Reagan: Cancun's odd man out

"Cancun will be the stage of the Wagnerian burial of the North-South dialogue ," says a pessimistic participant of the summit meeting this week on the Mexican island.

Other diplamats are anticipating confrontational rhetoric rather than cooperation.

Twenty-two heads of government, including Ronald Reagan (eight from the industrial world, and 14 from developing nations), will discuss how the "haves" can improve the lot of the "have-nots."

On two key issues, the United States is expected to turn a deaf ear to demands for:

* "Global negotiations" on economic issues (trade, energy, finances, raw materials) involving 150 nations at the United Nations, where the rich countries are outvoted.

* The setting up of a World Bank affiliate to finance third-world energy development through a $30 billion lending pool.

The summit grew out of proposals from the Brandt Commission that the rich countries provide cheaper credit to the third world, stabilize oil and commodity prices, and grant develping nations tariff preferences for their exports.

Last fall, the UN General Assembly approved "global negotiations" but the project was blocked by the US with lukewarm support from West Germany and Britain. The US was opposed to negotiating technical economic issues inside a political body.

Mr. Reagan has opposed a multilateral approach to economic issues even more strongly than his predecessors.

At Cancun, he is expected to suggest instead that the developing nations follow America's example, adopt capitalism and Western-style democracy, work hard, get loans from the private sector, encourage free enterprise, and help themselves.

As tokens of US goodwill he is expected to propose abandoning textile quotas and to endorse free trade and the reduction of US interest rates. He may also announce the setting up of an insurance system to stimulate investments in poor countries.

But he is likely to say "no" to demands presented by the developing nations and support by France, Canada, Mexico, West Germany, and Japan.

Indeed, a senior diplomat said Mr. Reagan "is sure to be isolated."

Mr. Reagan is expected to try to put the best face on his rejection of the multilateral approach and to hold out instead for bilateral and regional agreements and for negotiations in specialized arenas such as the Internatinal Monetary Fund.

But his position is likely to be interpreted as negative and insensitive by the developing nations. (Some observers suggest private banks are not inclined to build railroads and highways in countries like Bangladesh and Somalia.)

The other industrial nations disagree with the Reagan approach inasmunch as it is based, they believe, less on ideological reasons than on a strategic concept.

"The US sees the North-South problems mainly in connection with the East-West rivalry," says a high Western official.

From now on, this offficial goes on, the US is likely to give economic aid only to its friends, just as the Soviet Union helps only it own friends. "This is a dangerous policy from our point of view."

Observers expect the developing nations to take stock of expected failure at Cancun and seek another special UN General Assembly on economic issues next year.