

What needs to be done is to analyze the change in security from the days of nuclear preponderance to a present period when one nuclear explo-

20

TRADE WITH ITALY

FEATURE
ARTICLE

KISSINGER
TALKS BUSINESS

By HENRY A. KISSINGER
Chairman
Kissinger Associates, Inc.

The following feature article is an excerpt
from a speech delivered by Henry Kissinger to
the guests of the Italy-America Chamber of
Commerce at the Pierre Hotel in New York
City. Henry Kissinger introduced Mario d'Urso,
Managing Director of Shearson Lehman Broth-
ers, Inc., with these comments at the confer-
ence entitled "The Tokyo Summit And United
States-Italy Relations".

"I must say it is a great pleasure for me to talk to a group of Italo-Americans because I think Italy has given a spectacular example of how to have a modern state and maintain human individuality. It's a problem that really very few modern societies, if any, have managed to solve. They either take themselves too seriously, or not seriously enough.

The other day I was at the European Com-
mission and I asked Chairman Delours which
part of Europe was the most dynamic at this
moment, the most creative, the most inventive,
and he said Italy, particularly Northern Italy.
Now when a Frenchman volunteers this about
Italy, and he's also a "politicknezier" on top of
it, you can take that very seriously. It's true,
and it's amazing for all who had all the tradi-
tional stereotypes 10-15-20-years ago.

MAY-JUNE, 1986

19

FEATURE
ARTICLE

sion in the Soviet Union is having global consequences. And this is a fact that we cannot ignore by repeating old slogans. And what needs to be done is not to debate necessarily whether the United States was right in every step it has taken on terrorism—although I have supported the American actions—but to relate, to find some forum where the dangers coming from outside Europe can be discussed in some relation to the dangers inside of Europe, and where one has the courage to say if we disagree on this, how do we handle the disagreement. We're all mature, we don't have to agree on everything. It would be unheard of if we agreed on everything.

And third, the huge positive things that need to be done, we've been talking about the world debt crisis as if it were a problem for bankers. It's not a problem for bankers; it's a problem of the political stability and hope of large parts of the world, many of which, in fact, are populated by people of Italian origin. And where without hope, the political and, in time, even security

consequences are going to be staggering. To run this every six months into an exercise of who can lend whom the money to keep meeting the accounting requirements of distant beaucracies, is a total misunderstanding of the situation. In fact, we should look at that problem as a great opportunity because those are the areas of the world that have the greatest potential. If America had approached Europe in the late forties with the attitude of how it would repay its war debts and how it could tighten its belt in order to repay whatever it owed, we would have had chaos in Europe.

So, I'm saying in areas not covered by existing treaties, there are tremendous opportunities to work together and especially countries that have no great hang-ups about classical positions, like Italy, and a people distinguished by this great common sense and practicality, and above all humanity as the Italian people. An Italian government structure now can make a huge contribution." ■

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MAY-JUNE, 1986

21

BUSINESS
DIGEST

# EC & WORLD NEWS

## EC Jobless Rate Falls to 11.2%

The jobless rate in the European Community without Spain, Portugal, and Greece fell to 11.2% in April from 11.5% in March, Eurostat, the EC's statistics agency, reported.

It said the number of unemployed in the nine EC nations was 12.8 million, down from 13.1 million the previous month.

"The drop in unemployment mainly affected men," Eurostat said. "Male unemployment fell by 3.4% compared with a drop of only 0.5% in female unemployment."

It gave no average jobless rate for all EC members because of difficulties in harmonizing statistics from Greece, Spain, and Portugal with those of the rest of the EC.

Eurostat said, however, the number of jobless in all 12 EC nations in April was 16 million. ☐

## US Moves Worry EC Countries

European Community countries, already caught up in a farm trade war with the United States, expressed disquietness about the latest U.S. protectionist moves.

There was no formal response from the EC Commission to the House of Representatives' vote Thursday in support of tougher trade laws. Community officials expressed confidence that, even if the bill were passed by the Senate, it eventually would be vetoed.

Nevertheless, the fact that U.S. protectionist pressures remains strong as ever while a new General Agreement on Tariffs and Trade round designed to liberalize world trade is under preparation, is of deep concern to Common Market countries. ☐

## EC Insurers Urged to Create Free Market

Lloyd's of London chairman Peter Miller made a call for greater freedom of services in insurance within the European Community, partly as a way of competing better with the U.S. insurance market.

Speaking in Rome to the Association of Italian Insurance Brokers, Mr. Miller said it was in the interest of all European insurers to create a

competitive internal market if it helps them to compete better with companies from other parts of the world.

The twelve nations in the EC contain some 2,000 domestic insurance companies, whose average premium per company is some $24 million.

In the United States the average premium per company is $41 million and in Japan $300 million. This could mean that European insurance companies are in line for mergers and acquisitions, especially since the weak market in reinsurance has largely disappeared, suggested Mr. Miller. ☐

## US, EC Urged to End Grain Trade Dispute

The United States and the European Community must settle their gain trade differences and find ways to cooperate and maintain competition in the interests of trading partners and clients, Coceral, the EC's Grain and Feed Trade Association said.

Coceral President Rudolf Boehm said it is inopportune for the EC and the United States to accuse each other of subsidizing and distorting competition.

The United States attacks the EC's export restrictions as being against free market principles. However, the General Agreement in Tariffs and Trade subsidies code explicitly authorizes restitutions as long as they permit no more than an equitable market share, neither undercutting domestic prices or driving other exporters from a given market, Mr. Boehm said.

The United States, under its bonus incentive commodity export program, has heavily subsidized wheat and grain sales, in addition to "massive internal subsidies," which have repercussions on world markets and on long-standing export credit programs, Mr. Boehm said.

Talk of trade war between the United States and EC is exaggerated and Coceral believes in the development of world collaboration between the two great trading blocs, he said.

Subsidies are not the only problem for the world grain market, he said. ☐

*(continued on page 29)*

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TRADE WITH ITALY