At G-8 Meeting, Bush Will Face a Test on Substance

TIMES STAFF WRITER

With the world's wealthiest countries all facing a serious economic slump that shows no signs of bottoming out, President Bush arrived in Europe on Wednesday to face leaders from Europe, Japan and the Americas eager for his ideas and direction on reversing the trend.

After three foreign tours to introduce himself to Washington's closest allies in the Americas and Europe and to put his administration's issues on the table, this trip will be the president's first real test on the global stage. This time, he will be expected to produce something more tangible, analysts say.

His varied itinerary ranges from dining with Queen Elizabeth II today on his first stop in London to rallying U.S. troops stationed in the volatile Yugoslav province of Kosovo during his final leg Tuesday. But the trip is built around a critical three-day summit of the world's leading industrialized nations in the Italian port city of Genoa, where debate will be intense inside the conference center and on the streets.

The Group of 8 leaders--from Britain, Canada, France, Germany, Italy, Japan, the United States and Russia, a newcomer added to the original Group of 7--won't be the only participants in the summit. In what has become a growing challenge for all major meetings of world leaders, an estimated 100,000 protesters also are expected to descend on Genoa to demonstrate on issues ranging from globalization and debt relief to AIDS and the environment.

Mass demonstrations at two recent summits--when Bush met with 33 leaders from the Americas in Quebec City and with 15 European Union heads of state and government in Goteborg, Sweden--broke down into violence and stole the limelight. The scope of demonstrations in Genoa is expected to dwarf all past protests, including the 1999 World Trade Organization demonstrations by about 35,000 in Seattle.

The summit carries particular importance this year because of the world's woes. A U.N. study issued last week warned that the world faces a "significant decline" in the growth of global production and trade this year. And it concluded that the length and severity of the U.S. economic slowdown will be the decisive factor in determining the world's fiscal health this year.

"The problem we face is that one engine seems to have stalled or slowed down or is not pulling at the rate it was," Ian Kinniburgh, a senior U.N. economist, said in Geneva when the report was released.

The report, which described the slowdown in America in the second half of 2000 as "extraordinary," noted that the world has been a "plane with one engine" since Asia's 1997-98 financial crisis.

Globally, the growth in international trade is expected to drop from 12% last year to 5.5% this year, said the United Nations' "World Economy in 2001." And the growth in gross product worldwide is expected to slow from 4% last year to 2.5% this year.

The central theme of the summit, an event that dates back to 1975 and rotates among the original G-7 members each year, is poverty alleviation. In Genoa, Bush hopes to advance a "vision of partnership" between the G-8 and developing countries based on mutual responsibility, National Security Advisor Condoleezza Rice told reporters before the trip.

The formula being advanced is a foreign extension of Bush's "compassionate conservatism" at home, Rice said. It calls for developing countries to introduce reforms that will promote democracy, open and fair judicial systems and economic accountability while ending corruption in order to attract foreign and private investment. In exchange, the wealthy industrialized nations will help provide the technical tools and financial resources to promote growth.

Developing countries have also been invited to attend--a practice started at last year's summit in Okinawa, Japan--and they include Algeria, Bangladesh, El Salvador, Mali, Nigeria and South Africa.

During the summit, the full G-8 will also formally launch the new Global Fund for AIDS and Health, which may prove to be the most tangible product of the Genoa meeting, U.S. analysts predict. The fund will emphasize prevention as well as treatment of the global pandemic that has already killed 22 million people and infected 36 million others.

The fund has so far won commitments of about $1 billion from governments and private institutions, including $200 million from the United States. But to have an impact, health experts estimate, it will need between $7 billion and $10 billion annually. Rice said she hopes that significant contributions will be added at the summit.

Other issues on the G-8 agenda include climate change; access to education; the digital opportunity task force, or dot-force, created in Okinawa last year to try to close the technology gap between developed and developing countries; and regional conflicts, most notably the turbulence in the Mideast and the danger of civil war in politically fragile Macedonia. But neither U.S. officials nor diplomats from other countries anticipate any major announcements.

The most important breakthrough would be preliminary agreement on issues to ensure that the next round of negotiations by the WTO, which is due to meet in Qatar this fall, makes significant progress. One of the biggest stumbling blocks in Seattle was the problem of what to do for developing countries, which complained that the costs of complying with many WTO standards would be financially prohibitive. The poorer countries also said they needed guarantees of expanded market access in the developed world.

"Such an agreement must have as a central component a new deal for the developing countries," said Lael Brainard, who was deputy national economic advisor to President Clinton and a key player in the Okinawa summit. "It will be very difficult to achieve, so it would be a very big win."

Bush will also have his second meeting with Russian President Vladimir V. Putin. As with the president's previous European visit, this time the talks will also be more than a get-to-know-you session. Among the hot topics are the controversial U.S. plan to build a national missile defense system, Moscow's media clampdown and the war in the separatist Russian republic of Chechnya.

U.S. analysts predict that Putin is particularly unlikely to reverse course in what is in effect a veto of a Bush administration plan to streamline sanctions on Iraq to address the issue of public suffering. Russia this month blocked a U.S.-British resolution that would change the decade-old U.N. policy on Baghdad. Because its investments in Iraq's oil and gas fields are at stake, Russia wants all sanctions lifted.

"There's no reason to believe that Putin will give in at the summit when he wasn't willing to give in before. He's going to hold it in his pocket until he gets something for it," said James Steinberg, former deputy national security advisor in the Clinton administration.

On the sidelines of the summit, Bush will also meet with German Chancellor Gerhard Schroeder, French President Jacques Chirac and Canadian Prime Minister Jean Chretien.

After the Genoa summit, Bush will fly to Rome to meet with Italian Prime Minister Silvio Berlusconi and have an audience with Pope John Paul II at the pontiff's summer residence on Monday.

On Tuesday, before returning to Washington, Bush will fly to Camp Bondsteel in Kosovo to meet with U.S. troops and talk with North Atlantic Treaty Organization military leaders helping to stabilize the Balkans.

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