Make the Most of It

Next week’s Toronto summit meeting of the seven leading industrial nations has a lack of focus that increases the prospect of much ado about nothing. It would not be the first time in the 13-year history of these gatherings that opportunity was missed. But it need not be so.

From the beginning these meetings have been intended as devices to lubricate the world economy. In that tradition an evident priority for this meeting is the appalling Third World debt, totalling $1.2 trillion at the end of 1987 and still growing. That debt continues to serve not only as a depressant on the economies of Latin America and Africa but also as a brake on demand and growth in developed nations. President Francois Mitterrand will be urging the other leaders to follow France in forgiving one-third of the debts outright. The United States continues to ask for country-by-country negotiations, none of which have yet resolved any of the critical debt problems. There seems to be no question that the situation would be helped if the seven could go beyond the generalities of last year’s summit meeting in Venice and find consensus on remedies.

President Reagan has already raised another critical issue for the agenda--the phasing out of farm subsidies that distort the world markets in food and fiber. Come what may, the President should stick to that issue, insist that it be at the center of the discussion and not permit other matters to obscure its importance. There is great anxiety in some quarters in each of the nations going to the summit meeting regarding an end to artificial price supports. The European Community, particularly West Germany and France, speak as if an end to subsidies would mean an end to rural life. They are wrong. It is not help to farmers that is to be phased out, but help that distorts prices and supply. If governments want to devise income-support programs for segments of their populations, whether they be farmers or inner-city poor, that is for them to decide. What damages international trade and the whole world system of agriculture is the kind of program now being used--notably the $44 billion in subsidies and farm assistance in the United States and Western Europe that distort the prices of farm products and create artificial incentives for overproduction in what should be a competitive world market.

Intertwined with the issues of debt and farm subsidies is the broader question of the new efforts within the General Agreement on Tariffs and Trade to make world commerce freer. The debt serves to encourage protectionism in the stagnated economies of the developing nations while the farm crop and export subsidies distort a crucial element of international trade, punishing poor nations that are seeking expansion of their own farm exports while also frustrating efforts to broaden GATT.

Given the long agendas that are being brought by each of the seven, and the shortness of time in a two-day meeting, it will not be easy to make substantial progress on these critical issues. But the summit might at least serve to eliminate some of the obstacles to further progress on the debt issue, in the GATT talks under way in Geneva and at the December meeting on farm subsidies. Reagan’s role will at best be ambiguous, coming as a lame duck with national elections in his country only five months away. But there is no reason why he cannot make the most of the opportunity to press ahead toward resolution of the vital issues of debt, trade and farm subsidies.