FOREIGN policy today is mainly economic policy. That's why the top leaders of the seven major noncommunist industrial nations are gathered in Toronto for their 14th annual economic summit.
The main subjects of this summit - coordinated economic policy, developing-country debts, agricultural subsidies, international trade negotiations, the commerce in drugs, structural economic adjustments - also preoccupy diplomacy.
In historical terms, these summits are something new. Until perhaps the last two decades, national leaders devoted most of their foreign policy efforts to power politics, war and its prevention, colonial affairs, and such. Important international economic meetings were relatively rare, such as that at Versailles in 1919 which settled the question of reparations and other economic issues arising from World War I, or that at Bretton Woods, N.H., in 1944 which set up the post-World War II international economic institutions and system.
The avoidance of world war and the dramatic growth of international trade and investment in the past four decades have changed all that. European nations have always been highly dependent on exports for prosperity. It is only more recently that trade has become so important to the United States. Last year exports and imports added together were the equivalent of 17 percent of total national output. Not many years ago, trade amounted to less than 10 percent of US gross national product, and wasthus far less crucial to national prosperity. Collapse of the Bretton Woods fixed-exchange-rate system in 1973, the 1974 world economic recession, and OPEC's quadrupling of oil prices convinced Western leaders of the need for summits.
The summits, of course, have secondary purposes. They are what the press terms ``photo opportunities'' - an occasion for the seven leaders to parade before the cameras as international statesmen.
Canadian Prime Minister Brian Mulroney, who is expected to call an election in the autumn, will welcome the extra exposure. The lower house of the Japanese Diet faces elections within a year. US President Reagan may find his last summit an occasion to trumpet his conservative economic message. The other leaders, though not expecting immediate elections, will make points for their home audiences.
Most economic summits have not produced major decisions. Economic issues can usually be settled only after long, detailed bargaining - a task not generally tackled by presidents and prime ministers. At this Toronto summit, prior negotiations are expected to lead to two agreements, one aimed at reducing the debt burden of the world's poorest nations, mainly in Africa, and the other at improving economic cooperation among the powerful seven nations.
Even without such visible achievements, diplomats regard the summits as an important educational tool. They help inform the leaders on economic issues, reviewing their own positions before leaving home and hearing differing views at the meeting. They force national bureaucracies to consider problems in an international context and search for pragmatic positions and solutions. Each nation has ``Sherpas'' - usually top civil servants - to guide the process along within a deadline.
``It is very useful in all capitals,'' a senior Canadian official says.