The Summit in Brief

* What is it?

The summit, held each summer since 1975, is a two-day meeting of the heads of government of the seven largest industrialized democracies--the United States and its major economic allies--to discuss issues that lend themselves to global cooperation.

* When and where is it being held?

Today through Wednesday at the Queen Elizabeth Conference Center in London.

* Who will participate?

George Bush, President of the United States

Helmut Kohl, chancellor of Germany

Toshiki Kaifu, prime minister of Japan

John Major, prime minister of Britain

Francois Mitterrand, president of France

Giulio Andreotti, prime minister of Italy

Brian Mulroney, prime minister of Canada

James A. Baker III, U.S. secretary of state

Nicholas F. Brady, secretary of the Treasury

Jacques Delors, president of the European Community

Foreign ministers and finance ministers of participating nations

* What is the purpose of the summit?

The summit has become a major yearly gathering--the vehicle by which the heads of government can provide political impetus for important new international economic and political initiatives.

* What is on the agenda?

Aid to the Soviet Union. This year, the dominant issue will be Moscow’s request for massive aid to help Soviet President Mikhail S. Gorbachev make the transition to democracy and a market-oriented economy. The allies are divided about the issue. The United States, Japan and Britain believe that aid to the Soviets should be limited and conditioned on development of a serious Soviet plan for making needed reforms. Germany and Italy want to provide more substantial aid, partly to keep the Soviets mollified and partly to help sell their products there. They already have begun to offer credits to Moscow.

The outlook: The seven will agree to provide technical assistance and some credits, but only on a step-by-step basis, pegged to Moscow’s willingness to make needed reforms in the Soviet economy. Also likely: Soviet status in the International Monetary Fund.

Trade negotiations. The allies also are expected to discuss ways to jump-start the “Uruguay Round” of global trade-liberalization talks, which have been mired in an impasse since last spring. The negotiations, which involve 108 nations, are aimed at reducing trade barriers in agriculture and some manufactured goods and extending world trade rules to cover services, investment and intellectual property (patents, trademarks and the like). Many analysts fear that unless the negotiators can work out a compromise soon, the talks will collapse and the world will turn more and more to protectionism and to regional trading blocs. They warn that that could crimp world trade and undermine global economic growth.

The outlook: The leaders will call for rejuvenating the Uruguay Round of negotiations but will fall short of proposing a serious compromise to resolve the U.S.-European impasse on trade in agriculture, which is the major stumbling block to a final accord. World economy. Some U.S. officials are worried that the global economy may not grow rapidly enough, crimping the market for American exports, whose sales are helping to keep the domestic economy here from faltering. Accordingly, the United States is expected to try to step up pressure on other governments to reduce interest rates in their respective countries in hopes of spurring more growth at home. But Washington is unlikely to get very far on this. Other governments, worried about the impact of the rising dollar in intensifying inflation pressures in their countries, already have indicated that they intend to hold interest rates where they are.

The outlook: The leaders may adopt what they call a “differentiated” approach--calling on countries to take whatever action suits them best--either reducing interest rates or, for some, dealing with their budget surpluses. * How does the summit work?

The agenda for the summit--and the text of the formal communiques that the seven leaders issue--are hammered out in advance by high-level officials known as Sherpas (after the men who carry equipment and supplies for mountain climbers in the Himalayas). The Sherpas meet several times each year--the last one a few weeks before the summit begins. When the meeting gets under way, the heads of government discuss the agenda items broadly and then pore over the draft of the communique to make any last-minute changes. The communique that the seven leaders issue at the end of the summit is used to provide the political push needed to prod Cabinet officers and lower-level officials into tackling key issues throughout the coming year.