The MacNeil/Lehrer NewsHour

INTRO

ROBERT MacNEIL: Good evening. The United States announced today it is pulling out of UNESCO, the economic, social and cultural arm of the United Nations, saying it had become hostile to free institutions. With a senior State Department official, the head of UNESCO in New York, and a former U.S. ambassador to the United Nations, we examine why Washington is leaving UNESCO and what it means. Jim Lehrer is off; Judy Woodruff's in Washington. Judy?

JUDY WOODRUFF: Also tonight, Robin, we'll report on a move down in the leading economic indicators and find out what the secretary of commerce says it means. Staying with the economy, we'll be looking at what many think is a central problem: the unbalanced balance of trade. And finally, jazz, the "cool" music. We see it interpreted through the art of Henri Matisse.

After a six-month review, the Reagan administration has announced its decision to have the United States pull out of UNESCO, the United Nations Educational, Scientific and Cultural Organization. The U.S. helped found UNESCO and provides one fourth of its budget. But Secretary of State Shultz told the head of UNESCO in a letter that the decision to leave was inescapable given the way the organization is presently constituted and governs itself. American officials have complained for years that the agency is dominated by the Soviet Union and developing Third World countries. Today a State Department spokesman said that UNESCO has "developed a consistent hostility toward the basic institutions of a free society." Assistant Secretary of State Gregory Newell had this to say.

GREGORY NEWELL, State Department: UNESCO policies for several years have served anti-U.S. political ends. The Reagan administration has frequently advised UNESCO of the limits of U.S. toleration or its misguided policies, its tendentious programs, and its extragavant budgetary mismanagement. For nearly three years new, the administration has applied to UNESCO the same goals and priorities that guide our relations to all multilateral institutions. But UNESCO alone, among the major U.N. organizations, has not responded. The Rpesident has concluded that U.S. participation in UNESCO as it is currently organized, directed and focused, does not serve the interests of the United States.

WOODRUFF: As we said, we'll be examining this whole issue in detail a little later in the program. Robin?

MacNEIL: The government's index of leading economic indicators, the chief gauge of coming economic performance, went down last month for the first time in 14 months. The decline was small -- four tenths of a percent. The Commerce Department called it modest and not a cause for worry. The index is calculated from a dozen statistics covering production, employment, prices and other areas of economic activity. All through the 1981-82 recession the index wavered up and down. Then, in September of last year, as recovery began, the index began an unbroken climb upwards. To discuss what today's decline means we have Commerce Secretary Malcolm Baldrige. Mr. Secretary, does the November decline mean that the recovery is sputtering out?

Sec. MALCOLM BALDRIGE: No, it doesn't, Robin. I'd say the first statement to make on that would be not to worry. We would have cause for worry if the 9% growth rates and 7% growth rates and the GNP that we've seen this year had continued, because that would have meant an overheated economy, too much inflation as a result, and so forth. The leading indicators after having gone up for so many months, simply are shifting, or showing a shift now, between those high GNP growth rates and what we expect to be the moderate GNP growth next year of four to four-and-a-half percent.

MacNEIL: That was the forecast by all the administration's economists just a week or so ago. Is this falloff in the indicators consistent with that 4 1/2%? Is that still the projection?

Sec. BALDRIGE: It's absolutely consistent. As a matter of fact, if we hand't had a falloff somewhere, it's very difficult to get from a nine to seven percent GNP growth down to the four to four-and-a-half percent. We want the four to four-and-a-half percent rate, not the higher rate, because it means that the recovery will last longer. So this is consistent and it's not anything to worry about.

MacNEIL: It doesn't mean -- today's figure doesn't mean that GNP projection for next year might be lower than 4 1/2%?

Sec. BALDRIGE: No. No, it doesn't. You'll see some blips in the leading indicators. They're made up of 12 different kinds of projections that end up with a certain end number, and that varies from time to time. It's the general trend of those indicators that we have to watch. And this will not be the last down blip, I might say.

MacNEIL: Maybe next month might be down?

Sec. BALDRIGE: Well, I don't know about next month, but during the next year we'll have two or three of them, I'm sure, based on the past experience. But the trend will be up, and it's normal process.

MacNEIL: Let me ask you about a couple of elements in the indicators. Some economists watching the recovery say so far it's been led by consumers buying things, and in fact that part of the November indicator showed an upward trend. But that so far that hasn't been matched by businesses and industry having a lot of new orders for plant and equipment. And in fact the November indicator showed a decline in that area. Now, could this be a danger sign?

Sec. BALDRIGE: Well, any sign, if it keeps on for too long, of course, on the down side, could bring about a dangerous situation. That's not the case in capital spending, though. If you took the last six recessions on year after, and averaged them out, and this recovery one year later, after it started, business-fixed investment has gone up about 9% compared with 6% of the average of the last six recoveries. So we're somewhat ahead of the game. But don't forget, business-fixed investment, capital spending, those kinds of expenditures come later in the recovery. They help sustain the recovery in the future. So we expect to see them kick in much stronger in 1984 than they have in '83, but they've already started to turn, that's the point. You'll see for the last quarter it'll be up, not down.

MacNEIL: Well, thank you. Judy?

