Bush, Kohl Draft Key Compromises : Summit: Agreements on Soviet aid, global warming and trade are likely to shape the 7-nation declaration.

By DAVID LAUTER

July 10, 1990 12 AM PT

TIMES STAFF WRITER

HOUSTON —

Faced with the threat of divisive conflicts, President Bush and West German Chancellor Helmut Kohl forged a series of tentative compromises Monday on the major issues facing the economic summit: aid to the Soviet Union, global warming and trade.

Meeting privately in advance of the formal opening of the summit, the two leaders engaged in a high-stakes round of horse-trading that appears likely to shape the final declaration that the seven summit nations will issue at the conclusion of their meetings here Wednesday.

The agreements are the most tangible result to date of the “special relationship” that aides to both men say Bush and Kohl have forged in recent months.

The overall shape of the deal appears to give Kohl most of what he wanted on financial aid to the Soviets, which he has favored and Bush has opposed. In return, West Germany made concessions to the United States on trade and the environment, including a major pullback on global warming that deeply disappointed environmental activists here.

“It’s the Bush-Kohl special relationship aided by Germany’s victory in the World Cup,” said one senior Administration official, referring to the quadrennial soccer championship won Sunday by the West German national team over Argentina. “It never hurts to catch people when they’re up.”

After formal welcoming ceremonies featuring 21-gun salutes and Army drill teams in colonial uniforms marching under a blazingly hot and humid Texas sky, the leaders of Britain, France, Italy, Japan, Canada, West Germany and the United States began their first summit sessions behind closed doors on the campus of Rice University.

They followed the afternoon session with an elegant dinner and returned to work Monday night.

Under the terms of the proposed compromise worked out by Bush and Kohl, aid to the Soviet Union--unpopular in the United States, especially with Bush’s conservative supporters--would be linked with the more politically palatable idea of aid to the new non-Communist governments of Eastern Europe, U.S. and West German officials said.

The allies would create an umbrella aid program for nominally collective action, but each of the Western nations and Japan would be free to choose for itself which nations to help. Bush, an Administration official said, planned to present the idea formally to the full summit at the dinner meeting Monday night.

On global warming, West Germany had been pushing for a summit declaration that would have committed the seven nations to “clear reductions” in emissions of carbon dioxide and other “greenhouse gases” that are considered the chief causes of a slow but ominous warming of the Earth’s climate.

Bush has opposed any such declaration, and, in the strongest public statement yet of the Administration’s opposition, White House Chief of Staff John H. Sununu in the morning denounced as a threat to economic growth the efforts to mandate reduced carbon dioxide levels.

“Any growth at all, then, would not be permitted,” Sununu said.

West German officials rejected that argument. Kohl had told Bush in their meeting that “there is no contradiction between global environmental protection and growth,” West German Finance Minister Theodor Waigel told reporters.

But in Monday’s meeting, Bonn agreed to back away from the declaration that it had sought, settling instead for a joint plan by the industrial world to help Brazil preserve its Amazon rain forest. The vast rain forest ecosystem plays a major role in stabilizing carbon dioxide levels worldwide.

West German officials provided the outline of the new arrangement to reporters, and American officials later confirmed it.

Environmentalists, who had been counting on German support for a major effort to reduce carbon dioxide emissions, denounced the deal.

“It would be a gross disappointment,” said Daniel Becker, a spokesman here for the Sierra Club.

Although preserving the Brazilian rain forest has been a major priority for environmentalists, the trade-off of strong measures to reduce carbon dioxide emissions in the industrial world is too high a price to pay, environmental activists here said, especially since it is not clear how significant the preservation effort would turn out to be.

U.S. and West German officials were meeting late Monday night in efforts to flesh out the details of the rain forest proposal and final compromise language on the overall issue of global warming.

On trade, West Germany also made a concession, agreeing on a framework for negotiating reductions in agricultural subsidies that U.S. officials had favored. Agricultural subsidies have been the chief problem for negotiators in the current round of international talks aimed at reducing global trade barriers.

To the Administration, farm subsidies and related programs have stood as a major barrier to the exporting of agricultural products to Europe and Japan by less-developed nations--and by American farmers. Unless the industrialized nations are willing to open their agricultural markets to producers in other countries, it is argued, the poorer nations will be unable to buy the industrial products produced in Europe and Japan.

