Absolutely, Mr. President Positively, Herr Chancellor

March 22, 1992|By STEVEN MULLER

WASHINGTON. — If misery loves company, Germany's Chancellor Helmut Kohl and President Bush may find mutual comfort in their conversations at Camp David this weekend. Each has experienced a sharp fall from the topmost heights of popularity to a prevailing low. The chancellor basked in the golden glow of German unification in 1990, but now he confronts widespread public discontent with the ever rising costs of reviving the economy in East Germany. The president -- conquering hero of Desert Storm a year ago -- now faces distress and criticism for the lingering domestic recession.

As these two leaders meet, the good news is that at the moment no major issue directly threatens good relations between the Federal Republic of Germany and the United States. The bad news is that, while each leader and each nation could very much use the other's help, political realities severely restrict the ability of either to aid the other.

Mr. Bush, for example, would like to see German interest rates come down. The current high rates in Germany, and their direct impact throughout the European Community, discourage European investment in the United States and put pressure on the dollar.

Chancellor Kohl, however -- apart from the fact that the independence of the Bundesbank removes it from his direct control -- has to pay heed to a German inflation rate still running at over 4 percent. Such a rate may seem tolerable in America, but for Germans forever scarred by the runaway inflation of the 1920s, it is anathema. Mr. Kohl will be extending to Mr. Bush his regrets that his hands are therefore tied in the matter.

For his part, the chancellor will do his utmost to persuade the president to increase American assistance to Central and Eastern Europe, and in particular to Boris Yeltsin's Russia. The Germans, already beset with a stream of refugees from the East, understandably fear almost nothing more than the collapse of civil authority beyond their eastern border. They dread not only a ruinous human tide fleeing from civil war and total economic disintegration, but also resurgent and unpredictable militarism and the forfeiture of potential markets essential to their own continuing prosperity.

Mr. Bush has heard all this before and surely understands, but he will need to remind Mr. Kohl that foreign aid of any kind is profoundly unpopular among Americans already unemployed or fearful that their own jobs and incomes are at risk in an ailing economy beset with a $4 trillion national debt. He will scarcely need to add that his own re-election in November is at stake, and that he is now caught even within his own party between the America First demagoguery of Patrick Buchanan and the sententious and contrary counsel of Richard Nixon. The president will not claim that his hands are tied, but Mr. Kohl will recognize the high-risk, high-wire act which the election campaign demands of his colleague.

The major topic of extreme vexation to both leaders and their nations is the future of world-wide free trade, as embodied in the endless negotiations of the Uruguay Round of negotiations for the General Agreement on Tariffs and Trade (GATT).

Both men and both nations support free trade in principle, but the negotiations have been stuck above all on the intractable issue of agricultural subsidies in Europe. Here the United States is insisting on reductions, while the Europeans -- led with fervent vigor by the French -- are resisting. A crisis is now at hand. Every effort so far to break the deadlock has failed, and as the current deadline of March 1993 comes ever closer without prospect of resolution, there is deep and rising anxiety that the negotiations will collapse and that GATT itself might disintegrate.

Such a collapse would be a calamity for both the United States and Germany, but neither the chancellor nor the president may be able to do what is necessary to prevent it. While the collapse of the Uruguay Round would be a political disaster for Mr. Bush that would place a major new weapon in the hands of his Democratic opponent, further concessions by the United States to rescue the negotiations most likely would have the same domestic political effect. The president therefore will be urging Mr. Kohl to do everything in his power to bring about a positive change in the European position, which above all means persuading the French.

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