The US Presidential Elections: US flunks challenge of new grand design: President Bush has abjectly failed to adapt his foreign policy to a world without rival blocs. Instead of leading, he can only react, writes Rupert Cornwell in Washington

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FORMALLY the agenda will cover such topics as Yugoslavia, aid for Russia, tariff negotiations and global economic growth. Above all, however, next week's summit of the Group of Seven industrialised nations in Munich will offer George Bush, the US President, a chance to give the first outline of a new foreign policy for a planet changed beyond recognition since he came to power four years ago. By common consent he is unlikely to rise to the occasion.

The disappointment is less that US foreign policy is on autopilot in the heat of a bitterly contested election that will be decided by domestic issues. Rather, foreign policy specialists complain, it is the lack of any conceptual design for the post-Soviet, multi-polar world that will be waiting, once the 1992 campaign is history.

Mr Bush entered the White House with the doctrine of 'Status Quo Plus', geared to preserving a balance with the Soviet Union, but forging new co-operation where circumstances permitted. Now, both the Soviet Union and the status quo have vanished. So too has talk of a briefly-trumpeted New World Order. Daily Mr Bush proclaims US leadership. Ever more clearly, though, he is by training and instinct a man who reacts to events, instead of attempting to shape them in advance, possessing neither vision, nor visionaries around him.

'There is a need for leadership, to explain what kind of role the US will play now the Cold War is over,' says William Quandt, fellow of the Brookings Institution, who served on the National Security Councils of Presidents Nixon and Carter. 'Bush has no strategic thinker like Kissinger or Brzezinski. Even if he wins a second term, we won't see much innovation. Whole parts of the world are going to be neglected. If a new policy does emerges, it'll be by trial and error.'

Thus indeed it was with the one effort this year to sketch a blueprint - a leaked Pentagon document setting out 'illustrative' war scenarios that might confront the sole remaining superpower, and arguing that Germany and Japan must remain non-nuclear but should contribute more to an international security system. After a firestorm of foreign criticism, the study was shelved, quietly

but, some suspect, wistfully.

Predictably Democratic criticism is far harsher. For Michael Mandelbaum, director of East- West studies at the Council of Foreign Relations, and a close Clinton adviser, US foreign policy is simply out of date, adrift in a world it no longer understands. 'That's one reason the Administration spends so much time on the Arab-Israeli conflict: it's part of the old order, not really multilateral, and not economic - and George Bush understands it.'

Likewise, says Mr Mandelbaum, last month's dramatic strategic arms reduction agreement with Boris Yeltsin, the culmination of a string of nuclear and conventional arms deals with Moscow since 1987: 'It was a great achievement, but one which responded to a threat which no longer existed.'

Indeed Mr Bush's dazzling foreign policy successes - the reunification of Germany and the collapse of the Soviet Union, the Gulf war victory and the consequent first direct negotiations between Israel and her Arab foes - all pre-date the demise of the old adversary last December. Since then he has cut a largely abject figure on a stage he once trod so surely.

Part of the reason has been his crumbling domestic standing, and the emergence of two political challengers, first the right-winger, Pat Buchanan and now the independent, Ross Perot, with overtly protectionist, 'America First' leanings.

But that alone cannot explain the scrambling postponement of his visit to Japan, later recast as a trade mission, which proved an excruciating failure, or the fiasco of his recent trip to Panama, or the miscalculations that led to Mr Bush's virtual isolation at the Earth Summit in Rio de Janeiro, or the hesitant, ambivalent reaction to the violent upheavals first in the ex-Soviet republics and now most dramatically in Yugoslavia.

Rather, they underline the discomfort of a man with what Mr Quandt calls 'the balance-of- power outlook of a nineteenth century conservative', when faced with a world whose immediate crises are less inter-state than intra- state, and whose deepest problems, such as the environment and the North-South divide, must be solved not militarily, but multilaterally and by economic means. Munich might mark a new beginning but as Mr Quandt remarks, 'it's most unlikely'.

Real change, perhaps, will have to await a new occupant of the White House. A Clinton administration, says Mr Mandelbaum, would bring three fundamentally new approaches to foreign policy: the understanding that the Cold War is finally over, real commitment to promoting real democracy in countries like China, the old Eastern Europe, even India, and 'the realisation that economics is the name of the game: that you can't have an effective foreign policy without economic reconstruction at home'.

Such indeed is the theory expounded in one of the hottest selling books in Washington right now. Head To Head is the work of Lester Thurow, economics professor at MIT.

With the Cold War gone, he argues, the defining issue of global geo-politics will be a three way economic struggle between Europe, the US and Japan. And the prognostications of Mr Thurow are not encouraging.