WORLD

THE NEW REALITY

KOHL TOOK CENTRE STAGE AS LEADERS OF THE INDUSTRIAL NATIONS HELD THEIR FIRST POSTCOLD WAR SUMMIT

MARCI MCDONALD July 23 1990
WORLD

THE NEW REALITY

KOHL TOOK CENTRE STAGE AS LEADERS OF THE INDUSTRIAL NATIONS HELD THEIR FIRST POSTCOLD WAR SUMMIT

MARCI MCDONALD July 23 1990

THE NEW REALITY

WORLD

KOHL TOOK CENTRE STAGE AS LEADERS OF THE INDUSTRIAL NATIONS HELD THEIR FIRST POSTCOLD WAR SUMMIT

European Community President Jacques Delors sported a white satin windbreaker with “Grand Ole Opry” inscribed on its back. Prime Minister Brian Mulroney had donned jeans to go with his new souvenir cowboy boots, and Japanese Prime Minister Toshiki Kaifu brandished a tengallon hat. Among the five of eight leaders who attended an air-conditioned rodeo in sweltering Houston last week, to kick off their 16th annual economic summit, only British Prime Minister Margaret Thatcher, unflinchingly proper in her trademark bouffant hairdo, plaid suit and pumps, declined to join in the Wild West spirit. But when President George Bush led his guests from a backstage barbecue and horseshoe-toss to their ringside seats in the cavernous Astroarena, it quickly became clear that Thatcher’s sartorial style was not the sole element of summit symbolism to go awry.

As the U.S. anthem, The Star-Spangled Banner, boomed over the loudspeakers, a blond cowgirl, in red, white and blue sequins and perched on a horse, rose out of a 21-foothigh cowboy boot on a hydraulic lift, waving a gigantic American flag. Then suddenly, in midanthem, the cowgirl and her horse disappeared back into the boot, leaving her flagpole frantically poking out of the top. To many in the crowd, that image of the sinking Stars and Stripes became an unintended metaphor for one of the most striking developments at what Bush termed the “first post-postwar summit”—the waning influence of the United States in a world where the collapse of the Cold War is rapidly reordering the balance of power.

Indeed, as the leaders of the United States, Canada, Britain, West Germany, France, Italy, Japan and the EC struggled to draft a series of compromises for the final communiqué to bridge their profound differences, it became increasingly obvious that Washington could no

longer impose its will on its allies. Not only did they agree to disagree on the summit’s three key issues—the environment, farm trade and aid to the Soviet Union — but on both the question of a direct bailout for beleaguered Soviet President Mikhail Gorbachev and renewed loans to China, Bush found himself essentially obliged to give his blessing to the countries with the most economic power, Germany and Japan, to go their separate ways.

Although the summit approved only a six-

month study on how to economically aid the Soviets, Chancellor Helmut Kohl is expected to formally present Bonn’s own aid package to Moscow this week. Similarly, the communiqué stated that China had not demonstrated sufficient democratic reforms to warrant releasing further loans—banned since last year’s crackdown on pro-democracy demonstrators. But Japan announced that it intends to proceed with plans to release a previously frozen $6-billion loan to its Asian neighbor. In fact, so indepen-

dent-minded did the leaders seem at times that some observers dubbed last week’s gathering the “Sinatra summit”—after the singer’s rendition of his hit, “My Way.” And Bush himself seemed comfortable with that drift. “It doesn’t work that you have to march in lockstep on all these questions,” he said.

In that changing landscape, Mulroney found himself shifting sides with the issues. And in the process, he seemed at times to be reasserting the country’s traditional honest broker’s role. Canadian officials claimed that his sugges-

tions for a study of the Soviet economy helped bridge a standoff between the Americans and the Europeans. In fact, at the end of the NATO summit in London on July 6, Mulroney had appeared to soften his stance on Soviet aid. He wondered aloud how far Gorbachev would have to go in implementing democratic reforms before the West supported him with an infusion of cash. “The opportunity now exists,” he noted, “and only foolish people would let it slip away.”

But after four days in Houston, Mulroney once more threw his support behind Bush, who remarked that he was not “enthusiastic about the intercontinental ballistic missiles aimed at

our cities.” In the end, Mulroney’s closing statements mirrored Bush’s own objections to direct aid. Referring to the $6 billion that Moscow annually sends to Havana, Mulroney said: “I don’t think it’s offensive to say to somebody who appeared to be pretty broke, ‘You know, it’s not such a smart thing to take money and fork it over to the Cubans.’ ”

In fact, the summit served as a showcase for the leaders’ obvious delight in each other’s company, and Bush went out of his way to give a boost to Mulroney, besieged at home by low polls and criticism of his handling of the Meech Lake debate. The Prime Minister was the only leader he singled out for individual thanks in his closing statement. And even before the summit opened, U.S. organizers went out of their way to cater to Mulroney’s needs. Canadian officials had warned of his discomfort in hot weather. And by the time they arrived in Houston’s oppressive 34° C heat, State Department Protocol Chief Joseph Reed confided that he had added a white canopy to shade the leaders as they stood in the noonday sun for the opening ceremony in Rice University’s quadrangle. As well,a 12-ton air-conditioning system blasted cold air from below the stage. And as all eight gathered for the lengthy renditions of their national anthems, Mulroney, who suffers from an inner-ear ailment that can affect his balance when standing still, was gripping a special T-bar installed for his support.