WOODRUFF: In Argentina, former President Jorge Videla and eight other officials have been charged with mass murder, torture and kidnapping, crimes they allegedly committed during their campaign against leftists in the 1970s. The charges were draftedby the new civilian president of Argentina, Raul Alfonsin, who said the crimes alleged were committed against thousands of persons. During the campaign against leftists which took place after Videla's group overthrew President Isabel Peron in 1976, at least 6,000 people disappeared. Within the last several days 75 secretly buried bodies have been recovered from various cemeteries. John Eason of Visnews has a report.

JOHN EASON, Visnews [voice-over]: The grisly scene in the Marino graveyard near Buenos Aires is being reenacted in cemeteries all over the country as the authorities continue their search for the remains of thousands of people who disappeared during the early '70s, when the military waged its so-called dirty war against the left-wing guerrillas. Workers at the graveyard had tipped off police that the army had buried a number of bodies in unmarked graves. Now the area is being combed by forensic scientists seeking to identify the bodies. The search has been going on for more than a year but has received more publicity because the new president, Senor Raul Alfonsin, has just signed a law repealing the amnesty issued by the military junta to members of the armed forces involved in the dirty war.

WOODRUFF: Since September 1982, more than a thousand bodies have been found in unmarked graves in Argentina. Robin?

MacNEIL: Syria's defense minister, Mustafa Tlass, said today that the captured American flyer, Lieutenant Robert Goodman, won't be released until U.S. ships leave Lebanon. But that did not deter presidential candidate Jesse Jackson, who left Washington for Syria today with hopes of securing Goodman's release. Jackson was accompanied to Washington National Airport by Syrian Ambassador Rafic Jouejati and was asked by reporters about the Syrian defense minister's statement.

Rev. JESSE JACKSON, Democratic presidential candidate: We're not going to be diverted. We hope to meet with President Assad again, as we have before; we hope to meet with top religious authorities; we hope to meet with Lieutenant Robert Goodman; and we hope that if our prayers prevail that we will be able to free him. Our basic appeal to President Assad as well as to President Reagan is to put Lieutenant Goodman in a humanitarian category and elevate him above the political fray.

REPORTER: Mr. Ambassador, what assurances have you been able to give Reverend Jackson from your government about this trip?

Amb. RAFIC JOUEJATI: When the Reverend speaks, there is no room for me to comment.

REPORTER: Do you think he'll be able to see President Assad?

Amb. JOUEJATI: I think so.

MacNEIL: Jackson, who is going without Reagan administration backing, planned a private stopover in New York with Lieutenant Goodman's mother, and was due to arrive in Damascus Friday evening. Judy? U.S. UNESCO Pullout

WOODRUFF: As we reported earlier, the United States has notified UNESCO, the United Nations Educational, Scientific and Cultural Organization, that it intends to withdraw its membership. Member nations must give a year's notice before they pull out, so U.S. funding of the organization will continue through 1984. But American unhappiness over UNESCO has been growing for some time, based on complaints about its management and especially its anti-U.S. slant. For that reason UNESCO prepared a film a little more than a year ago to tell American audiences what UNESCO does and how Americans participate in it.

[clip from "Bridges of Understanding"]

LEONARD NIMOY, actor: UNESCO was founded in 1946. Now, the United States played a big part in founding it. Americans . . .

WOODRUFF [voice-over]: Since its creation 37 years ago, UNESCO has led the drive to increase world literacy, stressing its Teaching Teachers programs as well as building schools. The film points out that American schoolchildren, like these in New Jersey, benefit from UNESCO programs which permit young students all over the world to exchange ideas and information. UNESCO also coordinates scientific exchanges. Here American oceanographers gather and analyze water samples in pollution studies to be shared with scientists in other nations. UNESCO claims that the results of U.S. studies of grazing lands and pasture grasses in Colorado will eventually provide arid nations with the data necessary to develop their own agricultural resources. UNESCO also plays a major role in preserving, protecting and restoring the world's major cultural and natural resources. It has created a so-called world heritage list of 100 sites to be preserved from natural and human destruction. The list includes the ancient temples of the Nile, the Acropolis of Greece, and even the Grand Canyon and the Florida Everglades. And from the Paris headquarters of UNESCO come hundreds of books, pamphlets and broadcasts in many languages, all part of the organization's commitment to the exchange of ideas and information.

But UNESCO's critics see some of its programs differently, charging that such exchanges are taking on increasingly anti-Western, anti-United States overtones. It is also, they say, becoming financially unwieldy. Despite U.S. opposition, UNESCO adopted a budget of $374 million for 1984-85, 13 million more dollars than the current budget. That rebuff angered the Reagan administration, which had asked for a freeze on all U.N. spending. In 1974 UNESCO member nations voted to withhold cultural aid from Israel, a symbolic gesture that antagonized the United States. UNESCO ended the exclusion two years later, but the incident is repeatedly cited as an example of UNESCO's politicization. Recently the controversy over freedom of the press has stirred anti-UNESCO publicity in Western countries. Third World and Soviet-bloc nations are pushing for what they call a new order in communications. Opponents say it would allow governments to censor national and foreign correspondents.

[on camera] The man in charge of the State Department's review of UNESCO and responsible for overseeing all U.S. participation in international organizations is Gregory Newell, assistant secretary of state. Mr. Newell, why pull out of UNESCO now? These American complaints have been growing for years; why right now?

GREGORY NEWELL: We began 18 months, Judy, with a thorough review of our participation in all 90 some-odd multilateral organizations. We determined at that time that minimum requirements for the U.S. to continue strong support throughout the system would be, number one, a reassertion of American leadership in multilateral affairs.

