Insider : Money Gets Starring Role on Diplomatic Stage : The Treasury secretary’s travels from Moscow to Tokyo showed how foreign policy and the world economy have become nearly one.

On the first day of the recent U.S.-Russian summit, American business executives in Moscow were treated to a rare, but telling sight: Secretary of State Warren Christopher standing at a lectern in an elegant hotel dining room, stalling for time because the featured speaker was delayed.

The speaker was Treasury Secretary Lloyd Bentsen. Unfortunately, Christopher told guests at the first luncheon session of the American Chamber of Commerce in Moscow, Bentsen was at that moment with President Clinton presenting a central element of U.S. foreign policy to Russian President Boris N. Yeltsin.

In the new world that continues to unfold with the collapse of the East-West rivalry, the scene at the lectern in the Metropole Hotel two weeks ago--the secretary of state playing warm-up act to the secretary of the Treasury who was delayed by a meeting at the Kremlin--said it all: The conduct of foreign policy and the stewardship of the international economy have become nearly inseparable.

To be sure, there are arenas in which a clearly drawn line still divides the two. But in an increasing number of instances, that division is becoming blurred.

Bentsen’s 12-day journey across Asia, which began in Moscow and ended in Tokyo with stops along the way in Indonesia, Thailand and China, sought to dramatically set this new diplomacy apart from the past. And it served to underscore the new reality that the success of the domestic economy is now intertwined not only with the prosperity of traditional U.S. trading partners in Europe but, more than ever, with Asia.

“The international economy is central to our economic prospects, and to our domestic economic policy,” Bentsen said. The Moscow summit, with its focus on financial matters--in effect, the diplomacy of business rather than the business of diplomacy--made it clear, he added: “Economic policy is an increasingly important dimension of foreign policy.”

It’s a lesson carried over to a large degree from the last presidential election.

The economy played a crucial role in Clinton’s victory--it was George Bush’s concentration on traditional security issues that helped cement the impression among voters that he had let the economy go down the tubes while focusing on distant trouble spots.

During its first year in office, the Administration had its problems dealing with more traditional foreign policy dilemmas such as Bosnia, Somalia and Haiti. But it succeeded on such economic issues as the North American Free Trade Agreement and the General Agreement on Tariffs and Trade.

“The President is more comfortable with economic issues than he is with foreign policy, so when he thinks internationally, he is more comfortable turning to his economic team for advice,” said a senior Administration official with ties to the Clinton campaign.

Another factor, Administration officials say, involves the personalities of the key players.

Bentsen is accustomed to an out-front role on Capitol Hill, they note. He was groomed for a life in the public eye, growing up as the scion of a wealthy Texas rancher. His association with an issue--in this case the foreign policy side of the economy--elevates it.

Christopher, who hails from hardscrabble North Dakota, played the role of loyal deputy in the Lyndon B. Johnson and Jimmy Carter administrations. He was a successful Los Angeles lawyer known for favoring careful, precise, private negotiating over courtroom theatrics. His association with an issue is more likely to sweep it into the back rooms of policy debate.

Disappearance of the political and military tensions that dominated America’s relationship with the Soviet Union has clearly tipped the scales. “Relatively speaking, the economy is more important; it is not more important in and of itself,” said Brent Scowcroft, Bush’s White House national security adviser.

But at its heart, the merged roles of economics and diplomacy in such circumstances as the Moscow summit demonstrate the evolution that is under way. So it is that the secretary of state would address a Chamber of Commerce luncheon in Moscow, while the secretary of the Treasury, in Beijing, would make the connection between key political and economic issues.

“You have a secretary of state willing to raise economic issues and a secretary of the Treasury willing to raise human rights issues,” a senior Treasury official said, referring to Christopher’s speech on the Russian economy and Bentsen’s linkage of Chinese prison labor to the troubled extension of trade benefits.

As Administration policy-makers see it, economic improvements lead to political stability, which leads to respect for human rights, which leads to yet greater prosperity.

“Clearly, human rights and economic progress can and often do go together,” said a senior Treasury official. For example, he said, linking human rights standards to extension of China’s trade benefits “will support economic reform, and economic reform will in turn help support human rights,” creating “a virtuous circle in which progress in human rights abets further (political) opening abets economic development abets human rights.”

With the Clinton Administration focusing on the role of exports in fueling economic growth, just as the Bush Administration did before it, it has not been lost on senior officials that the percentage of the gross national product attributed to foreign trade has grown. Roughly 5% of the GNP came from foreign trade in the 1960s. Now, roughly 10% is pegged to trade.

“It is politics as much as technology that determines the level and quantity of trade,” a senior Treasury official said.

There is merit in the linkage that is taking place between economics and diplomacy, said Scowcroft: “We’re at that kind of intersection where real progress in world economic relationships may be possible. There can be a lot of tying together that substitutes for the unity that came in opposing the Soviet threat.”

But, there is also danger: As political leaders find their national economies growing ever more intertwined with the world economy and less open to domestic control, they could turn to protectionism.

The risk that must be avoided, he said, is that Washington--or other capitals--can place such a great dependence on international economic connections that “the key controls pass out of national hands,” leaving the domestic economy captive of forces beyond the control of the political leaders.