Familiar List of Needs Faces Economic Summit
LIKE a phonograph record with the needle stuck in the same groove, the annual summit of the world's leading economic powers presents the same agenda of unresolved issues as did last year's meeting, and meetings past.
German Chancellor Helmut Kohl presides over the 1992 summit, which commences in Munich today. The German host - plus leaders from the United States, Britain, Canada, France, Italy, Japan, and the European Community (EC) - will reexamine the elusive global trade accord, ways to generate fading world economic growth, developing country debt reduction, and aid to former Soviet republics.
The world's richest countries are absorbed with their own domestic economic concerns and straining to honor even outstanding commitments.
Pouring more than $100 billion a year into reunification, now cash-strapped Germany has informed its global finance partners that it cannot take on further international commitments.
Nonetheless, Mr. Kohl will try for at least one summit success: a coordinated effort to diffuse a potentially explosive environmental problem presented by faulty nuclear power stations in Eastern and Central Europe and the former Soviet Union (perilously close to Germany).
World Bank estimates put an $8 billion price tag on transforming the Soviet-built nuclear reactors into safe stations.
In the throes of a presidential election year, George Bush travels to the summit in the midst of a fight for his political life. The US economy is limping out of recession and still combating high debt, soaring budget deficits, and rising unemployment.
US Secretary of the Treasury Nicholas Brady says that, while a global trade accord is the "vital issue of the 1990s," it is the summit issue that is "furthest from resolution." The reason, he says, is European adherence to agricultural subsidies that hamper world farm trade.
Mr. Brady says the European Community's proposed common agricultural policy reforms (CAP), designed to break the impasse in international trade talks, fall short of what is needed. A senior EC official says he understands that this year's US election makes it difficult to resolve US-EC trade disputes. But opposition within the EC to political union and a single EC currency, as envisioned in the proposed Maastricht Treaty, may prevent further CAP compromise, he warns. Brady says the project most likely to
win approval is the nuclear power plant repair. While offering no specific US commitment, the US treasury secretary is "sure there will be a positive outcome."
Britain - which was last year's G-7 summit host and will be next year's president of the 12-nation EC - will have difficulty registering 1 percent gross domestic product growth this year. Steering clear of criticizing other governments for poor economic management, Prime Minister John Major seeks a G-7 commitment for a year-end 1993 deadline to implement global environmental policies, including the convention on climate change and biodiversity protection, approved at the Rio Earth Summit.
Japanese Prime Minister Kiichi Miyazawa faces some very prickly issues in Munich. As stock and real estate values plummet, Japan's economy continues to contract while its trade surplus expand. Mr. Miyazawa is mindful of G-7 pressures on Tokyo to boost its economy through increased demand for imports. In Munich, Miyazawa will unveil his economic stimulus package, which includes pumping some $50 billion into the Japanese economy over the next year to reach 3.5 percent growth by April 1993, and a five-yea r plan to stimulate growth through domestic demand rather than aggressive exports.
Miyazawa is less prepared to help resolve the seemingly endless Uruguay Round of the General Agreement on Tariffs and Trade (GATT) talks begun in 1986.
The Japanese government has been most guarded about its rice growers, insisting on doling out heavy subsidies and preventing foreign imports from penetrating the domestic market.
One G-7 watcher asserts that Japan has done nothing to spur the trade talks, and is relieved that US-European frictions over farm subsidies have stalled the negotiations.
The summiteers will use Munich to inform Russian President Boris Yeltsin, with whom they will meet on Wednesday, about the conditions attached to their planned $24 billion aid package announced last April.
The EC official says that, although the Russians now understand that their reforms and G-7 aid combine into a step-by-step process, the G-7's challenge is to distribute the assistance - food and trade credits, budget support, technical aid and a currency-stabilization fund "without losing our money."
G-7 members are growing impatient with Japan's retreat from the group's high-profile, coordinated aid efforts for the former Soviet Union. While holding the distinction as the No. 1 aid donor in the world, Japan has done virtually nothing for Russia and other republics due to a dispute over the Kurile Islands, captured by Soviet troops in World War II.
Almost none of the slated $2.65 billion Japanese aid to Russia - mostly credits to purchase Japanese goods and services - has been realized.
Hiroshi Hirabayashi, Japan's deputy ambassador to Washington, explains that if the Russians were more organized in processing his country's export credits, the assistance program would be well under way.
The ambassador says that although Tokyo has "a very strong desire" to speed large-scale aid, "we have yet to see the beginning of the solution to our territorial differences."
Last week Yeltsin turned the tables and issued a stinging reply to Tokyo, asserting that Japan must aid Russia if it wants to resolve that dispute.
The senior EC official says that experience has proved that despite crafted communiques on world economic growth, global trade and the need to reduce developing-country debt burdens, G-7 verbiage does not translate into implementation.
One issue that will certainly receive attention - both in words and deeds - is the civil war in the former Yugoslavia. The official expects the G-7 to draft an agreement to assess refugee needs and to extend humanitarian aid to the embattled area.