WOODRUFF: Now, let me ask you to stop right there. What do you mean by that, a reassertion of American leadership?

Sec. NEWELL: A strong desire to move away from damage limitation, damage control, which we have been in the habit of performing for the last several years throughout the system. We desire to move forward with a constructive development, cooperative activities of the U.N. as it was designed to do 37, 38 years ago.

WOODRUFF: All right.And then what were some of the other --

Sec. NEWELL: The second priority is a desire to increase the private sector in each of these organizations. The third is a desire to see Americans increased in the hiring of these organizations. Our numbers have declined every year in the past 20, 25 years. Fourth, desire to improve the conferring mechanism amongst and between these organizations and member states. And the fifth was a desire to see the budgets at a zero net program sum, inasmuch as the last 10 years those assessed budgets in the U.N. had grown from $276 million to $756 million.

WOODRUFF: Well, we keep hearing that one of the chief complaints of the Reagan administration is that there's been an anti-Western, anti-U.S. slant on the part of UNESCO. What is an example of that? Can you be specific?

Sec. NEWELL: Yes.Through the review of these five priorities with all multilateral organizations, there were three problems specifically that surfaced in many of them. Number one, politicization. And that is specifically in UNESCO, discussions on disarmament and peace with initiatives from the Eastern bloc. Our concern that disarmament, being a legitimate discussion, should take place either in the Committee on Disarmament in Geneva or at the First Committee in the U.N.

WOODRUFF: Are you saying there's too much influence by the Soviet Union in UNESCO? Is that --

Sec. NEWELL: There is significant influence not only in disarmament but human rights, where we are not talking about individual human rights but rather collective rights, rights of the state.

WOODRUFF: But aren't you concerned that by pulling out, that that Soviet influence that you're already concerned about could increase even more?

Sec. NEWELL: This has been a serious question that we have looked at, and we have determined that by remaining in such a highly politicized organization that we give credibility to the resolutions and the programs which come forth from UNESCO.

WOODRUFF: All right, thank you. We'll continue this in just a moment. Robin?

MacNEIL: Now reaction from UNESCO itself. Doudou Diene of Senegal is director of the UNESCO liaison office at United Nations headquarters in New York. Mr. Diene, what is the general reaction among officials like yourself inside UNESCO to the U.S. pullout?

DOUDOU DIENE: I think that the general reaction is indeed a reaction of surprise.

MacNEIL: You're surprised?

Mr. DIENE: Yes.

MacNEIL: Even after all the warnings and discussion and everything?

Mr. DIENE: Yes, because we knew that the threat of the United States to withdraw from UNESCO dated back to January 1981, in fact, when the David Stockman, in his first budget proposals, did suggest withdrawal from UNESCO, to sever the U.S. contribution to UNESCO. But the surprise came from the fact that we know, as you know, that the advice of a committee established by the United States, which is a national commission of United States for UNESCO, to advise United States in its policies with UNESCO, and composed of educators, scientists, intellectuals of the United States -- those who really know UNESCO and are working with UNESCO since more than 20 years -- this commission has overwhelmingly recommended to the administration 10 days ago to remain in UNESCO.So we thought that the recommendation of the people who really know UNESCO and the private sectors, nongovernment organizations, will be taken in account.

MacNEIL: So are you saying then that this decision by the Reagan administration, disregarding the advice of that commission, is a political decision?

Mr. DIENE: I am not saying that. What I am just saying is that the technical advice, the judgment of those who really are associated with UNESCO since more than 20 years -- the American educators, scientists, intellectuals, writers, people working in the theaters, films, museums, paintings -- those really who have been associated with UNESCO, their point of view have not been taken in account.

MacNEIL: What do you say to the general charge as made today by the State Department that UNESCO has become hostile to the West and to institutions of a free society?

Mr. DIENE: It's a very interesting accusation. As you know, I was deputy representative of my country, Senegal in UNESCO, more than six years in the '70s. I have never heard such thing. Because I believe that the values which UNESCO is trying to implement through its program and which are in its constitution are shared too by the Western world. And these values are namely freedom, equality, dignity between people, liberty, such kind of values. I have never heard that such values are not Western values.

MacNEIL: What about the U.S. position that it is increasingly dominated by a Soviet or Soviet bloc and Third World viewpoint?

Mr. DIENE: It is a wrong accusation, I think, which is addressed to all the United Nations organizations, and indeed a very curious one. Because it means two things. One, it means that the Third World countries, more than 100 countries, the three quarters of humanity, they don't have a specific identity as a group; they are always associated with the Soviet Union, which is another group. And this means, I think, more deeply, a really serious lack of capacity to listen to Third World countries' point of views and interests. Now, is UNESCO dominated by this coalition? I just don't think so. I think that the simplest analysis of UNESCO's activities and decisions in the past years will show that there is no coalition in fact in UNESCO.

MacNEIL: Thank you. Judy?

WOODRUFF: For another view of the implications of the Reagan administration's decision to pull out of UNESCO, we talk with Donald McHenry, former U.S. ambassador to the United Nations from 1979 to '81. Ambassador McHenry is now professor of diplomacy and international affairs at Georgetown University here in Washington. Mr. Ambassador, is the United States' criticism of UNESCO justified?

