Heading Toward a Quiet Summit

By George J. Church.

Reagan is promised no confrontation in Ottawa

So far Ronald Reagan has met foreign heads of government one by one, either as host when they visited Washington or on brief trips to Mexico and Canada. Next week he will get his first taste of summitry as leaders of the seven mightiest non-Communist industrial powers meet in Canada for the latest in a series of annual conferences devoted to economic affairs. It promises to be a quiet and, at least on the surface, harmonious session, in keeping with its rustic setting. Le Chateau Montebello, 40 miles east of Ottawa, is the world's largest building made of logs. (One member of the U.S. advance team ungenerously called it "a dump.")

Canadian Prime Minister Pierre Trudeau, who will be host for the meeting, dropped in at the White House last week after a tour of European capitals to discuss the summit agenda with Reagan. The two politely agreed to disagree about some contentious questions, notably aid to the poor nations of the Third World (Reagan favors increased loans and investments by private business; Trudeau and other summit participants want more government-to-government help). Trudeau's main message: there will be no "confrontation" at the summit. Translation by one of his aides: "No gang-up on the Americans."

Still, there will be no lack of subjects fit for heated debate. The Europeans charge that a soaring American dollar is worsening inflation and unemployment in their countries. At the same time, the U.S. wants the other nations to be far more cautious in trading with the Soviet Union. But diplomats have pretty well decided to aim not for detailed agreements on specific questions but for general expressions of a desire to cooperate.

One reason for amiability is that elections and other political changes have broken up the old gang that argued so vociferously at previous economic summits. Trudeau, West German Chancellor Helmut Schmidt and Prime Minister Margaret Thatcher of Britain are the only veterans of these gatherings. President Franc,ois Mitterrand of France and Prime Ministers Zenko Suzuki of Japan and Giovanni Spadolini of Italy are as new to summitry as Reagan. Suzuki is something of an odd man out; unlike the others, he speaks not a word of English. Spadolini was confirmed as head of Italy's 41st postwar government only last week.

Thus the leaders will have to devote much time simply to getting acquainted. Mitterrand is particularly eager to arrange a private tete-`a-tete with Reagan, essentially to feel out whether a French Socialist can find some common ground with an American conservative. The leaders will have seven or eight hours to themselves during the two-day meeting, not counting formal sessions with their aides.

Further, the parties to the summit have had some awkward problems getting their own acts together. The Europeans are united in protesting that the rising value of the dollar against their own currencies is kiting their oil-import bills, which have to be paid in dollars. Furthermore, high U.S. interest rates, which are pulling in capital from around the world, have forced European nations to keep their own interest rates high, thus deepening a Western European recession (see ECONOMY & BUSINESS). But at their own pre-summit in Luxembourg two weeks ago, the Europeans could not agree on any common strategy to fight inflation and recession. They are divided between the tight-money policies followed by Thatcher and Schmidt and the stimulative spending approach that Mitterrand is bringing to France.

Reagan plans to explain that high American interest rates are a transient phenomenon; if his budget and tax cuts succeed in reducing inflation and unemployment, interest rates will fall too.

Europeans will urge the U.S. at least to resume intervention in the currency markets, selling dollars to keep their price in pounds, francs and marks from zooming still higher. But they have little hope of getting any commitment. They will be satisfied if they can impress on Reagan the necessity for the U.S. to consider the effects of its moves on foreign economies.

On the U.S. side, Reagan's advisers are split on how far to go in urging the other countries to restrict trade with the Soviet bloc. The State Department would recommend only more restrictions on exports of strategic goods; the Pentagon wants a tougher approach, contending, for example, that West Germany should halt its plans to build a pipeline to import Soviet natural gas. U.S. summit planners have little hope of resolving that division by next week, so Reagan probably will confine himself to generalities.

Assuming that the Polish Communist Party congress this week does not provoke Soviet intervention, the Ottawa conferees will talk at length about how far to go in shoring up the battered Polish economy, and how to coordinate their efforts. Reagan and his aides will also try hard to persuade the European leaders, who confront a rising tide of neutralist sentiment in their countries, that the U.S. does not intend to pursue a blindly rigid anti-Soviet foreign policy, but is receptive to eventual arms-control negotiations with the U.S.S.R. "The Europeans are worried that we are cutting off the lines of communication with Moscow," says a senior State Department official. "We must do a better job in articulating our attitude."

One specific decision will probably be an agreement to keep the economic summits going. Next week's meeting will be the seventh in a series that started in France in 1975; by now each country has played host to one summit, so the first cycle of meetings is complete. All participants have argued in the past that the meetings were valuable, at least in educating heads of government about the interdependence of the major industrial economies. The leaders probably will resolve to start a new cycle of summits next summer. By then Reagan will be an old summit hand. --By George J. Church. Reported by Laurence I. Barrett and Gregory H. Wierzynski/Washington, with European bureaus

With reporting by Laurence I. Barrett, Gregory H. Wierzynski, European Bureaus

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