The leaders of the major industrialized nations bade farewell to President Reagan on Tuesday by rejecting his dream of an end to farm subsidies by the year 2000.
The Toronto meeting of the ”Group of Seven” was Reagan`s last economic summit, and he basked in praise for his nearly eight years at the helm of the world economy. The summit`s host, Canadian Prime Minister Brian Mulroney, told the closing session that Reagan`s ”accomplishments are most substantial and his place in history is secure. We shall all miss his warmth and his wisdom.” The summit brought together the leaders of the United States, Britain, France, West Germany, Japan, Italy and Canada, plus the European Common Market. The leaders, apparently anxious to reassure world markets, stressed the positive and deliberately avoided controversy.
But Reagan had one aim for this low-key summit: endorsement by his allies of his campaign to achieve total free trade in agriculture by eliminating all farm subsidies within the next 12 years. He didn`t get it.
Instead, the final communique committed the summit nations to the
”reduction of all direct and indirect subsidies,” but endorsed neither the goal of an end to subsidies nor a timetable.
The reason was embodied in another phrase that said ”ways should be developed to take account of food security and social concerns.”
This was diplomatic shorthand for Japan`s subsidization of its farmers to avoid dependence on imports, and for the Common Market`s highly protected farm system aimed at keeping even unproductive farmers in business.
It was opposition from the Common Market and, less vocally, from Japan that defeated the U.S.
In previous statements, both had agreed to subsidy ”reductions” and refused to go further here.
”We got the results that we wanted,” said a clearly pleased Pascal Lany, aide to Common Market President Jacques Delors.
Reagan contends that the expensive subsidies hamper farm trade and should be scrapped. The Europeans agree that they should be reduced but say they are so politically popular and entrenched that to try to eliminate them is unrealistic and only gets in the way of more achievable reform.
From the summit, Reagan went to Toronto`s Royal York Hotel for a genial speech to the city`s Empire and Canadian Clubs.
The speech praised free enterprise, hard work, free trade, U.S.-Canadian relations and particularly the recently signed trade agreement between the two North American neighbors.
As he did after his trip to Moscow, Reagan called Soviet leader Mikhail Gorbachev ”a serious man seeking serious reform. . . . I know I speak for all of us in saying our prayers go with the Soviet peoples.”
Much of the speech seemed to have as much to do with U.S. and Canadian politics as it did with the summit. Reagan lavished praise on Mulroney, who faces a re-election campaign and is trailing in the polls. And he lauded antidrug initiatives that he said were conceived by Mulroney and Vice President George Bush, now running to be Reagan`s successor.
Reagan christened a plan approved at the summit to make the laundering of drug money more difficult as ”the Bush initiative.”
There was, in fact, something good politically in the summit for almost all of its participants.
Japanese Prime Minister Noboru Takeshita gave Japan a new high profile at these sessions, with a plan for debt relief and the signing of a scientific and technical agreement with Reagan. For the first time, Japan appeared to be accepting the global leadership that goes with its powerful economy.
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British Prime Minister Margaret Thatcher set the tone for the summit with a confident opening speech, cementing her status as Reagan`s successor as the senior summiteer.
The Common Market president has always been a little-regarded ”eighth man” at summits. But Delors led the fight against Reagan`s farm-subsidy plan; and his victory, coupled with growing European integration, made the 12-nation bloc a greater force in international meetings.
The rest of the communique was less contentious and more upbeat. It hailed the present period of economic growth, the increased cooperation among the summit nations and the present level of the dollar against other currencies.
It warned the ”newly industrializing economies”-shorthand for South Korea, Taiwan, Hong Kong and Singapore-that their growing economic power requires them to assume ”greater international responsibilities.”
It confirmed earlier reports of a new approach to easing debt for the
”poorest” nations, generally the countries of sub-Saharan Africa. Under this approach, creditor nations would be free to offer these debtors lower interest rates, longer periods of repayment or even a partial write-off of their debt.
The offer will have limited impact. The poorest nations owe a total of about $120 billion, one-tenth of total Third World debt. Only loans from governments, not banks, will be affected. The U.S. has said it will offer only one of the options, longer repayment periods, but will not object if its allies offer the other items from the ”menu.”
The U.S. originally opposed this approach because it feared it might set a precedent for debt relief for Latin America. But its allies, eager to help their ex-colonies in Africa, persuaded the administration to go along, partially by including a section backing the ”Baker Plan” for Latin American debt. This plan, named for Treasury Secretary James Baker, links increased bank lending with market-oriented reform by the debtor nations.
In a news conference after the summit, Reagan was asked what his administration was doing about the drought afflicting much of the U.S.
”We have a task force out there taking a firsthand look,” he said. ”We don`t underestimate the seriousness of this at all. . . . Outside of praying for rain, there isn`t anything I can do until we hear from them.”
Asked if he might visit areas affected by the drought, Reagan said,
”That`s going to depend on whether the task force sees that there might be any value in doing that.”
Despite the record losses in the savings and loan industry, Reagan said:
”I don`t believe there`s a crisis. The market today went up 25 points, and our growth is still continuing.”
Reagan was asked if he had given up on attempts to oust the Panamanian leader, Gen. Manuel Antonio Noriega.
”There are many things I can`t comment (on),” he said. ”We still feel . . . that a military dictatorship in Panama under Gen. Noriega is not what we want to see continue, but I can`t speculate or even hint at what might be options that are being considered.”
Earlier in the day, Reagan told a reporter that Democrat Michael Dukakis would win the presidency ”over my live body.” Asked at the news conference what he meant by that, Reagan replied, ”Well, because the old expression is
`my dead body,` and I wouldn`t want somebody to take me up on that.”