President OKs Gorbachev at Economic Talks

WASHINGTON —  President Bush has dropped his previous objection to a meeting between Soviet President Mikhail S. Gorbachev and leaders of the seven major industrialized democracies at next month’s economic summit in London, an Administration official said Tuesday.

Bush’s decision clears the way for the unprecedented meeting, at which the Soviet leader is expected to plead for massive Western assistance to shore up his country’s crumbling economy and to advance his embryonic economic reform program.

Four of the seven countries have publicly endorsed Gorbachev’s bid to meet with the summit partners, beginning with Canada and Italy two weeks ago. German Chancellor Helmut Kohl and French President Francois Mitterrand backed the idea during a Franco-German meeting in northern France last week.

State Department officials acknowledged at the time that it would be difficult for the United States, Britain and Japan, the remaining holdouts, to resist growing international pressure to give Gorbachev a highly visible hearing.

Although the Soviet leader is unlikely to participate in the three days of actual summit deliberations, the Administration has suggested that he could confer with the participants at a special session after the official meeting ends July 17. It is scheduled to begin July 15.

An Administration official, speaking on condition of anonymity, said that Bush spoke by telephone Tuesday with British Prime Minister John Major. The official said that Bush had decided on Monday that he would drop his objection to inviting Gorbachev to London, assuming that the meeting would be held after the formal summit is adjourned.

Administration officials said that because Major is the host of this year’s meeting, it was being left to him to make a formal announcement inviting Gorbachev.

One U.S. diplomat noted that the countries that pushed hardest for Gorbachev’s appearance were those that would be expected to provide the least amounts of aid. “It’s pretty easy for the Italians and Canadians to promote this idea,” he said.

Germany already has given the Soviet Union more than $37 billion in direct aid since the Berlin Wall collapsed in November, 1989. Of that total, $9 billion was part of an agreement for the withdrawal of Soviet troops from East Germany. Much of the rest is a continuing aid program similar to the financial infusion Gorbachev is seeking from the other Western powers.

The Soviet president has not suggested specific dollar amounts, although one of his advisers, Grigory Yavlinsky, has spoken of $35 billion to $50 billion in U.S. aid each year for at least five years. Yavlinsky met with Bush last week.

The economic summits began in Rambouillet, France, in 1975, when then-President Georges Pompidou convened the five largest economic powers to coordinate their responses to the global financial crisis after the 1973 Arab oil embargo. Italy and Canada were later added to the list, and the gathering has evolved into an annual session at which the seven review financial and political issues.

In recent months, some Bush Administration officials have recommended that the summit group, known as the G-7, adopt an even wider role in global policy-making.

Although there is no precedent for an appearance by Gorbachev, two years ago Mitterrand invited the leaders of 35 developing countries to dine with the G-7 on the eve of the summit in Paris. The session was intended to focus the West’s attention on the needs of the world’s poorest countries.

The possibility of Gorbachev attending the meetings was first raised at the 1989 Paris summit. At that time, most of the participants agreed that the Soviet economy lagged so far behind those of the seven summit nations that there would be little in common for them to discuss.

But over the last two years, and particularly in recent months, pressure has grown to include the Soviet leader--to some extent out of recognition of the economic progress he has made combined with the desperate conditions in which he still finds himself. European countries, led by Germany, have argued that maintaining stability in the Soviet Union is also important to their own security.

Under the plan being worked out, Gorbachev would meet with the seven after the summit has formally come to an end, allowing them to work out specific aid proposals before hearing from the Soviet president. It also would avoid the possibility of his arriving at a formal meeting, making a plea for assistance and possibly leaving empty-handed, or with less aid than he wanted.

In addition his appearance in London, Gorbachev is expected to meet with Bush in a U.S.-Soviet summit to be held in Moscow in the near future. Administration officials have been discussing a possible superpower summit late this month, but it appears the session may be postponed until after the London meetings.

On Monday, Bush announced he was waiving for another year trade restrictions that otherwise would bar the Soviets from participating in U.S. export subsidy programs. The Administration also is considering a series of moves to extend credits, reduce tariffs and provide technical assistance to the Soviets.

But the White House has been reluctant to endorse the kind of massive aid programs that Gorbachev has indicated he would like to receive from Western nations, particularly in the absence of a detailed economic reform program that appears likely to accomplish its goals.