THE NAPLES SUMMIT : NEWS ANALYSIS : G-7 Impact Hard to See But Still Key : Summit: Focusing on tough issues over several days often results in breakthroughs, leaders and aides say.

TIMES STAFF WRITER

They have been an annual fixture on the diplomatic calendar now for two decades, but for most people the Group of Seven summit conferences remain a little-understood blur--a yearly photo op of the world's most powerful leaders, followed by turgid communiques of questionable impact.

Despite this image and the enormous global change that has occurred since the leaders of the world's seven richest industrial democracies first convened in the French chateau town of Rambouillet in the fall of 1975, however, the G-7 summit tradition endures.

It does so for two main reasons: It works, and the institution has been flexible enough to adapt to the changes that have swept the global landscape.

Exactly how it works is often not easy to see, but those involved in the meetings, whether the leaders themselves or their aides, claim that breakthroughs on tough issues often come simply because they are forced to focus on key problems as a group over a period that usually spans three days.

"The value of a summit like this is that discussions can be pursued over 2 1/2 days," German Chancellor Helmut Kohl said. "Without the meeting last year in Tokyo, I'm sure we would not have had a (global trade) agreement."

That accord, which sweeps away a vast array of international trade barriers, is expected to add hundreds of billions of dollars to global wealth before the end of the century.

British Prime Minister John Major noted that the summits offer leaders the chance to discuss longer-range issues that invariably are pushed aside by pressing problems during bilateral meetings--issues such as how to achieve ecologically sustainable economic growth or adjust to the challenges raised by the explosion of new technology.

This year's summit was viewed as especially productive. Among its accomplishments, the meeting:

* Provided the most visible evidence so far of Russia's gradual integration into the community of free, industrialized nations as President Boris N. Yeltsin was warmly welcomed to the political discussions that took up much of the summit's final day. While Yeltsin did not join Saturday's session on economic issues, his presence Sunday effectively turned the G-7 into a G-8 for the first time in 20 years.

* Allowed the leaders of the only nations with any chance to influence events in the Balkans--the United States, Russia, Britain and France--to coordinate a joint warning to all parties involved in the war in Bosnia-Herzegovina to accept a recently presented peace plan that many view as the last alternative to greater chaos.

* Enabled the summit participants to consult directly on developments on the Korean peninsula following the death of North Korean leader Kim Il Sung.

* Gave the leaders the necessary forum to confront diverse issues from making safe the highly dangerous set of nuclear reactors still operating in Ukraine's Chernobyl complex to international crime and money-laundering. Such discussions frequently provide pressure to begin work on solutions.

But such achievements touch little on the economic debates that are supposed to be at the heart of the summits--and go little beyond the level of discussion.

The brainchild of then-French President Valery Giscard d'Estaing and former German Chancellor Helmut Schmidt, the summits were conceived as an alternative to brief bilateral meetings, where leaders are usually steered through a choreographed formal program.

The meetings, it was believed, would be a chance for leaders to gather for more than a day and toss around ideas informally.

The idea worked, with U.S. President Gerald Ford, at the initial summit, forging a previously elusive agreement with European leaders on measures to stabilize the dollar.

But G-7 summits certainly have their shortcomings.

Over the years, the summits have grown more elaborate. Larger delegations have accompanied their leaders, position papers have appeared and a growing news media army has given the summits the trappings of a circus.

By mutual agreement, this year the leaders edged back toward more informal discussions and pledged to go further in this direction when they meet next year in Halifax, Canada.

Participants have also found many problems beyond their grasp.

Can they affect currency-exchange problems? Perhaps, but a senior Clinton Administration official said traders themselves exert the greatest influence.

Can they affect broader economic questions? Perhaps, but a growing number of industrial powerhouses are missing, such as Brazil, Indonesia and China.

And as the leaders ended their meetings, this question remained: Had they done any more to make the global economic picture secure?

In the short run, the answer is no: Nothing was done to ease some of the United States' most difficult economic problems.

In the longer run, the answer is less certain, but perhaps not as negative: While no concrete steps were taken, the leaders at least moved into the politically sensitive area of the price that Europe's expensive social welfare programs exact in job creation.

While summits provide the kind of visibility that leaders love to turn into political capital back home, they can also backfire.

President Clinton came to Naples juggling three key economic issues: the shrinking value of the dollar, the questions tied to the United States' huge trade deficit with Japan and a proposal to push ahead with trade liberalization even before the latest global trade agreement has been ratified.

On each, he came away empty-handed.

While officials said the weekend was no time to expect significant progress on such intractable problems as the dollar and Japanese trade disputes, had the leaders been able to achieve real advances, they would have been happy to trumpet them.

When they left Washington, Administration officials at every opportunity pointed to the strength of the U.S. position: an economy that is leading the rest of the summit nations out of recession, steady growth in employment, interest rates climbing up only marginally and no solid signs of a return of inflation.

Such sound economic fundamentals, they suggested, would enhance Clinton's position of leadership among officials struggling with slower, less certain economic growth and uncertainties about their political futures.

But there was no sign that the President translated the sunnier U.S. economic picture into leadership in Naples.

Indeed, his trade proposal--and the way he presented it, without paving the way to avoid embarrassment--was so quickly and roundly derided that he was forced to hastily withdraw it.

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