It is unlikely that trade negotiators in Geneva will be able to reach a hoped-for political agreement on a major international trade package in time for the Bonn economic summit July 16, U.S. officials said yesterday.
At the same time, administration officials appeared to have lowered their expectations of what President Carter can accomplish in other economic areas at the summit.
The United States had hoped to get West Germany and Japan to agree to take steps to stimulate their economies in return for U.S. policies in hold down its inflation rate and raise the international value of the dollar.
Europe and Japan have been pushing the United States to take step to reduce its consumption of oil by putting special levies or quotas on petroleum imports. Because the United States has been running large trade deficits - in part because of oil imports but also because of increasingly large imports of manufactured products - the value of the dollar has declined sharply.
But White House officials such as press secretary Jody Powell and special trade representative Robert S. Strauss said yesterday not to expect any important decisions at the Bonn summit.
Strauss, who also wears the hat of presidential counselor on inflation told reporters at a luncheon meeting yesterday that "summits are for articulation of problems and frustration among world leaders. That will be the case at this summit.
"It'll be an exceedingly useful summit if people don't expect too much," Strauss said. "He [Carter] will discuss energy and growth, but he's not going over there with any notion of solving problems."
The United States wants European countries, especially West Germany, and Japan to stimulate their economies to expand markets for U.S. exports and also to take the pressure off German and Japanese producers to sell their products abroad, especially in the United States.
But Germany and Japan are fearful that any steps they take to stimulate their economies could rekindle inflation. Similarly, in the trade area, Europe and Japan will have difficult internal problems if they remove some of their non-tariff barriers to U.S. imports of manufactured goods or agricultural commodities, as Washington is demanding at Geneva.
Strauss had hoped to have in hand a major political agreement from Geneva on both trade in farm products and on a code that deals with government subsidies to exports.
He said yesterday that it is doubtful any such agreement in agriculture will be reached by mid-month. The United States exports about one-third of its farm products, and wants Europe and Japan to increase the access of American farmers to their markets.
Strauss said he does not think that European Community or Japanese negotiators have "sufficient authority" from their governments to reach the complete agreement the United States wants. "If they gave me everything they have, it wouldn't satisfy me," Strauss said.
He said that there will probably be agreement on 80 to 85 percent of the outstanding issues in Geneva, but that the last 15 to 20 percent will be a "hard go."
He said he though an overall trade agreement could be reached for presentation to Congress in January. The talks have been going on since 1974.
But, he warned, "I know what my bottom line is: real progress in both agricultural trade and in industrial trade. I don't have to make a deal." He said the nation's major trading partners "have to be more forthcoming in their trade with the United States."
That is the hardest public posture Strauss has taken to date.
One U.S. trade official said that although Strauss has cajoled and wheedled European and Japanese negotiators privately, he has always publicly stated his "faith in our ability to make a silk purse from a sow's ear. Now we're getting near the end and we see the material still looks like a sow's ear."
Trade officials said that the administration still hopes to get a subsidy agreement in time for the summit, but they concede that there has been "slippage" in the negotiations.
Strauss had hoped to go back to Geneva to start final work on the subsidies code this week, but now will not return to Geneva until the weekend. One official said that reports from both Europe and Japan are not encouraging on the subsidies question.
Officials said yesterday that the United States will not make any announcements of unilateral administration action to restrain oil imports as some of Carter's advisers, such as treasury Secretary W. Michael Blumenthal, have urged.
They said that Carter will continue to push Congress for the special tax on crude oil he wants in his energy legislation. Press secretary Powel said that he knows of no plans to announce special action on oil imports either before the president goes to Bonn or while he is there.