For Clinton, summit has shaky start

July 09, 1994|By Paul West | Paul West,Sun Staff Correspondent

NAPLES, Italy -- For Bill Clinton, the timing could hardly have been worse.

As the president's 747 jet was touching down in Naples for this weekend's sultry summit of the world's richest nations, someone changed his carefully planned script.

That was Guillermo Endara, the president of Panama. Despite owing his job to the U.S. invasion of his country in 1989, he decided to back away from a 2-day-old deal with Mr. Clinton to house Haitian refugees in Panama.

Along with continuing weakness of the dollar, which reached lows yesterday, the latest setback to Mr. Clinton's troubled Haiti policy threatens to undermine his effort here to raise his stature as a global leader during the annual summit of the seven wealthiest democracies and Russia.

The midsummer meeting, which began last night in this hot, chaotic Mediterranean port city, could be Mr. Clinton's "redemption summit," as Italy's largest newspaper put it.

Down in the polls at home, where a majority of Americans disapproves of his handling of foreign policy, and still an unproven figure on the international scene, Mr. Clinton is hoping to score points with U.S. voters as well as foreign leaders.

He contends that he has an impressive story to tell here -- and he is doing so at every opportunity.

"America," Mr. Clinton boasted again yesterday, "provided 75 percent [of the world's economic] growth and about 100 percent of the new jobs over the last year."

The U.S. recovery, which Mr. Clinton's election helped to spur, has fed a worldwide rebound that finds the seven countries represented at the summit in their best economic shape in years.

Mr. Clinton said he would urge fellow leaders "to keep the world recovery on track" by pushing for a new trade and investment initiative called Open Markets 2000. If approved this weekend, the plan would set the stage for a new round of trade negotiations on such areas as biotechnology, telecommunications and financial services.

Meantime, the president and his aides were doing their best to play down the Haiti issue. Although he said he was "disappointed" over the latest turn of events, Mr. Clinton refused to engage in a public war of words with Mr. Endara.

During an outdoor news conference yesterday with a particularly striking backdrop -- a yacht basin at the foot of an 11th-century stone fortress, with the slopes of Mount Vesuvius looming off his right shoulder -- Mr. Clinton tried to deflect attention from Mr. Endara's decision and focus it on the increasing violations of human rights under Haiti's military dictatorship.

That seemed only to draw more questions about whether the United States is moving toward an invasion of Haiti. Mr. Clinton said he is no closer to taking such a step today than he was several months ago, despite a growing U.S. military presence off the Haitian coast.

Panama's defiant turnabout, accompanied by Mr. Endara's angry blast at the arrogance of a White House aide, came one day after Mr. Clinton's policy was sharply criticized by a top official of another U.S. ally, Germany.

Inconsistent U.S. government policy and continued problems in U.S.-Japanese relations are to blame for the recent fall in the dollar, according to German Finance Minister Guenter Rexrodt.

The dollar hit a postwar low against the Japanese yen and a 16-month low against the German mark yesterday, before recovering in late trading. The dollar closed yesterday at 98.10 yen, down from 98.60 yen Thursday, and at 1.563 German marks, down from 1.5722 Thursday.

Not everyone at the summit thinks a weak dollar is bad. Ever the gracious host, Italian Prime Minister Silvio Berlucsconi found advantages in a devalued dollar, which he said was good for the United States and for Italy, whose imported oil costs less when the dollar falls.

"I don't see any need for a major initiative every time the dollar is weak," he said before meeting yesterday with Mr. Clinton. No major action on the dollar is expected this weekend, although the communique to be issued today is likely to address the issue.

After initially hinting that it favored a weaker dollar -- which makes U.S. goods cheaper overseas and makes imported items more expensive for Americans to buy -- the administration now says it does not wish to see the United States gain economically through a devalued dollar. Analysts have said that one reason for the decline of the dollar against the Japanese yen and the German mark is a perception by financial markets of weakness in Mr. Clinton's leadership.

Mr. Clinton, who met earlier in the day with Japan's new prime minister, Tomiichi Murayama, said once again at his news conference that there should be no intervention by the U.S. government and others to raise the value of the dollar. Immediately after those remarks, the dollar hit its low.

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