No Specific Action on Dollar : 7 Leaders Avoid Economic Clash

The economic summit leaders, after devoting most of their attention here to terrorism and other political issues, closed their three-day meeting Tuesday by calling for closer coordination to help smooth out wild swings in currency markets, but they declined to support any immediate effort to halt the slide of the dollar.

The final economic declaration of the 12th summit meeting of the seven major industrial democracies avoided any open clash on economic issues that have been touchy in the past.

In a key trade-off, the United States, in return for acceptance of its initiative for a strengthened system of global economic cooperation that will include Canada and Italy, dropped its effort to win commitments from West Germany and Japan for more stimulative domestic policies and did not press France for a firm date to begin a new round of trade talks.

One of Least Contentious

A steady improvement in economic prospects, spurred by lower oil prices and declining worldwide interest rates, also helped foster one of the least contentious summit meetings in recent years.

“It was a smooth summit,” Treasury Secretary James A. Baker III said, “because . . . we came into this summit in a very good economic environment.”

Several key economic issues, however, continue to divide the governments represented here.

The Japanese went away disappointed that they did not win support for halting the rapid rise in the yen--the dollar fell to 165.2 yen, a postwar low, in Tokyo trading Tuesday, but was stronger in New York, where it closed at 165.8--while the European countries and the United States continued to press the Japanese to open their markets more widely. Protectionist fever is rising again in Congress because the huge U.S. trade deficit, a record $148.5 billion last year, shows few signs of shrinking.

Caused by Subsidies

And a trade war between the United States and Europe over farm products remains a serious threat, although the economic declaration issued here acknowledged, for the first time, that the worldwide surplus of farm goods is caused by the summit countries’ own agriculture subsidies.

“There is a danger of an agricultural trade war,” Baker admitted. But he added that “there’s an appreciation of that on the part of the summit participants and a genuine desire to do what they can to avoid it.”

Yet even before the meeting ended, the outgoing president of the World Bank criticized the seven leaders for not living up to their pledges on free trade. The bank president, A. W. Clausen, speaking at a conference in Washington, cited growing trade restrictions on farm products and textiles in major industrial nations as a danger to debt-ridden Third World countries.

The seven leaders sidestepped a perennially thorny debate by declining to set a firm date for the start of multilateral trade talks. But they acknowledged the continuing process that in all likelihood will lead to new negotiations to reduce trade barriers.

September Meeting Backed

Their statement endorsed a September meeting of trade ministers representing 91 nations in the General Agreement on Tariffs and Trade (GATT). That meeting is aimed specifically at scheduling the trade talks, which would be the first worldwide trade negotiations since 1980.

And President Reagan, at a news conference today, said, “We’ve obtained a green light for a new round of trade negotiations beginning in September.”

The United States won support for a broad condemnation of farm subsidies, but France again objected to including agricultural trade barriers in the list of subjects to be discussed in the future trade talks.

Nonetheless, officials are convinced that agricultural trade barriers will end up on the GATT agenda, despite their omission from the statement issued here.

Some U.S. concerns remained deeply submerged, however. American officials wanted to win some kind of recognition at the summit level that West Germany and Japan should step up domestic growth to help shrink the U.S. trade deficit. But there was no mention of the subject in the final economic declaration.

A senior U.S. official acknowledged privately that the United States dropped the subject to ease acceptance of its monetary reform plan.

That plan, the key element of the economic agreement, would establish a seven-nation group of financial officials to supervise each nation’s economic goals and increase government intervention in currency markets.

More Stimulative Policies

But even as the leaders decided not to deal with the issue of German and Japanese growth rates, Federal Reserve Chairman Paul A. Volcker was calling for more stimulative policies among U.S. trading partners.

“The time has come for greater growth from abroad,” Volcker said in a speech Monday in New York. “Europe and Japan, too, have to get on a self-sustaining home growth pattern.”

In their final declaration, the leaders also agreed:

--To aid Third World debtors by supporting a plan put forth by Baker last October to increase lending to nations that adopt free market policies.

--To support greater funding for the World Bank.

--To provide greater assistance to African nations still suffering from drought and famine.

--To convene their 13th meeting next year in Italy.