Expectations Lowered for Tokyo Summit : Economics: Clinton tries to jawbone U.S. allies into action. Aides admit that possibilities are bleak.

By DAVID LAUTER

July 1, 1993 12 AM PT

TIMES STAFF WRITER

WASHINGTON — Making preparations for next week’s international economic summit in Tokyo, President Clinton unlimbered his jawboning skills Wednesday, verbally prodding Japan to open its markets, Germany to lower its interest rates and the rest of Europe to break a stalemate over farm subsidies.

But even as Clinton sought to advance his agenda, Administration aides have begun lowering expectations for next week’s meetings of the world’s seven leading industrial nations, publicly noting that the domestic political turmoil in Japan and the weakness of several European governments make major progress unlikely.

“I certainly think that the domestic political situation in Japan has changed the dynamics somewhat,” White House Press Secretary Dee Dee Myers said Wednesday.

Congressional leaders, after meeting with Clinton, offered similar comments.

“It’s not his fault, just circumstances,” Senate Republican Leader Bob Dole of Kansas said after predicting little progress in Tokyo.

Answering questions from reporters before the congressional meeting, Clinton emphasized the connection between next week’s meeting and the domestic economy.

“There’s a global recession,” he said. “Two-thirds of our jobs in the late ‘80s came from exports, and it’s hard to generate jobs from exports when many European countries have actually negative growth and when Japan has no growth.

“That’s why this . . . meeting is so important, trying to get some growth back into the global economy that will get the export portion of our job growth going again,” Clinton said. “It’s very hard for the United States alone to grow jobs without help from other nations.”

The Japanese “ought to stimulate their economy and open their markets. And the Europeans should resolve their own differences about agriculture and other things and help us to sign the GATT (General Agreement on Tariffs and Trade) agreement before the end of the year,” Clinton said. “The German central bank should continue to lower interest rates there so that all of us together can expand this economy.”

U.S. officials have offered that sort of advice at past meetings of the seven nations--Japan, Germany, Britain, France, Italy, Canada and the United States--only to hear the Japanese and Germans politely respond that the United States should lower its budget deficit before lecturing others about economic policy.

This time, Clinton has hoped that his own deficit reduction proposal would increase his credibility with foreign governments. But he now finds that most of them are too preoccupied with their own domestic problems to respond.

The impact of the political chaos in Japan already has hampered U.S. efforts to negotiate with the Tokyo government over gaining greater access to Japanese markets.

Mickey Kantor, the U.S. trade representative, issued a statement Wednesday naming Japan as a nation that discriminates against U.S. companies in its government procurement of construction, architectural and engineering services.

He said, however, that because Japan has agreed to negotiate with the United States over these concerns, he would postpone imposing unspecified sanctions against Tokyo until Nov. 1.

On the broader scope of trade talks, generally, the Administration has all but given up its hope of achieving a “framework agreement” designed to set overall guidelines for U.S.-Japanese trade talks. Administration officials had hoped to reach agreement on such a pact in time for the meetings but a last round of talks broke down earlier this week.

Times staff writer James Gerstenzang contributed to this report.