Posted on: Wednesday, July 18, 2001
Economic summit faces new landscape
By Martin Crutsinger
Associated Press
GENOA, Italy — In the year since the last economic summit, the landscape confronting world leaders has been radically transformed.
On the economic side, boom times have turned to bust with the United States struggling to rebound from feeble growth, Europe weakening and Japan probably back in a recession.
On the political side, the United States has a new, conservative Republican leader to replace Democrat Bill Clinton.
President Bush made it clear yesterday that he will use his first economic summit to push his free-market ideas and to challenge demonstrators against economic globalization.
"What some call globalization is in fact the triumph of human liberty stretching across national borders," Bush said in a speech to the World Bank in Washington. "It holds the promise of delivering billions of the world's citizens from disease and hunger and want."
Bush said protesters trying to stop free trade are "no friends of the poor" because they "seek to deny them their best hope for escaping poverty."
Bush called on the G-8 summit — the seven wealthiest democracies, plus Russia — to endorse the launching of a new round of global trade talks by the World Trade Organization, something demonstrators were able to thwart in Seattle in 1999.
Trade negotiators from the United States and the European Union met for two days in Washington and said late yesterday they had made progress in resolving differences over what should be covered in a new round.
"We agree that there is a real risk to the system" if fresh global talks aren't begun, U.S. Trade Representative Robert Zoellick said.
Bush said in his speech that he would also be pushing for changes at the International Monetary Fund and World Bank, including greater emphasis on educating poor children and increased use of grants rather than loans to the poorest nations as a way of avoiding the buildup of debt.
Critics have said such a goal could actually result in poor countries getting less help unless rich nations agree to increase their support to the multinational lending agencies.
Bush will also be facing a barrage of questions from the other leaders upset over his opposition to the Kyoto global warming treaty and the 1972 Anti-Ballistic Missile Treaty.
British Prime Minister Tony Blair, French President Jacques Chirac and German Chancellor Gerhard Schroeder are all expected to lobby Bush at the summit to moderate his opposition to the Kyoto treaty, which Bush has called "fatally flawed."
But the administration is showing no signs of backing down on either the environmental dispute or the administration's insistence that the ABM treaty is outdated because it would prevent the United States from constructing a missile shield.
Russian President Vladimir Putin will certainly voice his objections to Bush's stance on building a nuclear missile shield, which Russia views as a threat.
While protesters are talking of 100,000 demonstrators around the summit security zone, the government of Italian Premier Silvio Berlusconi has brought in thousands of troops and extra police to maintain order.
The leaders also have shaped this year's agenda to demonstrate ways they are trying to bridge the gap between the haves and have-nots. One result of the three days of talks is expected to be creation of a global health fund to combat AIDS and other infectious diseases in poor nations.
The United States is already contributing $1 billion annually to this effort and has pledged an initial $200 million to the new fund, an amount Bush said yesterday would be increased "when it demonstrates success."
Critics have said these amounts are woefully short and that the effort needs between $7 billion to $10 billion annually from rich countries.
For a second year in a row, the summit leaders will invite leaders of several developing countries for a session Friday night devoted to such issues as removing trade barriers to farm goods and other products produced in poor countries.
The summit will also consider a number of recommendations from a task force appointed at last year's meeting in Japan for narrowing the digital divide that separates rich countries with easy access to computers and the Internet from poor nations.
In addition to reviewing the economic woes of poor countries, this year the rich nations will have plenty of their own troubles to talk about. Bush said it was incumbent on the wealthy countries to do everything possible to promote growth because "global prosperity depends on the world's economic powers keeping our economic houses in order."
The United States will point to the aggressive credit easing by the Federal Reserve and Bush's successful effort to win approval of a $1.35 trillion tax cut as the prescription for a U.S. rebound while looking to new Japanese Prime Minister Junichiro Koizumi to fulfill his campaign promises to lift Japan out of a decade-long slump.
If the weakness among the major powers isn't enough, there is growing concern about another Asian-style currency crisis, triggered by a possible debt default in Argentina.