Conversely, failure to make progress on agriculture could set off protectionist retaliation among the less-developed nations. No less important to the Administration, such protectionism would prove costly to American farmers, who are among the world’s most efficient producers and thus can profit from free markets for agriculture.

Aid to the Soviets dominated the Bush-Kohl meeting, as it has the public discussion before the summit, according to German officials.

Kohl, said one official, emphasized to Bush that in the past “we spent tremendous sums to protect the world against Soviet expansion.” Now, for “just a tiny fraction” of those sums, the Western nations can ensure a Soviet transition to democracy, the official quoted Kohl as adding.

Under those conditions, aid “lies in our common interest,” the official said.

The West German proposal to link Soviet and Eastern European aid has grown out of West Germany’s experience in the last few months of incorporating the East German economy, West German Economics Minister Helmut Haussmann said. The economies are so intertwined that “you can’t do it in Central Europe without aiding the Soviets,” he said.

At the same time, the proposal provides substantial political benefits. By linking aid to the Soviet Union with aid to Eastern and Central Europe, as the Germans are understood to have proposed, the summit would preserve the appearance of unity among the major industrial powers while giving Bush protection from conservatives who oppose any assistance to the Soviets.

On the environment, the summit had been heading for a major confrontation in which the United States would have been alone in opposing measures being sought by Kohl and other European leaders.

At last year’s summit, the leaders of the seven major industrial powers announced that they “strongly advocate common efforts” to limit emissions of carbon dioxide and other gases that are believed responsible for an apparent slow but ominous warming of the Earth’s climate.

Carbon dioxide is released whenever anything is burned. The use of oil, coal and wood for energy, coupled with the cutting of tropical forests, are believed to be the chief man-made causes of an increase in carbon dioxide production worldwide.

This year, Kohl had been urging that the summit go much further. In a letter to the other six summit participants late last month, the text of which was released Monday, Kohl called for “internationally binding regulations” to limit carbon dioxide emissions “at the earliest possible date.”

The West German government, he noted, has pledged that by 2005 it will reduce Germany’s production of carbon dioxide to a level 25% lower than current amounts. Britain, which has largely aligned itself with Germany on the issue, has made a somewhat less dramatic pledge, to stabilize carbon dioxide emissions at the 1990 level.

But while the European sense of urgency on the issue has increased over the last year, the Bush Administration has headed in the other direction. Bush’s major advisers, led by Sununu, insist that scientific evidence of the causes and effects of global warming are too sketchy to justify potentially costly actions to reduce the use of fossil fuels.

Sununu and Richard G. Darman, the Administration’s budget director, have both made public statements in recent weeks harshly critical of environmentalists for advocating positions that, they say, would stifle economic growth. The European emphasis on global warming is a result of “emotional responses” and the strength of environmentalist political parties, Sununu said in a Cable News Network interview Saturday.

On Monday, before the Bush-Kohl meeting, Sununu told reporters that “the words that people are seeking” for the final summit communique would damage both the United States and the developing nations of the Third World. “Any growth at all would not be permitted.”

Moreover, Sununu insisted, efforts to combat global climate change by focusing on human activities are misguided because “96% of the carbon dioxide that flows into the atmosphere comes from natural sources.”

Environmental activists were quick to denounce Sununu’s statement, likening it to former President Ronald Reagan’s well-known 1980 campaign remark about air pollution being caused by trees.

In fact, Sununu’s statistics are technically correct: The vast bulk of carbon dioxide emitted into the atmosphere does come from natural processes, everything from the breath exhaled by every animal to the decaying of leaves on a forest floor.

But over the ages, those natural emissions have been balanced by other natural processes that absorb carbon dioxide. What has changed has been a rapid increase in human activities that add to the carbon dioxide put into the atmosphere, along with a parallel reduction in nature’s ability to counterbalance the increase.

Trees and other green plants absorb carbon dioxide and give off oxygen, but worldwide deforestation has reduced the Earth’s capacity to absorb carbon dioxide.

The 4% of carbon dioxide coming from man-made sources that Sununu referred to has been enough to cause a noticeable increase in the levels of the gas in the atmosphere. Many scientific studies indicate that because carbon dioxide tends to trap heat, the result has been to warm the Earth, a process that eventually could cause dramatically damaging changes in sea levels, agriculture and weather patterns.