Amb. DONALD McHENRY: Oh, some of it is, much of it is not. It is true that UNESCO has undertaken a number of programs in recent years with which the United States disagrees and that the United States has been in the minority. It is true that some of these programs are looked upon by the United States as political in nature, but if you examine them closely I think you get to the point which Mr. Newell made, and that is that the administration has sought to, in his words, reassert American leadership. Reduced to its essentials, the United States wants UNESCO to operate according to what America believes, according to our values, whether it is our economic values or press or otherwise. If you take some of the suggestions that politics has been entered into, it depends on how you look at it. UNESCO is supposed to look at, as your film clip indicated, some world heritage things. If you take an issue or one of those designated things or the effort to designate one which is in the Middle East, there is no way you can discuss it without having political overtones. If you take the question of educational assistance in southern Africa, there's no way you can discuss it without having political overtones.

WOODRUFF: So are you saying the decision was wrong in your eyes?

Amb. McHENRY: I think the decision is shortsighted. I think the United States -- that these organizations serve our overall interests, but there will be times when we are at a disadvantage in them. There were times when the Soviets were at a distinct disadvantage in the early '50s and '60s. There will be other times when we have an advantage in them. The long-term interests of mankind and of the United States, it seems to me, is in staying in there and trying to light a candle rather than curse the darkness.

WOODRUFF: Well, what effect do you think this pullout will have on UNESCO?

Amb. McHENRY: It'll live. It will have to cut back its budget. That probably is very good for it, probably would be very good for the United States to have a shakeup in its budget. It's ironic to hear the administration criticizing UNESCO on the budget while we run a $200 billion deficit, while the Defense Department budget runs out of -- totally out of kilter. It's ironic to hear them talking about UNESCO in its efforts to control the press when in fact the same accusations which UNESCO is trying to get hold of -- inappropriately, I think; I mean, their method is ham-handed -- those accusations are made by the American administration of Mr. Reagan against the American press.

WOODRUFF: Well, are you -- so you're not saying you favor the proposals that UNESCO has come up with regarding the press?

Amb. McHENRY: No. I am saying that they have identified a problem. There is a problem in the developing countries, where they believe that their -- what is going on in those countries are not reflected in terms of the rest of the world media, that the press, the media focuses on their warts and doesn't cover the overall picture. You've heard it before; we hear it here in the United States. I am simply saying that there is an irony, that this is what, in the area of the press, UNESCO is trying to get hold of, and it is the same accusation which the administration makes against the American media here.

WOODRUFF: All right, and one other thing. What effect will this have, do you think, on the United Nations, if any?

Amb. McHENRY: Not good. It is not good. It's a chipping away of the system. It's a chippin away at the whole concept of multilateral diplomacy. There is this effort to reassert, as Mr. Newell put it, American leadership, but that really means that if you don't go our way, we're going to pick up our marbles and go home. We saw that in terms of the waving goodbye to the United Nations, we've seen it in a number of other instances. It is not good.

WOODRUFF: All right, thank you, Mr. Ambassador. Robin?

MacNEIL: Secretary Newell, Ambassador McHenry says it is a very shortsighted decision.

Sec. NEWELL: Well, Robin, we think not. Our concern is genuine and effective cooperation in the development of education, science, both natural and social, cultural effects and communication. We believe that we can support the development of those in a more credible way, in a more effective way in other existing mechanisms than those that we currently find in UNESCO.

MacNEIL: What's your comment on that, Mr. Diene, that the U.S. could actually be more effective doing it bilaterally with certain countries?

Mr. DIENE: It's a very interesting explanation, because it means that what Mr. Newell says, it means that United States prefer the bilateral relation to multilateral relations through the United Nations system. And I just would like to come back very briefly to the concept of reasserting American leadership in UNESCO, and just ask Mr. Newell the following question.If tomorrow the other superpower come and said that it considered that its interests, views, values are not considered correctly or implemented by UNESCO or the United Nations, they will withdraw; or if they ask UNESCO to come back to their values of this power before coming back to UNESCO, what will be your reaction to that? I do believe that this concept is fundamental --

MacNEIL: Well, let's ask the secretary. What is your reaction? What's your answer to that question?

Sec. NEWELL: Mr. Diene, I would answer that any question that would be posed in this nature by any country is legitimate, and if a country determines that its views and values are not being forwarded, its interests are not being protected, I would recommend that it would be wise and prudent for that member state to withdraw from membership in whatever multilateral organization or regional organization that it's involved with. Let me say, if I could, that the United States in reasserting leadership makes no apology for a desire to protect and to further our views and values, and to protect those interests which are important from our view to the survival of peace and security in the forwarding of those elements in mankind.

MacNEIL: Mr. McHenry, what's your comment on that philosophy?

Amb. McHENRY: Well, reasserting American -- or protecting American views and values is of course the objective, and a legitimate objective, of the United States. The question is how to do it. Do you do it by picking up your marbles and going home? Do you do it by asserting that if things don't go your way, if the institutions don't follow your policies and procedures, you're not going to participate? I think that there is, frankly, in the administration a dislike of multilateral institutions. But to show you how shortsighted it is, we are now -- we now see the President talking about getting the United Nations peacekeeping forces back into Lebanon. The multinational force went into Lebanon precisely because the United States at the time couldn't see far enough ahead that the criticism of the peacekeeping forces at that time was unfounded. Now we need those forces, and I would suggest to you that we're going to perhaps not need UNESCO as immediately as we need the peacekeeping forces, but we'll need it.

