Ottawa summit to put Reagan on the spot

President Reagan's renowned persuasive charm will be on trial as never before as the economic summit meeting convenes July 19 in a secluded, log-walled resort hotel 60 miles east of Canada's capital city.

In keeping with the quiet setting, this year's meeting of leaders of the seven major industrial democracies has been billed as mainly a get-acquainted session. But it is shaping up more as a test of Mr. Reagan's ability to sell US economic policies to an increasingly skeptical world.

The damage Mr. Reagan's high interest rates are causing in Europe will be a prime concern as the leaders sit down Sunday for a private dinner at the Chateau Montebello along the Ottawa River in Quebec Province.

There is hope that the meetings, to be held July 19-21 in Montebello and in Ottawa, will offer an occasion for Mr. Reagan to reassure summit participants about the course of US economic policies.

"We're trusting you, but when do you think it's going to work?" was how Canadian Prime Minister Pierre Trudeau, the conference host, recently summed up his government's attitude.

Many of the participating nations at this seventh annual gathering of the Western allies and Japan to discuss economic problems have new heads of state since last year's meeting in Venice.

In addition to Mr. Reagan, other first-time participants are Prime Minister Zenko Suzuki of Japan, President Francois Mitterrand of France, and Italy's new prime minister, Giovanni Spadolini.

Those with experience are Mr. Trudeau, Chancellor Helmut Schmidt of West Germany, and Prime Minister Margaret Thatcher of Britain.

With all these new faces around the table, a simple exchange of views has become an end in itself at Montebello. Six or seven hours have been set aside for talks with only the leaders and their interpreters present.

"I think a great deal of time will be spent in getting to really understand the unstated major objectives of the major participants," Mr. Trudeau explained.

The traditional goal of these meetings -- to show the world a unified front on economic issues -- may prove more trying than usual.

The major European countries are expected to press Mr. Reagan closely on his interest rate policy, which they blame for weakening the value of European currencies and slowing economic recovery in Western industrialized countries.

Mr. Mitterrand, who favors an expansionary economic approach designed to curb growing unemployment, has openly challenged the assumption of past summits that fighting inflation should be the foremost goal of government economic planners.

While interest-rate policies offer the most fertile ground for conflict, this year's meeting is notable for the many contentious issues up for discussion.

There is a deep split on the topic that Mr. Trudeau has struggled to make the focus of this summit -- the North-South dialogue. Mr. Trudeau, who has strong backing from Mr. Mitterrand, wants the rich nations of the "North" to expand their commitment to assist development of the world's poorer countries of the "South."

Mr. Reagan, however, is expected to express only limited support for this initiative, with emphasis not on the institutional aid programs favored by Mr. Trudeau but on measures to enhance third-world development by encouraging private- sector investment.

At a luncheon earlier this month, Mr. Reagan turned aside a plea by Mr. Trudeau for US support for broader programs to help the developing world.

"In essence, we are all striving for the same goals," Mr. Reagan told Mr. Trudeau. "What we are talking about is the obligation, the requirement to help others help themselves.

We are talking about others making themselves economically self-sufficient."

World trade presents another thorny issue. Summit participants must deal with the specter of rising world protectionism, a trend accelerated by Japan's continuing export success. As with the topic of US interest rates, the challenge will be to have a free exchange of views without "ganging up" on one country.

Another area of contention may be East-West trade. Mr. Reagan wants the Europeans to limit their economic dealings with the Soviet Union. However, summit participants generally agree on such issues as their response to the Soviet invasion of Afghanistan and tension in Poland.

Canadian officials have sought to dampen expectations of major agreements at the summit, emphasizing instead the value of giving world leaders a chance to get to know one another.

"They're not going to save the world in a day and a half," declared a senior official in Ottawa. "But at least they may find outwhat makes each other tick."