Clinton Brings an Edge To G-7 Summit Talks

GROUP OF SEVEN

IT'S true that George Bush had much more experience as a world leader. But White House officials feel President Clinton is traveling to this week's Tokyo meeting of the seven largest industrial nations with something his predecessor never had: a serious start on United States deficit reduction.

That's a move that many other nations have been urging US presidents to take for years.

US officials hope it will give them credibility as they push their fellow members of the Group of Seven on issues ranging from economic stimulus to Russian aid.

Of course, that deficit-reduction package has not actually become law. Its final form is far from clear, and Mr. Clinton's domestic political fortunes are not exactly soaring.

The White House hopes that these flaws will appear minor to Clinton's G-7 fellows, many of whom are in far worse domestic political positions.

"I think that gives him a position of strength with which to enter discussions with his colleagues," said a White House official who briefed reporters last week on condition he remain anonymous.

The trouble is that so far other leaders have resisted a number of US initiatives.

The US had hoped for a $4 billion commitment in additional Western support for Russia to help privatize state-owned industry, for example, but has had to settle for a $1.5 billion fund.

One thing G-7 leaders have agreed to do is try to focus their discussions. Since these economic summits began in 1975 in response to spiraling oil prices, they have at times expanded to become nothing but vague speeches and photo opportunities.

"Success can be inversely proportional to the length and number of paragraphs in the communique. I think this year there will be fewer paragraphs and more focus on results," claimed the White House official.

The US says it will have three main subjects on its G-7 agenda in Tokyo this year:

* Economic revitalization. The traditional reason for the existence of these meetings is coordination of broad macroeconomic policies. This year, that may mean the US hectoring Japan and Germany about trying some additional stimulus measures of their own.

The US wants Germany to cut its interest rates again and Japan to open its markets to foreign goods while increasing government spending.

US officials had also proposed getting G-7 nations to sign a pledge to try to get their economies to grow a real 3 percent a year.

Other nations scoffed at this as meaningless, equivalent to pledging an annual level of rainfall.

The US might reach the 3 percent level this year, while Germany and the rest of Europe remain mired in recession, and Japan struggles to perhaps 1 percent growth.

"It's very hard for the United States alone to grow jobs without help from other nations," Clinton said last week.

* Trade talks. The US has been pushing to reenergize global free-trade talks. White House officials had hoped to get G-7 nations to band together and announce deep cuts in tariffs on a range of goods and services as a way of jump-starting the talks, which are known formally as the Uruguay Round of the General Agreement on Tariffs and Trade.

So far this approach has been stuck on a number of shoals. Last week, France's new prime minister, Eduard Balladur, objected strenuously to the market-access plan. For another, the US is resisting European pressure to lower textile tariffs, while the Europeans don't want to bend to US demands to cut tariffs on electronic goods.

Without some kind of progress in Tokyo, there is a risk that the Uruguay Round approach to world trade will completely collapse.

* Russia aid. US officials intend to move forward with their idea of a fund to help privatize Russian industry even though pressure from Japan and Europe has forced the US to lower its expectations.

Of the $1.5 billion aid package now planned, about $500 million will come from G-7 nations. The rest of the money would come from the International Monetary Fund and other global institutions.

Instead of the multiyear term proposed for the larger package, US officials now foresee this aid coming through over about an 18-month period.

Overall Western aid for Russia stands at about $28 billion in pledges. For the second year in a row, Russian President Boris Yeltsin will join G-7 leaders on the summit's last day to report on his nation's economic progress, or lack thereof.

As always, when world leaders get together there will be political items on the agenda that bear no relation to the stated reason for the summit.

One major subject his year will be the ongoing tragedy in Bosnia, which is expected to be discussed at a G-7 dinner Wednesday night.