MacNEIL: Mr. Newell?

Sec. NEWELL: In terms of our multilateral participation, the President has made it abundantly clear in public addresses to, in the past 20 months, at the United Nations, wherein he stated that the United States recommits itself to our participation in multilateral affairs, indicating that even in these times of domestic financial retrenchment, that U.S. support has not nor would it decline for the U.N. system. Let me say at the same time, however, as I mentioned this review which brought forward these three problems of politicization, statist approach and mismanagement, that we had concerns with six multilateral organizations. Together with companion member states, not just the U.N. alone, and taking these concerns to the directors general and secretaries general, and we had seen significant and, we believe, permanent changes in the direction of these multilateral organizations.

MacNEIL: Well, is the U.S. hoping that this announcement today, which has a year to take effect, is going to lead to changes in UNESCO which might cause the U.S. to change its mind?

Sec. NEWELL: First of all, Robin, the decision that has been made has been made clearly on the basis that under any conceivable circumstances, remaining in UNESCO would not change from within, inasmuch as UNESCO has been on, if you will, probation the last six months. We believe that the last six months have demonstrated that the very best we can expect from UNESCO, we have seen.

MacNEIL: Is that so, Mr. Diene? Is there likely to be a sentiment inside UNESCO -- "We better change things to get the United States back" or won't it care?

Mr. DIENE: I think that this request is by itself contrary to the principle of universality, which is a fundamental principle of UNESCO's activities.

MacNEIL: It's different from the General Assembly, isn't it? You reach a consensus agreement rather than a majority agreement, isn't that so?

Mr. DIENE: It is a rule in UNESCO's habit, I may say, that decisions are taken by consensus, with argument of all member state. And this is why I am surprised that the question has been raised that United States may come back to UNESCO if UNESCO behave in a different way. Very simply because the UNESCO program for 1984-85 has been approved just one month ago.

MacNEIL: But are you saying that there will not be any sentiment within UNESCO to change programs or change policies to get the United States back?

Mr. DIENE: I think it is up to the member state to decide what they will do, but the point I wanted to make, and I think it's very important one, is that the UNESCO program for '84-'85 has been approved almost unanimously one month ago by all member state, including the United States -- in particular, the program in the field of communication. So after the United States has approved this program, I don't know what kind of changes they would like to make.

MacNEIL: What about that, Mr. Secretary? What's the response to that?

Sec. NEWELL: Robin, that fact is not true. In fact, a year ago when this budget was proposed to the executive board, as I recall, 26 of 51 member states either voted against or abstained on that budget. Then, at the general conference, the budget proposal was significantly decreased -- not to the zero net program growth; in the neighborhood of 3.8 to 5.5 percent. And the United States did not approve that; it voted alone against that budget proposal, and there were a number of countries that abstained on the budget.

Amb. McHENRY: But he wasn't talking about the --

MacNEIL: He was talking about programs.

Amb. McHENRY: He was talking about the overall program, which is done every two years, in which the United States participated in the drawing up, and where the United States national commission for UNESCO participated in the preparation of the U.S. proposals. He wasn't talking about the budget.

Sec. NEWELL: Well, the budget and the program at that general conference go hand in hand, number one. Let me say also, the commission, Mr. Diene referred to that vote overwhelmingly, 41 to 8.I would call to the attention here that there are 100 commissioners; half of the commissioners were not there to vote.It was taken at a late hour, and so that 41 to 8 is a bit misleading.

MacNEIL: I'm afraid, gentlemen, all of you, we'll have to watch this story progress in the coming weeks and to leave it there for tonight. Thank you all very much.Judy?

WOODRUFF: Two top officials of the Reagan administration are apparently under investigation under very different sets of circumstances. The number two man at the Pentagon, Deputy Defense Secretary Paul Thayer, has reportedly been under investigation by the Securities and Exchange Commission since last March for allegations he illegally passed stock market tips to friends while he was chairman of the LTV Corporation. LTV is a Dallas-based concern with interest in steel, aerospace and energy products. And SEC investigators have told reporters that Thayer's tips were used by his acquaintances to reap gains in securities trading. Thayer will say only that he is aware of the investigation. The SEC will not comment on it or on whether it plans to make changes against Thayer. According to one report, however, civil charges could be filed in federal court as soon as next week.

Meanwhile, a spokesman for the Senate Foreign Relations Committee says the committee is conducting an inquiry into secret tape recordings that the head of the U.S. Information Agency made of telephone calls. Charles Wick acknowledged earlier this week that he had secretly taped telephone conversations and in some cases had neglected to tell people they were being taped. Wick said the tapings have been discontinued.The Foreign Relations Committee staff is conducting the inquiry at the request of committee chairman, Senator Charles Percy.The White House said yesterday that it is also looking into the circumstances of the secret tapings. We'll be back in a moment.

