Analysis : Reagan Impact Slight on Venice Conference : Europeans Find Him Remote, Distracted

President Reagan’s gaffe in saying that there could still be a fall in the dollar--a comment that sent tremors through the financial markets until it was clarified by a White House spokesman--was an inauspicious ending to a visit here that has been anything but auspicious for the President.

Reagan and his new White House staff came here 10 days ago with one major goal: to demonstrate at the economic summit conference that, despite the Iran- contra scandal and his diminished political standing at home, the President could still perform as a superstar on the international political stage.

But after brief stops in West Berlin and Bonn today, he will return to Washington tonight having demonstrated instead that his star is fading abroad as at home.

European officials said the 76-year-old President appeared to have aged considerably in recent years and was much more remote and distracted than he had been at previous summit meetings.

A high Belgian official with the European Communities said that Reagan seemed “vague and removed from some of the discussions.” His impression, the official said, was that the President is being constantly protected and handled by his staff.

A spokesman for the French government was asked whether Reagan had taken part in a discussion on the French government’s proposal that the industrialized nations contribute an amount equal to 0.7% of their gross national product to Third World development.

After scanning her notes, she said that the leaders of Japan, Italy, France and Canada had all debated the issue but that “I do not find any trace in the notes of an intervention by the President of the United States.”

Nor was there any trace that Reagan, a dominant figure at six previous economic summit meetings, had much positive impact on anything else that went on here during the three-day session of industrialized nations that ended Wednesday.

French Proposal Killed

And despite his failure to take part in the debate, the United States killed the French proposal on aid to the Third World. Treasury Secretary James A. Baker III cited the cost of Reagan’s controversial military policy in the Persian Gulf as a major reason that the United States could not afford to contribute to the aid program.

In Venice, Reagan found himself upstaged by a rising superstar who was not even present: Soviet leader Mikhail S. Gorbachev, who according to several sources was a dominant topic of conversation here. Gorbachev has received enormous attention in the West since assuming power two years ago, and recent polls indicate that Western Europeans believe he does more for peace than Reagan does.

Gorbachev Spotlighted

A White House official, interviewed on condition that he not be further identified, said Gorbachev “was the center of attention”--in bilateral sessions and in plenary sessions. “The summit leaders felt one of the most important things they could get out of their sessions was a shared view of Gorbachev,” the official said. The focus, he said, was on “where is the Soviet Union going--what do you make of a new Soviet leader who proposed arms reductions for the first time in history?”

Reagan, when asked at a news conference Thursday why he thought the polls showed Europeans giving Gorbachev higher marks on the peace issue, at first shrugged it off with a one-liner: “Maybe all of you could help change that--if you worked a little harder at it.”

But then he conceded that Gorbachev is “a personable gentleman” and is the first Soviet leader to advocate “actually eliminating weapons already built and in place.”

Chernobyl Criticism

Last year, when Reagan was riding high at the Tokyo summit conference, Europeans were highly critical of Gorbachev because of Soviet secrecy following the nuclear disaster at Chernobyl.

Reagan so thoroughly controlled the 1986 economic summit conference that he initiated every major statement by the allied leaders, including one condemning the Soviets for not living up to their international responsibility to publish details of a disaster that produced nuclear fallout over Europe.

At Venice, although he and his staff trumpeted the summit meeting as a success, Reagan could not claim credit for a single major declaration in either the economic field or the political.

The conference here, which made at best modest progress in helping to reduce trade imbalances between the United States and its industrial partners, is likely to be remembered mostly for postponing any strong economic policy measures.

Reagan rebuffed other leaders who expressed concern about the size of the U.S. budget deficit and failed to press the West Germans to adopt new measures to stimulate domestic growth. Instead, the leaders placed their hopes for preventing a global economic downturn on a stronger “early warning system” for coordinating future international economic policy.

Although the seven leaders approved a plan to monitor each major nation’s economic performance by using certain indicators, these indicators were not identified and the resulting economic information will not be made public.

The United States had pushed for disclosure of this information as a way of pressuring countries that did not fulfill their commitments, but the only way it could reach an agreement was to go along with allied pressure to keep the details secret.

No Farm Subsidy Gains

And while Reagan had urged that the seven nations end farm subsidies by the year 2000, he left Venice with little more than a joint statement expressing support for focusing the new Uruguay round of trade negotiations on the need to make steady progress toward a reduction of agricultural support payments.

Reagan failed to gain financial or military support for the U.S. military policy in the Persian Gulf and wound up endorsing an Italian-sponsored declaration that merely affirms the right of freedom of navigation in the gulf. French officials said they found the U.S. policy so confusing that they were not certain what they were being asked to support.

Further, Administration officials gave conflicting signals here on major issues involving the volatile situation in the gulf region, where Iran and Iraq have been at war for nearly seven years.

While Howard H. Baker Jr., Reagan’s new chief of staff, was declaring that any deployment of Iran’s Chinese-made Silkworm missiles at the mouth of the gulf would be a “hostile act” and risk military retaliation, Treasury Secretary James A. Baker III was warning that “we probably are unproductive when we speculate on the possibility or non-possibility of military action in the Persian Gulf.”

Howard Baker added to the confusion over U.S. policy by committing two major gaffes during a television blitz that sought to portray U.S. efforts here as successful.

Several times he spoke approvingly of the fact that Kuwait had asked both the United States and the Soviet Union to protect its oil tankers in the Persian Gulf.

“There’s more good than bad in that,” he said. “There is a joint effort by the United States and the Soviet Union to preserve the flow of oil through the Persian Gulf, and that’s historic.”

Finally Concedes

Apparently appalled by Baker’s comments, Secretary of State George P. Shultz and National Security Adviser Frank C. Carlucci assured reporters that the Administration considers a Soviet presence in the gulf to be detrimental to U.S. interests. Baker finally conceded that he had made a mistake, that the Soviets are an unwanted presence.

At another point, Howard Baker, contradicting Carlucci, said he accepted China’s denial that it had supplied Iran with the Silkworm anti-ship missiles. A White House spokesman said later that Baker had been mistaken, that the United States still believes that China supplied the missiles.

Throughout Reagan’s European visit, which began June 3, Administration officials have been on the defensive, not only on international economic and political issues but on questions raised by the congressional hearings into the Iran-contra affair.

Fawn Hall Switched Off

Television monitors carrying the Cable News Network’s live coverage of the hearings formed a backdrop for some of the Administration press briefings at the Excelsior Hotel here. Just before Shultz arrived in the press room for a briefing Tuesday, a State Department staffer, saying he was acting on White House orders, switched off television sets that were carrying the testimony of Fawn Hall, who served as Lt. Col. Oliver L. North’s secretary.

At Thursday’s press conference, Reagan was confronted with questions about testimony that North stood to receive $200,000 that had been set aside from funds raised for the contras. The President said he would not prejudge North but, apparently assuming that North will be indicted, said, “I’m going to wait until he’s had his day in court.”

Despite the Iran-contra scandal and other problems that have plagued the President here, he has one chance of salvaging something of substance from the Venice conference: a unified NATO position on the U.S.-Soviet proposal to virtually eliminate short- and intermediate-range missiles from Europe.

Unified NATO Position

Reagan said his meetings here and the meeting of Shultz and allied foreign ministers taking place in Reykjavik have increased the prospects for a unified position by the North Atlantic Treaty Organization on an arms control agreement and a meeting with Gorbachev.

The President has scheduled a Monday night televised report to the nation on the meetings at Venice and Reykjavik.