Monday, Jul. 18, 1994

We Interrupt This Summit for . . .

By GEORGE J. CHURCH

What, asked a reporter, was the most important thing about Bill Clinton's visit to Latvia? A foreign policy aide had to ruminate silently for a moment before answering. "Well," the aide finally replied, "he's the first American President to come to the Baltics. That's a big deal!"

Not quite so big a deal as Clinton had hoped. Symbolism was the object of much of his European jaunt, which after Latvia continued through Poland and Italy for the weekend summit meeting of the Group of Seven major industrial powers in Naples, and is to conclude this week with two days in Germany. But though the President once again showed a talent for thoughtful speeches to foreign parliaments and Reaganesque photo ops, he could never quite get Americans' minds -- or his own mind -- off his manifold problems elsewhere. In U.S. headlines and on TV newscasts, his efforts were upstaged by the collapse of his latest Haitian refugee policy. Then on Saturday he was forced to grapple at a press conference with the implications of the death of North Korean President Kim Il Sung.

By that time, however, Clinton may have been grateful for the distractions. In a major embarrassment at the summit, the Administration was forced to withdraw a last-minute initiative aimed at attacking trade barriers not covered under the recently completed GATT global trade accord. Sprung on the G-7 leaders just 10 days before the summit opened, the initiative was cautiously accepted by some countries but was flatly and publicly rejected by the French. Stung by having to withdraw the initiative so abruptly, Clinton privately blamed his trade team for sloppy preparation.

There were other rocky moments for Clinton and his economic advisers. The U.S. had excluded in advance any coordinated attempt to deal with the economic problem of the moment: the decline of the dollar against the Japanese yen and the German mark. Clinton insisted that the dollar would eventually steady by itself. Maybe, but after his remarks it promptly fell again, and hard. A senior Administration official quickly hedged on the President's earlier remarks, saying the U.S. "would never rule out" supporting the dollar if necessary.

Which is not to say the trip was bare of accomplishment. Clinton's presence in Riga and Warsaw earlier in the week was designed to show East Europeans that the U.S. has not forgotten about them while cultivating a Russia that they still deeply distrust. At the Naples summit, Clinton and his G-7 colleagues agreed on the outlines of a new multibillion-dollar aid package for Ukraine. The seven countries would help pay for decommissioning the four nuclear reactors at the infamous Chernobyl site and completing three new nuclear power plants that would generate much more electricity. Additional billions would be extended on the condition that Kiev undertake some major economic reforms. In the view of U.S. officials, Ukraine, a nation of 52 million, could become either a new sick man of Europe or a major power and barrier to a possibly newly expansionist Russia. But having promised to give up its nuclear weapons, Ukraine needs other means of ensuring its independence from Moscow. Increasing its nuclear generating capacity, and thus making it less dependent on fuels bought from Russia, could help.

Otherwise, the economic summit mostly gave Clinton a chance to preen as head of the nation that is "leading the world out of global recession," as he put it. Though the economies of all G-7 nations are growing simultaneously for the first time in years, the U.S. has recorded the best combination of steady production growth, rising employment and low inflation. The President also seized the chance to get better acquainted with some of his peers. Among them, Prime Ministers Silvio Berlusconi of Italy, Jean Chretien of Canada and Tomiichi Murayama of Japan were coming for the first time. In a meeting with Clinton before the summit, Murayama (who was hospitalized briefly for fatigue and diarrhea) promised to maintain policies of stimulating consumption, as the U.S. and other trade partners have been urging, to spur Japanese imports. U.S. trade officials, however, remain frustrated. "In two weeks," said one senior American figure, "there are going to be intense internal readings on Japan."

Russian President Boris Yeltsin was scheduled to meet with the summiteers on Sunday, but the G-7 leaders do not yet want to convert the group into the G-8; Russia has a long way to go before it turns its former command economy into enough of a market economy to join the club. The seven would not put up any more of their own money for aid to Moscow, either. But they were amenable to an arrangement that would permit Russia to borrow some additional billions from the International Monetary Fund.

So the successful parts of Clinton's tour were largely a matter of images. Which have their uses: it is not bad for the President to remind himself, and his domestic and international audiences, that there are important areas such as Eastern Europe where no crises threaten, and others such as economic performance where the nation is doing very well. If only it weren't for Haiti. And North Korea. And the congressional snarl over health care. And . . . And . . . And . . .

With reporting by Jay Branegan/Naples and James Carney and Suneel Ratan/with Clinton