[Video postcard -- Swinomish Slough, Washington] Unbalanced Balance of Trade

MacNEIL: While most of the economic news has been good this year, there's been one monthly statistic that has been bad and getting worse. The United States has been buying a lot more from overseas than it's been selling, and the result will be the worst balance of trade deficit in U.S. history. The latest figures for November are out today, and show a $7.4 billion trade deficit. That's slightly better than the previous month but still the second worst deficit on record. For the first 11 months of 1983 the trade deficit has reached $62.9 billion and is expected to pass $70 billion for the year. The direct reason for the growing deficit is a drop in U.S. exports. In November they fell by another 0.6%. Some economists estimate that this has cost Americans more than a million jobs in export industries. This has been a bad year for American exporters. The highly valued dollar makes their goods more expensive aboard; other countries have not recovered as quickly as the United States from the recession; in Latin America and elsewhere, countries are struggling with foreign debt and cutting back their purchases of American products. With us again is Commerce Secretary Malcolm Baldrige, whose department helps promote American goods abroad and shares responsibility for U.S. trade policy. Mr. Secretary, some economists predict that the trade deficit will get even bigger in 1984. Do you?

Sec. BALDRIGE: Yes, it'll be close to $70 billion this year, Robin. Next year it could get up to $90 billion. I think toward the end of next year it will begin to start down again, but we can look for higher deficits not lower ones in the next year.

MacNEIL: What will cause it to start coming down?

Sec. BALDRIGE: I think there's a general relization that after looking at the size of the deficit, trade deficit and the size of our federal budget deficit, that the strength of the dollar is going to come to a level and begin to perhaps start down again. People don't think the dollar's going to continue to get stronger. And as that perception grows, we'll see the dollar weaken, and sometime during the year next year --

MacNEIL: You're saying the dollar's value is high because of perceptions of the future budget deficits?

Sec. BALDRIGE: I think really it's high because of that, which holds interest rates up. And secondly because of the relative security and advantages the United States has --

MacNEIL: So the "safe haven" argument --

Sec. BALDRIGE: As a place to invest. So those two keep the dollar strong.

MacNEIL: Now, but -- in other words, are you expecting the federal budget deficit is going to begin to come down by that time or that it'll be seen to come down, and therefore the dollar will come down, therefore exports will thrive? Is that the --

Sec. BALDRIGE: Well, I think that what we'll see on the budget deficit is that nobody thinks that the high budget deficit is a proper thing. The question and the problem is how to get it down. I mean the President, I think, will run on a platform -- if he runs, and I -- as we think he will -- of getting the deficit down, more by lowering government expenditures than by raising taxes. And that's the argument right now. But if he gets elected, as I think he will, he'll have a mandate from the people to get those expenditures down, and I think that's what individuals around the world are looking at now when they assess the relative strength of the dollar.

MacNEIL: I see. Do you agree with those who say that for every billion dollars of deficit in the balance of trade, American jobs are lost? I've seen the figure 25 million -- sorry, 25,000 American jobs are lost. Do you agree with that?

Sec. BALDRIGE: Well, there are figures, so I guess I have to.

MacNEIL: Yeah, so that --

Sec. BALDRIGE: It used to be 30-35,000, but in today's world our latest estimate is 25,000 per billion. And that -- per billion dollars of exports lost or trade deficits.So that's a very significant amount of jobs.

MacNEIL: So that when the whole emphasis of the administration is on economic recovery and getting unemployment down, this could be a very large weight on the other side of the scales.

Sec. BALDRIGE: Well, it already is. I mean we're in it right now, and we're in it not just because of the strong dollar but also because this country is coming into and has been in a very strong recovery pattern. Our customers abroad are not, however. They're having more stagnant economies, and until they pick up, it gives us less of a home for our exports, but we're still taking their imports in. That's a very strong factor with us, as is, if I may add -- a lot of our trade is done with South America, and if you took the four largest trading partners we have down there, I think in 1981 we sold them $28 billion worth of stuff; right now it's running about $14 billion. There's $7 billion difference [sic] times 25,000 jobs, so that's a lot of jobs.

MacNEIL: Well, thank you; we'll come back. Judy?

WOODRUFF: Now we get a perspective of an exporter. With us in New York is Ralph Chew, who has his own export company and who also heads a trade association of exporters. Mr. Chew, just how difficult a time are the exporters having?

RALPH CHEW: I wish I was as optimistic as Secretary Baldrige. U.S. exports grew to be a very important part of our economy, and they've declined not six-tenths of a percent but almost 22% in the last 18 months. And this has been a disaster for exporters, and we are facing very tough times. I spent the day trying to talk American manufacturers into holding their prices for export to try to hold onto business which will be gone forever if they can't make the prices, because getting it back will take decades of work.

WOODRUFF: You say it's a disaster; what exactly do you mean?

Mr. CHEW: It think that the 20% decline in exports is very heavily in the area of manufactured product rather than commodities. The United States is becoming an exporter, a Third World country exporter of agricultural products and raw materials, and we're losing our markets for American manufactured products. Getting those markets back when the dollar does come down, as I hope you're right it will, Mr. Baldrige, eventually, is going to be a very difficult thing for American exporters.

WOODRUFF: Why has this come about?What brought all this about?

Mr. CHEW: The high dollar has killed our export sales. I think it's accepted that our federal deficit is the main culprit in bringing the dollar up. The dollar has doubled against many currencies, except for the yen and the mark, and we simply can't sell our products if the dollar is doubled. And I think that the perception that we are not going to deal with our deficit is keeping interest rates up and it's keeping the dollar so high. If somehow we could make people understand that we're going to move, we're going to get -- work that deficit down, I think the dollar would level off and our exports would pick up.

WOODRUFF: Well, do you think the Reagan administration is doing enough on the deficit? I mean, you sound skeptical.

