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GV EXT Foreign Affairs Ministry Paris
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GV M. Ortoli arriving and entering building
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GV Sheikh Al Jaber arriving and entering
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GV INT Minister in conference (4 shots)
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Initials ET/1820



Script is copyright Reuters Limited. All rights reserved

Background: The nine members of the European Common Market and 20 Arab League countries took their first concrete steps towards long-term economic co-operation in Paris in Wednesday (July 31).

Representatives of the two sides - M. Jean Sauvagnargues, the French Foreign Minister; M. Francois Xavier Ortoli, President of the Common Market Commission; Sheikh Sabah Al Jaber, Kuwait Foreign Minister; and Mr. Mahmoud Riad, Secretary-General of the Arab League - agreed on the creation of a joint permanent commission to plan co-operation.

The new Euro-Arab Commission is due to have its first meeting in Paris in November.

Wednesday's agreement, although only setting up a basic framework, was hailed by both sides as an extremely important development in both the economic and political relations between Europe and the Arab World.

The main areas of co-operation are likely to be industrial projects agriculture, investment and technical aid.

The European Community, which depends heavily on Arab oil, clearly hopes that the long-term economic agreements, and future technical assistance linking them to the Arab World, will prevent a halt in energy supplies, such as occurred ???ring last year's Middle East war.

M. Sauvagnargues, who appeared at a joint press conference with the arab delegation, said the joint commission was not being created to discuss oil supplies, but that both sides were aware of the effect of higher oil prices on the economies of industriliased countries.

SYNOPSIS: An historic meeting between the European Economic Community and the Arab World in Paris on Wednesday. It led to an agreement to set up a joint permanent commission for co-operation. M. Ortoli, President of the Common Market Commission was one European representative. The other was French Foreign Minister Jean Sauvagnargues.

The twenty Arab Leagues nations were represented at the talks by the Kuwait Foreign Minister, Sheikh Sabah Al Jaber, the present head of the League's Council of Ministers. The agreement heralds closer political, as well as economic links between the EEC and the Arab nations.

The Secretary General of the Arab League, Mr. Mahmoud Riad believes a combination of European technology and Arab capital could make a good basis for economic co-operation and development.

The European community, heavily dependent on Arab oil, hopes long term economic agreements with the Arabs will prevent future cuts in oil supplies, as happened during last year's Middle east War.

But French Foreign minster Sauvagnargues, who led the delegation, emphasised oil supplies and prices would not be discussed by the new commission.

He admitted however that the subject was bound to influence the Commission's discussions. so far only the barest framework of co-operation has been worked out.

The exact composition of the Euro-Arab Commission has yet to be worked out. Its first meeting will be in Paris in November. The most likely areas of co-operation will probably be in industrial projects, agriculture, investment and technical aid.

United States attitudes to the new alignment are unclear. But Washington has expressed reservations in recent months about such a Common Market initiative.