a295  1707  27 Dec 74
Imports 480
By DONALD SANDERS
Associated Press Writer
    WASHINGTON (AP) - A White House study released Friday says that the
current global economic instability, with spiraling prices for food
and critical materials, is ''creating a potential for mistrust and
conflict among nations.''
    The study, focusing on U.S. ability to obtain adequate supplies of
critical raw materials at reasonable prices, took a generally
optimistic picture over the long term but said that price-gouging in
some areas remains a threat.
    ''After two decades of relative economic stability,'' the report
said, ''the world is experiencing a period of turmoil and
uncertainty. Demand has outstripped supply for a large number of
products, inflation rates have soared, and the international monetary
system has been severely strained.
    ''During the last two years, governments throughout the world have
been coping with a convergence of extraordinary, unrelated and
unexpected occurrences - poor harvests, xorbitant crude oil price
hikes and a world economic boom.
    ''While the immediate impact of these events has subsided, we must
all still deal with their numerous ramifications - spiraling
inflation, unstable commodity markets and shifts in income.
    ''Today's unsettling conditions also are creating a potential for
mistrust and conflict among nations. Each nation recognizes more than
ever that other nations' actions an have an adverse effect upon
them. Fortunately, a growing understanding of the problems and the
importance of working together toward resolving them has led to
cooperation in many fields.''
    The study, ordered last March by then President Richard M. Nixon,
was prepared by the National Security Council and the interagency
Council on International Economic Policy.
    It included representatives of the Office of Management and Budget,
the Domestic Council, the Central Intelligence Agency, the General
Services Administration and the Departments of State, Treasury,
Defense, Interior, Commerce and Agriculture.
    The study noted that about one-third of U.S. exports and imports
are nonmanufactured, resulting in a trade surplus of more than $1
billion, with Japan and Western Eurpe the chief markets.
    The study covered nearly a score of critical materials and natural
rubber, but not foodstuffs. It said U.S. dependence on these
materials is modest, about 15 per cent of consumption. This compares
with 75 per cent for Europe and 90 per cent for Japan.
    Over two-thirds of U.S. industrial raw material imports come from
Canada, Australia and South Africa, the study said, while this
country relies on the Soviet Union for significant amounts of just
two important items, chromium and platinum group metals.
    ''Since the beginning of 1974,'' the report said, ''industrial
production has declined in the United States, Western Europe and
Japan. While the prices of some raw materials have continued to rise,
others have leveled off or have declined from their peak levels.''
    
2009pED 12-27
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a009  2158  27 Dec 74
Critical Materials Bjt 440, 2 Takes 560
By DONALD SANDERS
Associated Press Writer
    WASHINGTON (AP) - The world's natural resources will not be
exhausted in the near future but raw material shortages and economic
instability are leading to potential mistrust and conflict among
nations, a White House study says.
    ''The best available data and analysis indicate there are ample
materials in the earth's crust to meet the world's needs for nearly
every material well beyond the remainder of this century,'' said the
study made public Friday.
    ''Many areas of the world are only now being explored for mineral
potential. Vast untapped resources are likely to exist in arctic
regions, many parts of the USSR, China, the Amazon basin and other
areas.
    ''In addition, the mineral potential of the oceans is
considerable . . . Although the oceans' potential may not be tapped
in the near future, the technology of seabed mining is advancing.''
    The study, conducted by the National Security Council and the
Council on International Economic Policy with the cooperation of
other government departments and agencies, was ordered last March by
former President Richard M. Nixon.
    It focused on U.S. dependence on imports of a number of critical
minerals and natural rubber and concluded that this country is
relatively well off, counting on imports for about 15 per cent of
consumption. This compares with 75 per cent dependence by Western
Europe and 90 per cent by Japan.
    But the report said that after two decades of relative economic
stability, a period of turmoil and uncertainty has developed, sparked
by what it termed exorbitant oil price boosts.
    It said that similar embargoes and supply interruptions are
possible, although they have been rare in the past.
    ''Since the end of the Korean war, the only time our economy and
other developed countries were seriously affected by a foreign move
was the recent action by the oil exporting countries,'' the study
said.
    '' . . . There have been few true cartels in the minerals field in
the postwar period and only a single successful one, in diamonds.
Cartels usually break up as a result of deterioration in their
monopoly position as consumers substitute other materials and new
suppliers enter the market at lower prices . . . .
    ''Although few generalizations about these 19 critical materials
are possible, it is clear that none of them approaches petroleum in
terms of its significance to the economy.''
    The study noted that Canada, Australia and South Africa are the
major U.S. suppliers of these materials, ranging from aluminum to
zinc, and said it is unlikely tht any of the three would impose an
embargo against this country, Europe or Japan.
    MORE
    
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a010  2201  27 Dec 74
    WASHINGTON Critical Materials Bjt Take 2: Japan. 120
 
    But the study noted that governments around the world have had to
cope with a number of extraordinary events - poor harvests, the
global economic boom and crude oil price hikes. These events have
resulted in spiraling inflation, unstable markets and shifts in
income, the report said.
    It added:
    ''Today's unsettling conditions also are creating a potential for
mistrust and conflict among nations. Each nation recognizes more than
ever that other nations' actions can have an adverse impact on
them. . . .
    ''We firmly believe that all nations, producers as well as
consumers, benefit from an international economic order that insures
adequate raw materials at reasonable prices.''
    
0102aED 12-28
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