Mr. CHEW: The federal deficit is a very, very complicated product -- problem. I don't think that it will be dealt with before the election, and in the export business that's a long time. So I think our industry is really crying for help, that this is a crisis time for exports, and I think the export of manufactured goods are going to continue down unless something is done to get the dollar back into a proper relationship.

WOODRUFF: Let me ask you this. Why -- clearly exports are important to you and to other exporters. Why are exports so important to the American economy?

Mr. CHEW: The figures really say it. United States exports grew from $10 billion to $243 billion in 20 years. In 1981, which was the peak, we exported $243 billion, and that was almost 11% of our gross national product. International trade is approaching 25% of our economy. That's a very important figure, and I don't think that American people realize this. I think that in Japan when they legislate domestic programs, they take the international consequences into account. Japan exports 17% of their gross national product. We exported almost 12% before this decline. I think that if Mac Baldrige got his department of trade, then he could have a voice in policy so that the international implications would be not overlooked as they are too often.

WOODRUFF: Well, now, what exactly -- let me ask you to carry that a little bit further -- what exactly are you saying the administration should do?

Mr. CHEW: The immediate problem is the very strangely high value of the dollar. I think there is a perception that if we don't do something about it that it may become a crisis and may crash. But for the next two or three years, unless the United States somehow can get the dollar down in relation to other currencies, U.S. exports of manufactured goods are going to decline to a place where it's going to be very hard for us to get our position back in these foreign markets where we do business.

WOODRUFF: All right, thank you. Robin?

MacNEIL: Mr. Baldrige, what is the administration doing?

Sec. BALDRIGE: Well, let's take the deficit first. It's not a question of whether we or the Democrats or anybody that I know of in the United States wants a high budget deficit. How do you get it down? What method do you use? We think in the long run it's much better to get it down by cutting government expenditures. And if we could get a program like that through right now, we'd do it. We may have to wait until the President runs and gets a mandate to do it: so be it. But that has to come first. Second --

MacNEIL: Of course, some people -- excuse me. Some people, like Senator Dole, the chairman of the Finance Committee, say it's so urgent to do something about it before the election that if the President would meet Speaker O'Neill halfway on a package such as Dole has proposed, half of budget cuts and half of revenue raising, taxes, then they could get some movement immediately, which would send the signal that Mr. Chew would like to see sent.

Sec. BALDRIGE: Robin, may I point out, we sent that signal in 1982. 1982 we thought we had an arrangement with the Senate and the House where for every dollar of tax increases, we'd get $3 of government expenditure decreases. We didn't get $3, we didn't get $2, we didn't get $1; we got about 25 or 40 cents. The taxes went up, as the President's part of the bargain, but the government expenditures did not come down. And the fact of life is that in an election year it's very difficult for the Congress to move off the dime and cut the kind of expenditures that are going to have to be done if we're going to get the deficit down.

MacNEIL: Mr. Chew, you're talking about an emergency for your sector of the American economy. Given the difficulties of getting the deficit down right now, or sending the signal quickly, what else do you think the administration could be doing to help your industry?

Mr. CHEW: Well, the crisis of the high dollar is so important to us that it's hard to look beyond that.

MacNEIL: But are you talking about immediate measures on the dollar? For instance, as some people have proposed, more intervention in foreign markets, some international negotiations to put the dollar's relationship with currencies in a narrower framework.

Mr. CHEW: The federal deficit is the culprit that's keeping the dollar up, and I think that intervention in these kind of programs are only going to be marginally effective. I think that the -- a more important long-range kind of thinking would be an appreciation of the fact the United States is in international commerce with such a big part of its economy, and that all programs should take into consideration the international implications.I would say on the short run that we're going to have another year or two of very difficult exports. Companies like mine or export companies, members of our association, only export. And as I indicated, we feel very much, we are very much in a crisis. We think that many American companies could do well to look to our industry to expand their exports, because we are proficient experts in this field. That's the short-run solution, only marginal, because if the products aren't competitive because the dollar is so high, it's hard to maintain your business.

MacNEIL: But you've just about said, Mr. Secretary, that it's pretty well impossible to do anything about the deficit until Mr. Reagan runs, is reelected with a mandate to do something about it. Is that, in effect, what you've been saying.

Sec. BALDRIGE: Well, unless there's some kind of a miracle in Congress. But, Robin, before I get off that point, let me say that it's not just the strong dollar that's giving us these trade problems. The developing countries in South America are all under IMF strictures now to gather their own tremendous external debt problems. They have literally, in case after case, cut their imports by half.Now, whether we had a weaker dollar or not, we'd still be facing that kind of a cut in their own import areas. We haven't seen the rest of the world come into the kind of recovery we're having yet, so that there is not that opportunity to send exports out. So it's not just the strength of the dollar. I would say that's the most important factor, but there are many other factors, too, that are causing this difficulty with exports.

MacNEIL: Mr. Chew?

Mr. CHEW: Actually the strength of the dollar makes paying back those debts even more difficult. It's sort of a vicious circle.These countries that all owe us money are having to pay it back in dollars, having to pay interest in dollars, and because the dollar's so high, it's compounding their problems.

MacNEIL: Do you agree with Mr. Chew, Mr. Baldrige, that as these markets go on being lost for American manufactured goods, they're liable to be lost forever?