But the President's greatest effort to bolster Mulroney came on the day before the summit began. After a 30minute meeting in a restaurant attached to the Houstonian Hotel, Bush’s official voting address in his adopted hometown, the two men emerged to announce that negotiations will begin this week in Ottawa towards the Acid Rain accord that Mulroney has long demanded. Hailing it as a historic day in bilateral relations, the Prime Minister acknowledged that "President Bush and I have fought long and hard to get to where we are today.” But Janine Ferretti, of Torontobased Pollution Probe, who was attending a parallel Envirosummit in Houston, dismissed the announcement as “basically inconsequential.”

In fact, many environmentalists charged that by announcing the accord talks, Bush was merely trying to win his own public relations points on the environment while trying to push the topic to the back burner of the summit’s

agenda. And over the course of the parallel meetings, the environmentalists’ exchanges with Bush grew increasingly acrimonious—threatening to give new meaning to the summit’s theme, “Houston’s Hot.” After repeated attacks, Bush struck back at what he called “extremists.” He added angrily, “I did not rely heavily on them for support in getting elected President of the United States.”

Even more divisive was the thorny standoff on agricultural subsidies, which threatened to scuttle the summit. That issue has pitted the United States, which wants an elimination of export subsidies, against the EC, which argues that such a move will throw many of its farmers out of work. And even after the leaders wound up their final gala dinner, no solution appeared £ in sight. In fact, negotiators were closa eted until 4 a.m. last Wednesday bef fore working out a tenuous comprog mise to keep both sides happy—and ¡g allow Bush to claim victory on an issue | that he had made his top priority. In s part, it called for “substantial, proBush and Mulroney pitching horseshoes: a historic day for bilateral relations gressive reductions” in export subsi-

dies, internal price supports and barriers to imports.

But the Europeans' solidarity on the issue was yet another indication of the political realignment now taking place. For once, there was no battle of egos as Thatcher and French President François Mitterrand allowed Kohl to emerge as the continent’s new strongman and the summit’s undisputed star. Not only did he arrive as the leader of a soonto-be-reunified nation that will be the strate-

gic and economic linchpin of the new Europe, but Kohl swept into Houston with extra ebullience after witnessing Germany defeat Argentina in the World Cup soccer final. Indeed, for the first time in summit history, he and Japan’s Kaifu took their places at global centre stage, showing that they are finally ready to take leadership roles equal to their nations’ economic strength. And even Thatcher acknowledged the new shift to three regional power blocs—“one based on the dollar, one

on the yen and one on the deutsche mark.” That recognition might explain the summit’s unusual note of harmony, undercutting its bitter disagreements on specific issues. As the eight leaders began to come to grips with the dizzying changes in Eastern Europe, none of them questioned the fact that, as one U.S. official put it, the era of superpowers has passed.

MARCI MCDONALD in Houston

‘A NOSE FOR OPPORTUNITIES'

Inside the heavily guarded confines of Houston's Rice University, the eight leaders attending last week’s summit spent their lunch hour heatedly debating whether to send aid to a shattered Soviet economy. But across the city, over a lavish buffet at the same hotel serving as headquarters for British Prime Minister Margaret Thatcher, that economy got a curious vote of confidence from an unlikely source: Saudi arms dealer Adnan Khashoggi, a key figure in the Iran-contra affair. Scarcely a week after a New York City jury acquitted him of conspiring to help former Philippine first lady Imelda Marcos conceal her holdings in four Manhattan skyscrapers, Khashoggi flew into Houston for a news conference to announce that he was “back in business.”

Khashoggi unveiled three ventures under a new holding company pointedly named Phoenix Inc., after the bird in Egyp-

tian mythology that, when consumed by fire, rose from its own ashes. Declared Khashoggi: “The shop is open.” In fact, this time his shop will be a discount warehouse in Moscow to sell consumer goods to Soviets for rubles. With those, he plans to buy Soviet hardware for resale to the West for dollars. A would-be merchant-statesman,

Khashoggi helped initiate the covert sale of U.S. arms to Iran five years ago as a way to tap the closed Iranian market. And last week, he made no effort to hide the fact that now he wants onto the Soviet bandwagon. “I have a nose for opportunities,” he said.

Author Ronald Kessler described Khashoggi as the “richest man in the world” in his book of the same title in 1986, just as Khashoggi’s Salt Lake City real estate empire began to crumble into bankruptcy. And Khashoggi’s coming-out party last week in Houston raised questions about hismasswe re-mortgaging of a 21-acre properY there in 1985 through Mainland Savings

Association, which promptly became one of Texas’s largest savings and loan failures. But one of Khashoggi’s partners in a new Houston-based oil and gas company, former Oklahoma oilman Jerry Dale Allen, hailed him as “the top person in the world for opening doors.”

A past financial co-chairman of the Republican national committee, Allen is a friend and business associate of President George Bush's son Neil, who is currently under investigation in a Denver savings and loan scandal. And as a member of the summit organizing 2 committee, Allen invited Khag shoggi to the opening-night rodeo I for world leaders. As for his own u role in the Iran-contra affair, Khashoggi denied reports that he had been prosecuted in part as punish-

ment for exposing the arms deal.

“I don’t think there’s anything I was involved in that deserved any punishment,” he said. “I should be decorated.”

M. M.