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. Last Updated: 07/27/2016

On Trade, Summitry and the G-7

Group of Seven summit meetings are such ineffectual gatherings that even concrete promises are often forgotten. But when it came to what Russian officials called the most crucial item on their agenda at the Tokyo summit -- opening up Western borders to Russian goods -- there was not even a promise made that could later be ignored.


The G-7 did include the issue in its communique, but it made only the vaguest pronouncement, which it cloaked in euphemism and wrapped in obscurity. The final statement read: "We recognize the importance of improved market access for economic progress in Russia. We will work with Russia as it proceeds towards accession to the GATT. In this connection, we will intensify efforts to adapt export controls to the post-Cold War era".


For President Boris Yeltsin, who arrived stressing the importance of the trade issues, it was hardly the kind of statement he could wave in victory as he got off the plane in Russia. He acknowledged as much, calling the trade discussions "the most dissatisfying aspect of the meeting".


The more general reason for Yeltsin's failure lies with the G-7 itself. The major industrial nations are not yet ready to open up their borders to cheap Russian goods and high technology that could significantly harm their domestic industries -- even though such an opening could go a long way toward helping Russia through its present rocky economic transition from central planning to market economics.


The West and Japan have erected a variety of trade barriers to keep Russian goods out, at the expense of those Russian enterprises that could be flourishing with the ruble at such a favorable exchange rate.


But Yeltsin himself may share the blame for his disappointment in Tokyo. It is poor summitry to arrive at a meeting touting one issue when your fellow summiteers say another. Yeltsin said trade, and G-7 kept saying aid.


Indeed, the United States, which has emerged as Russia's chief benefactor, made the privatization fund its top issue. With advance work, including several calls to G-7 officials before the meeting, the Clinton administration salvaged its idea and came away with pledges for $3 billion.


Major concessions to Russia on trade were clearly not in the offing in Japan, yet Yeltsin pushed the issue anyway and walked away unhappy. If Yeltsin is going to play on the world stage -- indeed he hopes to turn the G-7 into the G-8 -- he is going to have to politic like a world leader. Pushing such an important issue as trade without any support is not the way to open markets.