Sec. BALDRIGE: Yes, I think he's got a good point there. I don't know about forever, but they'll be lost for a long time, because once somebody else supplants you, it's double tough to get back in.And there we run into the question of American ability to be competitive. Yes, you've got a strong dollar on your back and that makes it tougher. But we have seen for, oh, the last 20, 25 years American competitiveness begin to slip first and then actually slip in the last decade. And unless we get that back, and unless we're able to cut costs and still give quality, we're going to have some of those kinds of difficulties.

MacNEIL: Mr. Chew, finally, how do you, in your industry, enter 1984 with the realities you've outlined this evening? What mood do you have?

Mr. CHEW: It's going to be a tough year. Of course, the opportunities for trading companies like members of our association is good on the way up and good on the way down, because we're needed more when things are tough to countertrade and barter and dealing with the difficult restrictions that Secretary Baldrige mentioned. I think that we shouldn't leave this subject of what the government can do without mentioning Japan, which is a very important growing market, and where, yes, our government can be very helpful in opening up that market. I think that that's very important area. In think this administration's pushed very well; I think they should continue to push, and I think it'll bear fruit.

MacNEIL: We have to leave it there. Mr. Chew, Mr. Secretary, think you. Judy?

WOODRUFF: And taking one final look at today's news, the United States has formally said it will pull out of UNESCO, the United Nations Educational, Scientific and Cultural Organization, next year. The State Department says UNESCO has become anti-American.

And Jesse Jackson is on his way to Syria. The Democratic presidential candidate says he's going to try to negotiate the release of a U.S. pilot captured when his plane was shot down by Syrian guns in Lebanon.

Argentina's new president has cracked down on the military government he replaced. And the leading economic indicators dropped this month, the first downswing in 14 months.

Today's serious news was tempered by an event in the little principality of Monaco. Princess Caroline became Mrs. Stefano Casiraghi. The newlyweds appeared for only a few minutes, standing at a palace window. Only a few dozen friends and relatives attended the ceremony, which was civil because the Roman Catholic Church has not acted on Caroline's request for an annulment of her first marriage. Her second husband is an Italian businessman 23 years old. She is 26. Robin? Matisse's "Jazz"

MacNEIL: As the year's been drawing to a close, we've been talking about some of the books published in 1983. Tonight we'd like to show you a book, described by The New York Times art critic John Russel as the most beautiful art book of the season. The book is a new edition of Jazz, a series of 20 cut-paper images by the French artist Henri Matisse. It was first issued in Paris in 1947 by the publisher Teriade. Only 250 copies were printed, and each is now worth about $40,000. The appearance of a new edition is considered a major event in the art publishing world.

[voice-over] Henri Matisse, one of the most influential artists of the 20th century, was a painter, a sculptor, a draftsman, a printmaker and an illustrator of books. With his contemporary, Picasso, Matisse revolutionized the look of art which had prevailed since Renaissance times. In a Matisse work there is no deep perspective or sense of three dimensions. There are no subtle shadings. Instead there's a proliferation of line and color, color used in such a bold way as to dazzle the eye. A true original, Matisse extended the fascination with color and shapes that he brought to painting to the technique of paper cutting. He elevated it to an are form, and called it drawing with scissors.

Matisse was 74 when he started work on Jazz. "Carving into color," he wrote at that time, "reminds me of a sculptor cutting directly into stone. This book was conceived in the same spirit." How to transfer the glowing colors of Matisse's cutout forms to the printed page was the problem for George Braziller when he conceived this new edition of Jazz. The answer was painstaking offset lithography. Since the founding of his publishing house, Mr. Braziller has wanted to do this book.

GEORGE BRAZILLER, publisher: This book really, it's once in a lifetime that you come onto a project like this. The care that had to be given to this book, I doubted very much that a large printing firm would have taken the time that this printer did in Munich, Germany.

MacNEIL [voice-over]: The firm he chose was that of Ernst Wartelsteiner, a printer willing to take infinite pains to match the original. Thirty-nine new inks were specially mixed to re-create Matisse's colors. Had Jazz been printed on a high-speed commercial press, it could have been done in two weeks. This facsimile took nearly three and a half months.

Mr. BRAZILLER: My admiration for Matisse is enormous. He's one of the true geniuses of color of the 20th century. These gorgeous colors of the elephant entwined here. The blacks and the yellows that only Matisse could use and use so effectively. And then here, the wolf. This was when the Nazis were in Germany. His wife was imprisoned by the Gestapo. His daughter was being shipped abroad. And this is an allegory for the Gestapos, the occupation of the Germans in Paris. And here are the cowboys -- he loved cowboys. These greens, these blues -- we had to go through the press two and three and four times to try to reach an intensity of color. And here his text. He was definitely influenced by medieval manuscript painting. But what he conceived here, he wanted to maintain the same rhythm, the same movement that he usess in his images like this.Two of the most beautiful pages in the book. It is called "The Horse, the Clown, and the Circus Rider." And then this last thing at the end, he just put in by hand as a clue to each of the images throughout the book, a lovely little touch to end the book. Matisse.

MacNEIL: One of the books of 1983. Braziller printed 7,500 copies of the new edition, and even at $90 each, people gobbled them up, and a second printing is now under way. Good night, Judy.

WOODRUFF: Good night, Robin; I'll take a dozen. That's our NewsHour for tonight. I'm Judy Woodruff. Thank you and good night.