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Financial Post, Weekly edition, Mon 20 Jun 88, page 14. Editorial.


There are realistic summit goals

The cult of the leader - nurtured in large part by the media - inevitably leads to unrealistic expectations of what leaders can do. These expectations are nowhere more apparent than at this week's Toronto Economic Summit.

Despite disclaimers from the leaders themselves, and their key ministers, the very fact that the Big Seven, along with the European Community chief, are together in one place at one time naturally produces expectations of achievement.

In one sense, it's perhaps no bad thing that there are high expectations about summits. If some results are expected, it at least puts a bit of pressure on the great men and woman to do more than renew acquaintances.

Certainly as host country, Canada will press for an end to the agricultural-subsidy madness and for new initiatives on dealing with Third World debt.

As the summit opens, however, it is very iffy that France and West Germany in particular, are willing to commit to specific measures aimed at reducing agricultural subsidies. While Canada is itself in the subsidy game we are, as Finance Minister Michael Wilson has noted, chiefly a ''defensive'' player; it's France and Germany that have led the way in shoveling out subsidies to support agricultural exports.

On Third World debt, Canada's initiative in writing off a chunk of official development debt for a group of the poorest countries has been followed by French President Mitterrand's proposal to cancel one third of the debt of the poorest nations. It's unlikely this will get much support from the Americans. No doubt the summit's decision on debt will be to place more emphasis on a country-by-country approach to debt forgiveness and/or rescheduling. Such an approach would fit in with the International Monetary Fund's review of the effect of conditions it imposes on poor-country borrowers.

The IMF study is further evidence of how the summit is only one of the various assemblies striving to achieve international economic co-operation. The Organization for Economic Co-operation & Development, the IMF, the General Agreement on Tariffs & Trade, the regular meetings of G-7 ministers - all these gatherings aim for policies to help remove economic disparities, promote exchange-rate stability and discourage beggar-thy-neighbor trade policies.

What makes the summit special, though, is that the leaders can inject political will into whatever policy consensus may emerge from their own deliberations and those of the other international bodies. Once again we have the annual opportunity for the summit leaders to give a political push to policies designed to free up world trade, help work the poorest nations out of debt, and keep on the path toward exchange-rate stabilization. Those are not unrealistic expectations.

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Revised: June 3, 1995

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