Summit Shows Drop in American Clout : Lame-Duck Presidency, Allies’ Growing Economic Power Mark Shift Since 1981

For much of the last three days, American officials have sought to contrast the first economic summit that President Reagan attended in 1981 with his last one this week.

Reagan has shifted from free-market maverick to centrist, according to the White House view, as most of the six other industrial democracies that attend the summits have moved toward the right.

But another, more subtle contrast has been apparent at this year’s meeting: In the early 1980s the United States was able to dominate these summit conferences, but now its influence is on the wane.

In the past, no other country had the clout to push through a major economic initiative. And although the United States did not always get its way, it could easily block anything it did not like.

Lame-Duck President

But now, reflecting both the growing economic power of America’s trading partners and Reagan’s declining influence as a lame-duck President, the United States no longer rules the roost. Consider:

-- French President Francois Mitterrand persuaded this year’s summit to back a debt-relief proposal for impoverished African nations that the Reagan Administration had opposed as recently as two months ago. In earlier years, Washington would have been able to squelch the proposal simply with a promise of further study, but this year, pressure from the other industrial nations forced the United States to compromise.

-- Partly for fear of setting off another panic in the financial markets, the United States had to bury its running dispute with West Germany over that country’s continuing refusal to spur more economic growth. Instead, the two sides struck a deal: Washington would not bring up German recalcitrance if the Germans would not criticize the huge U.S. budget deficit.

-- For the first time in recent memory, Japan actually advanced a major proposal at the summit--a plan to ease the Latin American debt problem by having governments help to reschedule loans from commercial banks under the auspices of the International Monetary Fund. The costly plan, which drew opposition from West Germany and Britain as well as the United States, never got anywhere inside the summit, but the fact that the formerly passive Japanese offered it was significant.

-- The European Common Market, an invisible player in previous summits, was present in force this time, vocal in its criticism of American pressure for agricultural trade liberalization.

Common Market Trade Minister Willy de Clercq publicly scoffed at the U.S. effort. What the United States thought it had won at a prelude to the summit in Paris last month “has not been accepted,” De Clercq said.

To be sure, the United States won at least one important victory at this summit, on the agricultural subsidy issue. For despite initial opposition from Europe and Japan, the United States was able to persuade the summit leaders to call for accelerating worldwide agricultural trade liberalization talks.

Indeed, the United States has been encouraging the allies to take a more active role in policy-making as part of the new machinery put in place by Treasury Secretary James A. Baker III to coordinate national economic policies.

By contrast, Reagan went to the 1981 summit, which was held in Ottawa, convinced that Washington should avoid so-called globalist solutions. He rejected European pleas to share decision-making power with U.S. allies.

The shift also reflects the changes in the relative economic strengths of the United States and its trading partners. In 1981, Washington was far stronger economically than most of its allies. Japan and Western Europe have since narrowed that gap.

The Japanese “are beginning to play a role that is commensurate with their status as the second-largest economic power in the world,” Baker contended in a Public Broadcasting System interview Tuesday morning. “We think that is a very healthy thing.”

Constrained Influence

Finally, Washington’s influence this year is constrained by Reagan’s status as a lame duck who cannot make decisions--or threats--that last beyond Jan. 20 when a new President takes office. There is little doubt that the next President will carry more weight at next year’s summit, in Paris.

Still, the summit here has provided some firm evidence that at the very least, American dominance on international economic issues has dwindled. The United States may still be the first among equals on trade and economic issues. But its allies are visibly more equal than before.